Everyone seems to be going nuts behind cryptocurrencies. However, not a lot of people seem to be interested in learning how things actually work on the platform. Therefore at Coingyan, we are trying to help people especially beginners to the cryptocurrency world learn about cryptocurrencies in an easy, entertaining ( although I don’t get to insert a lot of jokes within the post ) and as in-depth as possible way. So for today, we are going to be exploring Ethereum Classic. Alrighty, then my matey let’s begin.
What is Ethereum classic
Ethereum Classic is a decentralized platform just like Ethereum that operates smart contracts, i.e., applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.
It is an extension of the original Ethereum blockchain, i.e., the parent version and it maintains an untouched history, i.e., an account of transactions that are not subjugated to any external interference and subjective fiddling of transactions. In simple words, it should be very challenging to mess around with the transaction history on this platform.
The Story Behind Ethereum Classic
Two years after Ethereums inception, the ethereum community considered introducing something known as a DAO.
In a nutshell, a Decentralized Autonomous Organization (aka the DAO) was developed to play the role of a decentralized venture capital fund for decentralized crypto ventures. The intention behind this was to build a stateless decentralized organization that would have no board of directors or employees but rather would leverage the power of independent investors functioning as its main players.
In May 2016, there was a crowd token sale for the dao in order to fund its deployment. With $150 million in its pocket, this stood out to be the second largest crowd sale ever held in the history of cryptocurrencies.
However, after its inception, some attacker or attackers took advantage of a loophole in the DAO’s code and swooped away more than $50 million out of its funds. Pretty shocking I know, but let’s move forward.
As a result of the incident mentioned above, there was a lot of chaos in the cryptocurrency sphere. DAO investors, and especially the members of the Ethereum community were in absolute daze regarding this event. But then what happened next was even more shocking.
The DAO Hard Fork Decision
This unexpected event had the DAO investors and the Ethereum community almost in tears and a certain amount of panic due to the loss they had just incurred. After all, the DAO was one of the earliest and most substantial applications that was being developed on Ethereum’s platform. And low and behold what a big mess it had turned into during this point of time.
A total of 50million$ out of the window just like that.
Ethereum was in its early stages of development when this tragic event had occurred. As a result, its price regarding cost per share plummeted from $20 to $13, and there was just a lot that Vitalik and team had to endure.
Nevertheless, the attackers were only able to exploit the Dao code, and the primary platform of Ethereum remained untouched from this event. But it still had to take a blow regarding its reputation and loss of market cap because of its relationship with the DAO project.
Now for my readers that are still confused about the hacking incident as in what the actual hell are you talking about, let me help you understand the nature of things that occurred through an analogy. Take the Ethereum platform as the worldwide web and the DAO as a particular website on this network. Now if your site gets compromised, that doesn’t mean that the internet is at fault here. Instead, this flaw is just an indication of the underlying issue which could be a problem with your host or site code, etc. But if your website was the first ever to get hacked on the worldwide web, you might consider the internet as insecure or not safe. But in actuality out of several other sites, yours was the one to get hacked because of specific reasons. Catch my drift.
So the consequence of this action was that the trust of people in cryptocurrencies got very dicey.
As a result of this, a vast majority of the Ethereum community decided to hard fork Ethereum for restoring the financial loss and reputation of their investors.
Now a hard fork is a like a breakup between girlfriend and boyfriend where both decide never to see or interact with each other again. In simple language, it means that the parent blockchain will split into a new system altogether and the new network thus established will no longer continue to follow the same protocols as is the case on the main blockchain.
So the Ethereum blockchain had gone a hard fork at Block 192000 for reimbursing the DAO investors for the loss that they incurred. The hard fork resulted in the hacked transaction being declared null and void, and a new version of the blockchain known as ETC (Ethereum Classic) was born.
Was that easy to understand? Do bless me with your presence in the comments below if you have any doubts.
The aftermath of the Dao attack
The DAO attack split the elementary Ethereum community into two troops:
- Troop I – Those that were in favor of overturning the DAO attack and reimbursing the initial investors.
- Troop II – Those in favor of adhering to the principle of “Code is Law”.
Community members who did approve of the hard fork idea carried on with mining ether on the parent version of the blockchain without updating to the newer version.
Subsequently, both communities have bifurcated solely on the basis of the versions of the blockchain they are utilizing.
Difference between Ethereum and Ethereum Classic
I just went through this thing above and reiterating it would be kind of silly in my perspective. Therefore, let’s enjoy this video that explains the difference between Ethereum and Ethereum classic for furthur exploration. Cheers guys.
The original Ethereum is like Ethereum Classic, and the current version of Ethereum (ETH) is what you can call “new” Ethereum.
Stating what I said above very bluntly ETC is the cryptocurrency operating on the older version of the blockchain and ETH is the new version of this cryptocurrency. Easy as pie or what.
Ethereum classic projects
As stated in the video above, there is no ambiguity that the new Ethereum is still the champion of smart contracts and DApps in the market. ( Looks like Lisk has a lot of catching up to do ). And in a small duration, it has only moved forward from strength to strength through the development of the EEA(Enterprise Ethereum Alliance) and other latest updates within the cryptocurrency sphere.
However, Ethereum Classic still cannot be counted down and out as it provides all the features that Ethereum has to offer, and it just wouldn’t be fair to consider it out of the leg race because it is still amongst the top 20 cryptocurrencies prevalent within the market at the moment.
Besides that, some ICO’s along with a couple of meaningful ventures on its distributed ledger is enough proof that it still packs a punch despite being a fork of Ethereum.
Now if you are interested below are a couple of honorable ventures and ICOs on the Ethereum Classic network:-
Projects-Stamp.io, InPay, BitTicket
Problem with Ethereum classic
The most significant issue with ETC is its dearth of backward compatibility with its parent blockchain, i.e., Ethereum. All of the influential people onboard Ethereums community have ported themselves on to the new chain. Now this means that anyone who is a member of ETC will not be able to access any of the upgrades performed on ETH. The most precise analogy, in my opinion regarding this, is ETH’s shift from Proof Of Work (PoW) to Proof of Stake (PoS). ETC will not be able to move through with such a change because their software just does not facilitate the utilization of such upgrades.
But wait there is more; there are far more wicked problems with ETC, and a couple of them are best kept private. A lot of people are of the opinion that ETC is an attack against Ethereum itself. Wait for what? After the hard fork when the community was divided into two, i.e., ethereum(new) and ethereum classic(old), thus rendering it vulnerable. Many conspire that the anti-Ethereum camp wholeheartedly supported ETC only to cause some sort of disruption in the community. Moreover, eminent bloggers such as David Seaman have proclaimed that “Classic is an insecure orphan chain being promoted in a way that would be illegal if Ethereum were a publicly traded company, which it could eventually be.”
Pros and Cons of Ethereum Over Ethereum classic
Pros of ETC
It stays true to the ideology that the blockchain should immutability.
Has received the support of a few hot shots.
Cons of ETC
Access to all the new upgrades made within the ETH network (e.g., The transition from POW to POS) is denied to ETC.
All the hotshots of the Ethereum platform prior to the fork have transitioned to ETH.
Perceived as an insult and an attack on the Ethereum community.
Is considered to be loaded with scammers which brings up security issues regarding funds.
Ethereum Pros & Cons
Is progressing at staggering speed.
Has the majority of the original big players who developed Ethereum on its side.
Was successful in reversing the DAO hack and reimbursing the DAO token holders with their investments.
Is being updated continuously with the latest innovations.
It possesses a greater hash-rate than ETC is capable of undergoing.
ETH has the support of an influential group of over 200 corporations known as the Enterprise Ethereum Alliance (EEA) that intends to utilize the blockchain technology for operating smart contracts within fortune 500 companies. Its members consist of Microsoft, JP Morgan, Toyota, ING, etc.
It doesn’t sit well with the policy of immutability, i.e., goes against it.
Total supply of Ethereum Classic
Just like Ethereum, Ethereum Classic has no solid cap (i.e., it has an unlimited supply). And again similar to Ether, Ether classic (ETC) will be allocated in a fixed yearly linear rate of 0.3 times the annual total amount of Ether minted in the pre-sale.
60,102,216 Ether was created, minted, forged (whatever you want to call it) in the pre-sale.
So 0.3 times 60,102,216 equals 18,030,664.8 which equates to approximately 18 million Ether Classic tokens on an annual basis.
For more information on Ethereum Classic, visit these links:
Founder & CTO: IGOR ARTAMONOV@SPLIX
If you guys and gals are interested in learning more then Bon appetite.
Where to store
- Hardware Wallets – Trezor, Ledger Nano S
- 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.
And now time to fork ways like ethereum and ethereum classic. But I disappear into oblivion please remember to follow us on Facebook, Twitter, Youtube, Instagram. As always thanks for reading and have a nice day. If you have any further doubts I will try my level best to clarify them for you in the comments section below.