Ethereum Classic is very similar to Ethereum because it shares a common origin. It’s a blockchain that allows other applications to be built atop it. These decentralized applications, or dapps, use code known as smart contracts so that people can exchange money, property, or anything else of value without a middleman. ETC is the native currency of the network. The Ethereum Classic network also enables dApps on the platform to issue their own tokens, including NFTs.
What is Ethereum Classic (ETC)?
Prior to July 2016, Ethereum (ETH) and Ethereum Classic (ETC) were a single blockchain called Ethereum. But because of a bug in the fundraising smart contract of the DAO (decentralized autonomous organization) executing on Ethereum (this is the smart contract writer’s fault), the hacker took advantage of the vulnerability to withdraw 3.6 million Ether, equivalent to $50 million at that time.
However, in the DAO smart contract, it is specified that the funds in the wallet will be locked for 28 days. Therefore, the hacker has to wait 28 days to have full access to this $50 million. Wanting to rescue investors, the Ethereum Foundation hastened through the decision of Carbon Vote to launch a controversial bailout package, by manually changing the code on the Blockchain to recover the stolen Ether with a copy. hardfork.
Those who love, respect the immutable history of the blockchain and oppose this hard fork have decided to refuse to update, stay with the old chain (Ethereum Classic) and use the consensus of society to settle the stolen Ether. Results on July 20, 2016, at block number 1,920,000, two chains of Ethereum and Ethereum Classic were officially split and developed in parallel until today.
What is the project trying to achieve?
- Allowing anyone to build and use decentralized applications (apps).
- Unlike many other blockchain projects, Ethereum Classic does not have a central organizing committee calling the shots, so what gets implemented in the protocol is determined through an organic, meritocratic, emergent system, rather than top-down.
- Ethereum Classic, like Bitcoin, does not have a roadmap in the traditional software development sense, but rather a process that allows good features to be implemented if and when they come along and are approved by the community.
What is the unique selling point?
The Ethereum Classic Improvement Proposal (ECIP) process is how upgrades to Ethereum Classic are discussed and rigorously vetted by its developer community. This process is open, and anyone can contribute by drafting an ECIP that may one day be included in Ethereum Classic.
Move Slowly & Don’t Break Things
Typically, implementing new features requires overwhelming support or, at least, no significant opposition from the Ethereum Classic community, making ETC, like BTC, fairly cautious in its technological development. With no central group biasing decisions about what upgrades are implemented, the threat of a chain split due to significant pushback means that Hard Forks on ETC tend to be safe, incremental and above all non-contentious.
Rather than a “move fast and break things” mentality, which can cause financial harm if things go wrong, significant updates are typically mulled, refined and tested over long periods before being implemented into the protocol so that consensus can be properly reached before a fork.
Additionally, care is taken to ensure that, as much as possible, contracts that were deployed as far back in 2015 can faithfully operate in perpetuity and that Code is Law is maintained.
Ethereum Classic maintains compatibility with Ethereum Virtual Machine, it inherits all the innovations that happen on other EVM chains, including contract systems, developer tooling, libraries and other general concepts funded by and developed primarily for these other chains.
Optimistic Rollups, a promising Layer 2 technology that enhances scalability via off-chain transactions, is an excellent example of this. Thanks to the nature of Free Open Source Software, millions of dollars of research and development were spent by projects and teams that had no association with Ethereum Classic. This innovation, thanks to generalized EVM compatibility, has indirectly increased the utility and value of ETC.
As of writing, 2022 has just arrived, and ETC is beginning the year experiencing a surge of activity. A litany of new apps and users have organically coalesced, and the ETC ecosystem is starting to show signs of network effects, which will snowball adoption as the network becomes more useful and valuable.
Recent growth is partly thanks to a growing army of Ethereum Classic content creators and influencers who have been creating videos and memes, driving adoption through social media.
Ethereum mainnet chain, although experiencing some minor delays, is looking increasingly close to completing a migration away from Proof of Work to Proof of Stake, known as The Merge. For Ethereum Classic this will be an extremely relevant event, as it seems likely newly evicted GPU miners will be looking towards other chains to mine, and Ethereum Classic is an obvious choice.
The migration of miners from ETC to ETH will likely bring a new wave of interest to the Ethereum Classic ecosystem, increase the security of the network, and accelerate adoption and network value.
With Ethereum Classic aiming to maintain Code is Law for many decades, if not centuries to come, a feature of major utility will be that of versioning of deployed contracts. This provides several significant advantages to the long term operation and maintenance of Ethereum Classic, notably that it makes it far easier to maintain Code is Law whilst still providing flexibility for upgrading contract execution in the future.
Rather than worrying about whether a protocol change, such as gas repricing, would break old contracts, versioning would mean deployed code is guaranteed to always run on a compatible version of the EVM based on the block number it was deployed to. In additional, future contracts could opt-in to functionality that would otherwise break old contracts, meaning Ethereum Classic can provide new technology like signature schemes, add or modify opcode behavior, etcetera, without affecting existing applications.
It is becoming increasingly clear that the only reasonable ways to scale blockchains is in layers. With Bitcoin’s Lightning Network spearheading this promising new domain, Ethereum is following in the form of State Channels, Optimistic Rollups, zk-Rollups, and other emergent technologies.
Layer 2 promises to provide adequate assurances of decentralization and trustlessness, with much greater transaction throughput by managing state off-chain and using the base chain for settling this state. In theory, there is no upper bound to the number of transactions per second in many Layer 2 systems, and can satisfy civilization-scale usage requirements.
With Ethereum Classic’s EVM and commitment to Proof of Work that will eventually dominate mining in ETCHash or SHA3, it will be one of the few choices for a Sovereign Grade base layer that can support a full range of L2 solutions.
What is the difference between Ethereum and Ethereum Classic?
One of the main differences between Ethereum is that it has plans to migrate from proof of work (PoW) to a new system called proof of stake (PoS). Ethereum Classic, however, intends to keep traditional mining on its own blockchain after Ethereum migrates to PoS.
Also, similar to ETH, new ETC is issued to the circulating supply as a reward for miners and has a maximum supply of 210,700,000 coins, whereas ETH has no fixed supply.
Originally, the Ethereum blockchain was created as a single blockchain in 2015, but in June of 2016, the blockchain was hacked resulting in $60 million of stolen crypto. As a result, a hard fork was performed to secure the network, hence how the new Ethereum emerged and created two separate versions.
Now that we know the difference between ETH and ETC, we can discuss how each one is used.
- Token Name: Ethereum Classic
- Ticker: ETC
- Blockchain: BNB Chain
- Token Type: Utility & Governance
- Total Supply: 210,700,000 ETC
- Circulating Supply: 134,575,253.60 ETC
The Pre-Mine Ethereum Classic’s token distribution follows that of Ethereum, as the two chains have a shared history. Before the eventual split sparked by The DAO incident, ETH and ETC were the same assets (originally known as ETH).
The original distribution event occurred through a public token sale managed by the Ethereum Foundation, which sold roughly 60 million ETH (80% of the initial 72 million ETH supply). The sale took place between Jul. 22, 2014, and Sep. 2, 2014. The remaining 12 million ETH (20% of the initial supply) were allocated to the Foundation and early contributors. Of the ether sent to the Foundation:
- 3 million were allocated to a long-term endowment
- 6 million were distributed among 85 developers who contributed prior to the crowdsale
- 3 million were designed as a “developer purchase program” that gave Ethereum developers the rights to purchase ETC at crowdsale prices.
Token Release Schedule
When Ethereum Classic and Ethereum went there separate ways on July 20, 2016, anyone who owned ETH received an equal amount of ETC via a hard fork airdrop.
ECIP-1017 activated on December 11, 2017. The proposal introduced a disinflationary token issuance policy, in which the block reward is reduced by 20% every five million blocks, and stated the total supply would not exceed 210.7 million ETC. On May 29, 2018, the Ethereum Classic community accepted ECIP-1041, effectively diffusing the Difficulty Bomb.
Ethereum Classic underwent its second block reward reduction on Mar. 16, 2020, dropping the reward per block from 4 to 3.2 ETH. Per ECIP-1017 specifications, the reward will be reduced to 2.56 ETC at block 15,000,000 (expected to arrive on Apr. 15, 2022).
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Token Use Case
Like ETH on Ethereum, the primary use for the ETC asset is to pay for the decentralized computation when using the network. ETC used to pay for executing transactions and smart contract functions is referred to as gas, and the costs associated with these actions are known as gas costs. ETC is also a native token with a monetary policy that creates a predictable, disinflationary emission schedule with a fixed supply cap. These qualities aim to give ETC store of value (SoV) propoerties. This asset also serves as a reward to miners for contributing resources to the network.
Market and Community
Currently, the main focus for ETC is to support the concept of code is law. Essentially, code is law simply means that no one has the right to censor the execution of code on the ETC blockchain. Ethereum Classic still facilitates running smart contracts and offers the benefit of decentralized governance. In other words, the contracts can be enforced without a third party involved, such as a lawyer or another overseeing entity.
Ethereum Classic has 646.6K Followers
When Ethereum initiated a hard fork, it took most of the key influencers with it. This included the Enterprise Ethereum Alliance, which is made up of massive companies like Microsoft that want to increase the adoption of Ethereum. (Although Digital Currency Group founder Barry Silbert maintains an active interest in ETC.)
In the battle of fork or no fork, Ethereum has come out on top. It enjoys a better reputation, more investment, and a higher currency value—but Ethereum Classic still has a community of diehard users and developers, as well as a multi-billion dollar market cap, good enough to rank in the top 50 of all digital assets. Ethereum Classic is still the underdog, but that’s never been a bad thing in crypto.
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