Ethereum, designed by Vitalik Buterin, was brought to life with contributions from Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin. The project began development in 2014, funded through a successful crowdfunding campaign, and the network officially launched on July 30, 2015.
Ethereum's unique functionality, smart contracts, quickly helped it gain popularity. Smart contracts are self-executing digital agreements stored on the blockchain, which automatically enforce the terms when conditions are met. This innovation allowed Ethereum to support decentralized applications or dApps, expanding its use cases beyond simple transactions.
In June 2016, a major event called “The DAO Hack” led to a fork in the network, resulting in two separate chains: Ethereum and Ethereum Classic.
The DAO was one of the most celebrated dApps on the early Ethereum network. It was a decentralized venture capital fund allowing token holders to vote on projects to fund. On June 17, 2016, the DAO was subjected to an attack exploiting a combination of vulnerabilities. These vulnerabilities include a recursive call exploit and the flawed design of storing all funds in a single address.
The recursive call exploit occurred when the DAO's smart contract allowed a specific function to be called repeatedly without proper safeguards. This vulnerability enabled attackers to manipulate the function and siphon funds off to a separate contract they controlled. Additionally, the flawed design of storing all funds in a single address made the DAO an attractive target for hackers.
Following the hack, Ethereum's blockchain was rolled back in an attempt to recover the stolen funds. This move, though unprecedented, drew criticism regarding Ethereum's decentralization. A group of miners refused to accept the rollback, leading to a split in the Ethereum blockchain and resulting in the creation of Ethereum Classic.
Ethereum Classic remains closer to the Ethereum of 2016 than today's Ethereum. While Ethereum has transitioned to a proof-of-stake consensus mechanism, Ethereum Classic continues to operate as a proof-of-work network. This divergence underscores a fundamental difference in philosophy between the two communities.
The Ethereum Classic community places a strong emphasis on immutability, the idea that the blockchain ledger should remain unaltered, even in the face of hacks or other significant events. They view immutability as a core principle of blockchain technology, ensuring that transactions, once recorded, cannot be changed or reversed.
Ethereum Classic continues to support smart contracts and decentralized applications, offering a platform similar to Ethereum’s original vision. However, it has faced challenges, including multiple 51% attacks, due to its smaller network size and hash rate compared to Ethereum. Despite these hurdles, Ethereum Classic's community remains dedicated to preserving the principles of decentralization, immutability, and the original Ethereum ethos, providing an alternative for users and developers
Ethereum and Ethereum Classic are two distinct blockchains that originated from the same codebase but have diverged significantly in terms of philosophy, consensus mechanisms, and future directions.
Ethereum transitioned from Proof of Work to Proof of Stake in 2022 with the Ethereum 2.0 upgrade. This shift aimed to improve scalability, reduce energy consumption, and enhance security. Ethereum Classic, however, continues to use PoW, maintaining the original consensus mechanism that both networks used before the split.
For transactions on Ethereum, users need ETH to pay for gas fees, which are essential for executing transactions and smart contracts. On Ethereum Classic, the equivalent gas fees are paid with ETC. This distinction is crucial for users and developers interacting with each blockchain.
One of the major differences lies in their token supply policies. Ethereum Classic has a capped supply, with a future maximum of 210.7 million ETC. This creates a sense of scarcity and potentially deflationary characteristics. Ethereum, on the other hand, does not have a fixed supply. Its issuance is capped at 4.5% annually, allowing for more flexibility but also leading to ongoing inflation.
Ethereum is actively undergoing multiple upgrades, such as sharding and the integration of layer 2 solutions, to enhance its scalability, aiming to support a higher volume of transactions and reduce congestion. In contrast, Ethereum Classic is considered less scalable, with fewer planned upgrades and a more static development approach.
In regards to adoption, Ethereum is much more widely used and embraced than Ethereum Classic. As a result, The Ethereum ecosystem is much more lively than Ethereum Classic, and the price of ETH is much higher than ETC due to demand.
Despite Ethereum evolving with massive upgrades, there is still significant consumer interest in Ethereum Classic. Ethereum Classic's relative simplicity is charming to many users, offering a straightforward alternative to Ethereum's growing complexity. The introduction of a max supply enhances its appeal, creating a sense of scarcity and potential value.
This simplicity, combined with the capped token supply, maintains Ethereum Classic's popularity and may fuel its growth in the future. As Ethereum continues to evolve, Ethereum Classic's stable and immutable nature attracts those who value consistency and straightforwardness in the blockchain world.
