What is the difference between Ethereum Classic vs Ethereum? Their names might mislead some of the newer investors in the crypto space. But the story of the two is one of the most controversial in the world of cryptocurrency.
Before choosing to invest in one of the other, you must understand how Ethereum Classic vs Ethereum compares.
Comparing both cryptocurrencies is way more than price comparison. It’s a battle of ideas. Investors need to grasp the basic concepts that stand in between before deciding which coin between Ethereum Classic vs Ethereum is a better investment. Let’s dive right in.
In this Guide:
The History of Ethereum
In 2013, there was only one Ethereum blockchain and only one cryptocurrency, Ether (ETH).
The creator of the blockchain is Vitalik Buterin and a group of skilled developers.
The main difference from the already established Bitcoin blockchain is that the Ethereum blockchain allows decentralized apps to be built on top of the blockchain through self-executing contracts–also known as smart contracts. The decentralized smart contract made it very appealing, especially for small businesses.
The blockchain split was bound to happen when the Decentralized Autonomous Organization (DAO) was created.
The DAO would allow users to create an Ethereum pool to decide what project they should invest in collectively. The idea had a huge success, and it raised, at the time, $150 million worth of ETH. Unfortunately, a flaw in the blockchain code allowed the withdrawal of $50 million by attackers.
But a significant part of the community concluded that the Ethereum blockchain has to be altered to revert the attack and get the funds back.
Adopting only one solution wasn’t possible within the community and that led to a hard fork. The old blockchain that decided to keep records unaltered was renamed Ethereum Classic (ETC), while the new network would simply be called Ethereum (ETH).
The mayhem caused by the 2016 attack on the Ethereum blockchain, followed by the first blockchain hard fork, set the world for the first ETC vs ETH conversation.
With that story in mind, we’re going to try to answer the grandest question on the topic of Ethereum vs Ethereum Classic. Is Ethereum Classic a good investment?
What is the Purpose of Ethereum Classic?
Ethereum Classic is an immutable blockchain. It holds the records of the 2016 exploit as well as the entire history of the network.
The developers behind the project are still working hard to expand it into a global payment network. The community that stands behind Ethereum Classic has an idealist view of blockchain. They are firm believers that no alterations should be made on the blockchain. In the end, we need to remember that the technology was specifically created to prevent human manipulation.
The ETC idealists reject the reasoning that led to the hard fork of 2016 and invokes the already famous amendment “Code is law” to protect the immutability of a system that was built to be fundamentally different from the traditional global system.
The ETC community condemned the choice of the hard fork. They point out that it sets a precedent to create future forks for any reason that might be deemed worthy enough to break the rules.
Is Ethereum Classic Better than Ethereum?
While the essence of an indisputable and permanent ledger is the main value behind Etheruem Classic, its future seems to raise a series of concerns regarding security and scalability.
While Ethereum Classic offers smart contracts as with the Ethereum network, it has struggled to gain the same popularity as Ethereum. It has a few things missing which have hindered its long-term growth. A few of them include vision, support and the vast developer support that the standard Ethereum enjoys.
Many developers lost confidence in the success of the network after a series of 51% attacks. Analysts have concluded that Ethereum Classic needs to adopt the Proof of Stake consensus mechanism to scale the transaction limit and eliminate the threat of future attacks.
Is Ethereum Classic a Good Investment 2021?
After all the controversy, you must be wondering, “Is Ethereum Classic a good investment?” There will always be the ETC vs ETH debate, as long-term cryptocurrency enthusiasts support one or the other.
The Ethereum vs Ethereum Classic topic will forever remain an ideological battle.
Ethereum Classic vs Ethereum Price Comparison
The price difference of Ethereum Classic vs Ethereum only grew wider in the past years, but it seems that they follow the same pattern. They both had a bull run in 2017, dropped in 2018, and rose again in 2021.
At press time, the all-time high for ETH is $4,362.35, while the all-time high for ETC is $176.16.
At the moment, Ethereum is a better investment. ETH has become a crypto powerhouse and is second only to Bitcoin in terms of market cap. It’s also the backbone of the burgeoning Decentralized Finance (DeFi) and non-fungible token (NFTs) sectors.
Ethereum Classic, however, has had a different story. Without much support, vision, or strong fundamentals, it has struggled a bit. ETC’s price movements in 2021 benefitted from the meme coin trend as investors searched for low-cost coins to pump. This has led to the price soaring and posting massive returns for investors.
Having taken all these into account and the Ethereum Classic vs Ethereum story, we recommend ETH as a better investment.
Does Ethereum Classic Follow Ethereum?
After the hard fork in 2016 on the Ethereum network, many important changes took place.
The Ethereum vs Ethereum Classic is an ongoing comparison in many communities.
But facts have made it easy to understand that Ethereum strives to become the ultimate DeFi service provider as it continues to grow and develop the platform.
The Ethereum Classic network decided to follow Bitcoin’s scarcity model. The network has a hard cap of approximately 210 million ETC. The block rewards reduce by 20% every 5 million blocks. Ethereum still mints ETH coins at the same rate and does not have a hard cap.
At the same time, the Ethereum network announces that it will complete the switch from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Steak (PoS) by the end of 2021.
The PoS consensus mechanism requires fewer resources to maintain the network and is the most environmentally friendly option for any blockchain network.
Although it was mentioned in the original roadmap of Ethereum, the Ethereum Classic network decided to delay the switch to PoS and has now completely removed it from their plans. ETC will continue to operate as a Proof-of-Work (PoW) network.
Considering the major differences in how the two platforms plan to grow, it is obvious that Ethereum Classic is not following Ethereum.
Performance metrics, such as total transaction and hash rates, point Ethereum to be the best performing network of the two.
The Ethereum network performs an average of 600,000 transactions per day, while the daily average on the Ethereum Classic is around 40,000. The computational power (hash rate) of Ethereum is about 20 times higher than that of the Ethereum Classic network.
At the same time, more than half of all existing DApps run on the Ethereum platform, while only a hand full are deployed on the Ethereum Classic network.
Ethereum Classic vs Ethereum: Conclusion
When comparing Ethereum Classic vs Ethereum, the lower price is the major attraction for the former. But the lack of a road map to induce improvement and growth sets it back and labels ETC as an inferior investment.
The plan to adopt PoS is set to ensure a greater adoption for ETH and will allow Ethereum to scale the number of transactions while lowering fees.