Ethereum Classic (ETC) vs Ethereum (ETH): What is the difference?

Ethereum Classic (ETC) vs Ethereum (ETH): What is the difference?

in Cryptocurrency, Know-it-all, Altcoins
Ethereum is an open blockchain platform that lets anyone build and use decentralized applications that run on blockchain technology. Like Bitcoin, no one controls or owns Ethereum – it is an open-source project built by many people around the world. But unlike the Bitcoin protocol, Ethereum was designed to be adaptable and flexible. It is easy to create new applications on the Ethereum platform, and with the Homestead release, it is now safe for anyone to use those applications.
Ethereum
Ethereum Classic is not a new cryptocurrency, but instead a split from an existing cryptocurrency, Ethereum. Both blockchains are identical in every way up until block 1920000 where the hard-fork to refund The DAO token holders was implemented, meaning that all the balances, wallets, and transactions that happened on Ethereum until the hard-fork are still valid on the Ethereum Classic Blockchain. After the hard-fork, the blockchains were split in two and act individually. Ethereum Classic still offers the same features as Ethereum, such as the creation and deployment of smart contract and Decentralized applications, and has all the same specifications, such as average block time, size and reward.
Ethereum vs Ethereum Classic

How does Ethereum work?

Ethereum incorporates many features and technologies that will be familiar to users of Bitcoin, while also introducing many modifications and innovations of its own. Whereas the Bitcoin blockchain was purely a list of transactions, Ethereum’s basic unit is the account. The Ethereum blockchain tracks the state of every account, and all state transitions on the Ethereum blockchain are transfers of value and information between accounts.

There are two types of accounts:

  • Externally Owned Accounts (EOAs), which are controlled by private keys
  • Contract Accounts, which are controlled by their contract code and can only be “activated” by an EOA

how cryptocurrency works
For most users, the basic difference between these is that human users control EOAs - because they can control the private keys which give control over an EOA. Contract accounts, on the other hand, are governed by their internal code. If they are “controlled” by a human user, it is because they are programmed to be controlled by an EOA with a certain address, which is in turn controlled by whoever holds the private keys that control that EOA. The popular term “smart contracts” refers to code in a Contract Account – programs that execute when a transaction is sent to that account. Users can create new contracts by deploying code to the blockchain. Contract accounts only perform an operation when instructed to do so by an EOA. So it is not possible for a Contract account to be performing native operations like random number generation or API calls – it can do these things only if prompted by an EOA. This is because Ethereum requires nodes to be able to agree on the outcome of computation, which requires a guarantee of strictly deterministic execution. Like in Bitcoin, users must pay small transaction fees to the network. This protects the Ethereum blockchain from frivolous or malicious computational tasks, like DDoS attacks or infinite loops. The sender of a transaction must pay for each step of the “program” they activated, including computation and memory storage. These fees are paid in amounts of Ethereum’s native value-token, ether.
cryptocurrency
These transaction fees are collected by the nodes that validate the network. These “miners” are nodes in the Ethereum network that receive, propagate, verify, and execute transactions. The miners then group the transactions – which include many updates to the “state” of accounts in the Ethereum blockchain – into what are called “blocks”, and miners then compete with one another for their block to be the next one to be added to the blockchain. Miners are rewarded with ether for each successful block they mine. This provides the economic incentive for people to dedicate hardware and electricity to the Ethereum network. Just as in the Bitcoin network, miners are tasked with solving a complex mathematical problem in order to successfully “mine” a block. This is known as a “Proof of Work”. Any computational problem that requires orders of magnitude more resources to solve algorithmically than it takes to verify the solution is a good candidate for proof of work. In order to discourage centralization due to the use of specialized hardware (e.g. ASICs), as has occurred in the Bitcoin network, Ethereum chose a memory-hard computational problem. If the problem requires memory as well as CPU, the ideal hardware is, in fact, the general computer. This makes Ethereum’s Proof of Work ASIC-resistant, allowing a more decentralized distribution of security than blockchains whose mining is dominated by specialized hardware, like Bitcoin.  

Ethereum History

Ethereum was initially described by Vitalik Buterin in late 2013 as a result of his research and work in the Bitcoin community. Shortly thereafter, Vitalik published the Ethereum white paper, where he describes in detail the technical design and rationale for the Ethereum protocol and smart contracts architecture. In January 2014, Ethereum was formally announced by Vitalik at The North American Bitcoin Conference in Miami, Florida, USA. Around that time, Vitalik also started working with Dr. Gavin Wood and together co-founded Ethereum. By April 2014, Gavin published the Ethereum Yellow Paper that would serve as the technical specification for the Ethereum Virtual Machine (EVM). By following the detailed specification in the Yellow Paper, the Ethereum client has been implemented in seven programming languages (C++, Go, Python, Java, JavaScript, Haskell, Rust), and has resulted in better software overall. Two years after the Ethereum project launch, the Ethereum community thought of launching the DAO. In short, the Decentralized Autonomous Organization (aka the DAO) was built to act as a decentralized venture capital fund for decentralized crypto projects. The idea was to make a stateless decentralized organization with no board of directors or employees but instead would use independent investors as its key actors.
DAO, cryptocurrency
In May 2016, the DAO went for a crowd token sale to fund its development. With $150 million in the pocket, this stood out to be the second largest crowd sale ever held in history. Shortly after, a flaw in the DAO’s code was exploited by attackers and more than $50 million was drained out of the DAO’s funds. This lead to an upheaval in the crypto space, among DAO investors, and particularly among members of the Ethereum community.  

Why was Ethereum Classic created

The Hard-fork has been a controversial subject, that has literally split the Ethereum community in two. Both sides have made some valid points regarding their position on the hard-fork debate. Users that did not support the hard fork point out that
  • Code is law - the original statement of The DAO terms and conditions should stand under any circumstances
  • Things that happen on the blockchain are immutable and they should never change regardless of what the outcome is
  • There is a slippery slope and once you modify/censor for one course/reason there is not a lot to keep you from doing it for other contracts
  • The decision to return the money is short sighted and you might reduce the value of ETH down the line based on your decision to act now
  • This is a bailout
Users that supported the hard fork argued the
  • Code is law is too drastic of a statement at the current time and humans should have the final say through social consensus
  • The Hacker could not be allowed to profit from the exploit as it is ethically wrong and the community should intervene
  • The slippery slope argument is not valid as the community is not beholden to past decisions, people can act rationally and fairly in each situation
  • It would be problematic to leave such a big piece of the Ether supply in the hands of a malicious actor and it might harm the value of Ether down the line
  • This is not a bailout as you are not taking money from the community, it is just a return of funds to the original investors
  • It would stop an ongoing war between the white-hat hackers and the hacker that would demoralize the community
  • The exploit was big enough to take action and reverse it
  • If the community acts now it will make people that are unethical think twice before they use Ethereum as their platform of choice
  • A hard-fork to return the funds would keep regulators and the legal system out of the debate: our mess, we fixed it.
The Ethereum Classic was, in this sense, created as a way to allow smart contracts to run exactly as they are programmed to, without the interference of a third party. The ETC community argues that the DAO smart contract did what it was programmed to do and that no action should be taken to censor the contract.  

Ethereum Classic (ETC) Team

The team behind ETC usually prefers to be behind the scenes, which certainly raises some doubts. Much of the team members use pseudonyms. And needless to say, the ETC community and its team is far smaller than the “new” ETH community. Here are some notable key players of the ETC project:
how cryptocurrency works

Pros and cons of Ethereum Classic & Ethereum

Ethereum Classic

Pros
  • Stays true with the philosophy of the immutability of the blockchain.
  • Has recently got the backing of a few big players
Cons
  • Doesn’t get access to all the new updates made in the ETH chain (e.g.,. The move from POW to POS).
  • All the heavyweights of the Ethereum have moved on to ETH.
  • Considered an insult and an attack on the Ethereum community.
  • Is know to be full of scammers.
 

Ethereum

Pros
  • Is growing at an exponential pace.
  • Has the majority of the original big dogs who have created Ethereum in its corner.
  • Has reversed the DAO hack and given back the stolen money to its rightful owners (the DAO token holders).
  • Is being constantly updated with the latest changes.
  • Has a higher hash-rate than ETC.
  • A powerful example of what the Ethereum community is capable of when it comes together to solve a problem.
  • ETH is backed by a powerful group of over 200 corporations called the Enterprise Ethereum Alliance (EEA) which aims to use the blockchain technology to run smart contracts at Fortune 500 companies. Members include: Microsoft, JP Morgan, Toyota, ING, etc.
Cons
  • Goes against the policy of immutability.
 

Ethereum Classic Market Cap


cryptocurrency market

Buy ETC from Exchanges

Below is a list of cryptocurrency exchanges that list ETC:
  • Poloniex
  • Bittrex
  • Kraken
  • BitSquare
  • BitMEX
  • Bitfinex

Ethereum Classic Wallets

  • Hardware Wallets – Trezor, Ledger Nano S (I use this)
  • Mobile Wallets – Jaxx (iOS, Android)
  • Desktop Wallets – Jaxx (Windows, Mac OS, Linux), Mist (Windows, Mac OS, Linux)
  • Web Wallets – Classic Ether Wallet
  • Paper Wallets – Classic Ether Wallet
 

Conclusion

Ethereum has made a spectacular comeback from an absolute disaster, and it looks like it’s going fulfill all the expectations that people had had in it when it started. More than anything, the true power of Ethereum lies in its full scope. It is not just a currency; it is a platform on which people can build projects which will dictate the future. If decentralization is indeed the future, then Ethereum is going to be in the front and center of it.  

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