What is the difference between Ethereum Classic and 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 another, you must understand how Ethereum Classic vs Ethereum compares.
The history of Ethereum
In 2013, there was only one Ethereum blockchain and one Ether (ETH) cryptocurrency. The co-creator of the blockchain is Vitalik Buterin and a group of other skilled developers.
The main difference between Ethereum and the established Bitcoin blockchain is that the Ethereum blockchain allows you to build decentralized apps. Self-executing programs called smart contracts facilitate this process. Decentralized smart contracts made Ethereum very appealing, especially for small businesses.
The blockchain split was bound to happen when the Decentralized Autonomous Organization (DAO) was created. The DAO allowed parties worldwide to pool their funds and collectively decide what project to invest in.
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 $60 million by attackers.
The entire situation divided the Ethereum community. The transparent and permanent ledger of the blockchain meant the events couldn’t be altered. However, a significant part of the community concluded that the Ethereum blockchain has to be altered to revert the attack and retrieve the funds.
Adopting a solution wasn’t possible within the community, leading to a hard fork. The blockchain that decided to keep records unaltered was renamed Ethereum Classic (ETC), while the other network rolled back the chain to undo the hack. This latter chain is the Ethereum that we know today.
The mayhem caused by the 2016 attack on the DAO, followed by the first blockchain hard fork, set the world for the first ETC vs ETH conversation.
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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 thereafter.
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 technology.
They are firm believers that no alterations should be made on the blockchain. Ultimately, we must 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. They maintain the sentiment that “code is law” to protect the immutability of a system 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 Ethereum Classic, its future seems to raise a series of concerns regarding security and scalability.
While Ethereum Classic offers smart contracts, just like Ethereum, it has struggled to gain the same popularity. It has a few things missing, which have hindered its long-term growth. A few include vision, support, and the vast developer support that the “canonical” Ethereum enjoys.
Many developers lost confidence in the network’s success after a series of 51% attacks. Some analysts have concluded that Ethereum Classic needs to adopt the Proof-of-Stake (PoS) consensus mechanism to scale the transaction limit and eliminate the threat of future attacks.
Is Ethereum Classic a good investment in 2024?
After all the controversy, you must wonder, “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 between Ethereum Classic and Ethereum grew wider as time progressed. However, they both had a bull run in 2017, dropped in 2018, and rose again in 2021, coinciding with the greater market. 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 regarding 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. It has struggled a bit without much support, vision, or strong fundamentals. 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. Considering all these 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 are reduced by 20% for every 5 million blocks. Ethereum still mints ETH coins at the same rate and has no hard cap.
At the same time, the Ethereum network switched from a proof-of-work (PoW) mechanism to a PoS in 2022. 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 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 to Ethereum being the best-performing network of the two.
The Ethereum network can perform about 30 transactions per second (tps), and Ethereum Classic can perform about 15 tps. At the same time, most of the value from existing DApps comes from Ethereum, while only a handful of DApps are deployed on Ethereum Classic.
ETH vs ETC: The final verdict
When comparing Ethereum Classic vs Ethereum, the lower price is the major attraction for the former. However, 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.
Frequently asked questions
What is Ethereum?
What is Ethereum Classic?
What are the differences between Ethereum and Ethereum Classic?
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