Ethereum vs Ethereum Classic

Samuel Gitonga
11 Min Read

Nothing captures the impact that Ethereum and Ethereum Classic have had in finance more than the non-cooperative game theory.

The doctrine used to study the behavior of economic agents argues that without a middleman to establish trust between two parties, they are unlikely to cooperate — even if forging alliances is in their best interests.

Think of two businesspersons on opposite ends of the world. Each of them has what the other needs. However, the lack of a mechanism to facilitate the trade hinders the transaction.

Both Ethereum and Ethereum Classic boast a feature that makes it possible for all parties to get what they want without an intermediary.

But first things first. If you haven’t grasped the difference between ETH and ETC, this article covers everything you need to know.

What Is The Difference Between Ethereum and Ethereum Classic?

The recent solid performance of their native tokens has triggered the Ethereum Classic or Ethereum investment debate. But what’s the difference between ETH and ETC?

Ethereum

Ethereum is a public blockchain that allows any developer to create next-generation decentralized applications (dApps).

The platform also allows users to hold assets (including its native token, Ether-ETH), transact and communicate without being controlled by a central authority.

Ethereum’s backstory is quite interesting. Back in 2009 when Bitcoin was launched, it was a game-changer. However, the pioneer blockchain had its imperfections.

Enter Ethereum. In 2013, Canadian programmer Vitalik Buterin first pitched Ethereum as a more flexible and scalable option than Bitcoin. He then captured his vision in a white paper published in 2014.

The launch of Ethereum in 2015 has turned out to be one of the most inspiring crypto success stories. Since then, the blockchain has become the preferred option for large organizations.

Even more impressive is the fact that its native token has grown into the second most valuable cryptocurrency.

What is Ethereum Classic?

Ethereum Classic (ETC) is a decentralized, open-source, blockchain-based computing platform that runs on smart contracts.

The main difference between Ethereum and Ethereum Classic is that the former maintains the original Ethereum blockchain.

This leads us to our next section detailing the history between the two.

Ethereum vs. Ethereum Classic: A Shared History

As the name suggests, Ethereum Classic is a spin-off of its more valuable peer. Its birth was a by-product of ideological differences that split the Ethereum community right down the middle.

How did this happen?

In 2016, a third-party application running on the Ethereum blockchain experienced a major hack, resulting in the theft of Ether (ETH) worth millions of dollars.

Ethereum responded by initiating a hard fork, defined as a radical change to the protocols of a blockchain network. This was done to thwart the infiltration and ensure that the Ether was returned to its original owners.

The development led to the formation of two factions. One supported the edited blockchain — now known as Ethereum.

The other half preferred to stick with the original ledger, now known as Ethereum Classic.

This brief history defines the Ethereum Classic vs Ethereum rivalry.

Ethereum Classic vs Ethereum: Price

Ether has morphed from an asset valued at under $1 in 2015 to the second most valuable cryptocurrency after Bitcoin, according to cryptocurrency statistics.

As of August 26, 2022, Ether was trading at $1,507. On the same day, Ethereum Classic was priced at $33.89.

Ether also has a much higher ceiling, evidenced by its all-time high of $4,866 on November 10, 2021. Ethereum Classic recorded its best-ever price on May 6, 2021, when it hit $167.

Security

Considering Ethereum and Ethereum Classic are cut from the same cloth, it’s only natural that they used the same security technique for a long time.

Ethereum

For seven years following its introduction into the market, Ethereum was secured by the proof of work mechanism. However, after years of planning, Ethereum’s developers announced they would be making the switch to the less energy-intensive Proof of Stake in September 2022.

What is Proof of Work?

It is a mechanism employed by cryptocurrencies to verify the accuracy of new transactions using distributed network participants known as miners.

What is Proof of Stake?

It’s an alternative technique that reduces the computational work needed to validate transactions by eliminating the competition aspect that drives (PoW). Instead, the system randomizes who gets to mine.

Ethereum Classic

Ethereum Classic uses Proof of Work. However, after the Ethereum Classic blockchain suffered 51% attacks in 2020, it made a key change to the Ethash mining algorithm.

The Ethash epoch duration period was doubled to 60,000 from 30,000, solving a critical security issue.

Similarities Between Ethereum and Ethereum Classic

Despite the Ethereum vs Ethereum Classic variations, the two projects have similarities. These include:

Smart Contracts

Both versions of Ethereum support smart contracts functionality. These are programs stored on a blockchain that self-execute if some predetermined conditions are met.

Decentralization

Both Ethereum and Ethereum Classic are built on decentralized systems. Therefore, both are free from government regulation.

Differences Between Ethereum and Ethereum Classic

Granted that Ethereum and Ethereum Classic communities subscribe to polar opposite ideologies, it makes sense that they have effected some policy changes that make them uniquely different from each other.

The variations include:

Immutability

The Ethereum Classic camp has never wavered from the idea that its biggest perk is its immutability, and no one should be allowed to manipulate it, even if it is for a good cause.

That’s why the Ethereum community went through a hard fork in 2016. It is also the reason why the Ethereum Classic vs Ethereum debate has kept lurking.

Consequently, Ethereum Classic uses the original Ethereum system that discourages the alteration of transactions in the blockchain’s history.

The Ethereum blockchain, on the other hand, allows previous transactions to be adjusted and altered.

Value

Ethereum is significantly more valuable than Ethereum Classic. The cryptocurrency was valued at $1,507 per token on August 26, 2022. It also featured a market capitalization of $184 billion.

On the specified date, Ethereum Classic was valued at $33.89 and had a market capitalization of $4.6 billion.

Validation process

Ethereum used the Proof of Work consensus mechanism before announcing intentions to transition to Proof of Stake in September 2022.

Meanwhile, Ethereum Classic uses Proof of Work.

Governance

Ethereum relies on the Ethereum Foundation to make decisions and craft and execute a vision for the project.

Ethereum Classic relies on groups and individuals to make governance decisions and map out its goals.

Limit

Although Ethereum doesn’t have a limit on unit production, its growth rate is capped at 4.5% each year.

Ethereum Classic is limited to 230 million units in its lifespan.

Where To Buy Ethereum and Ethereum Classic

Despite being classified as a volatile asset, most financial experts believe top cryptocurrencies like Ethereum have long-term value.

Ethereum Classic has also shown considerable progress to at least come under consideration.

If this aligns with your investment goals, there are several trusted exchanges where you can buy altcoins like Ethereum or Ethereum Classic. These include:

[blog_table]

Final Thoughts

Cryptocurrencies have no intrinsic value. They are not backed by any asset or government institution. Instead, they exist based on belief. In the event that investors become convinced that asset x no longer has value, it’s likely to come tumbling down.

The main difference between Ethereum and Ethereum Classic is ideology. The latter swears by the original Ethereum blockchain.

At the moment, ETC is largely a speculative asset, although more people might eventually buy into its potential to boost it to the higher leagues.

Meanwhile, Ethereum continues to go from strength to strength.

FAQ
How old is Ethereum?

As of August 2022, Ethereum is seven years old. The blockchain created by Canadian programmer Vitalik Buterin alongside other co-founders went live on July 30, 2015.

Is Ethereum Classic like Ethereum?

Although both originated from the same blockchain, they are very different. Ethereum is widely adopted, has an unlimited supply, and is the second most valuable cryptocurrency.
Meanwhile, Ethereum Classic is a speculative asset classified under the gamble category and limited to 230 million units in its lifespan.

Is Ethereum Classic a good purchase?

Possibly. Like most cryptocurrencies, the token is volatile and occasionally records sharp price changes, which can either be positive or negative.
Some experts project the asset will increase in value over the next two years. Regardless, it’s wise to do your own research before making an investment decision.

Share This Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *