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What Are The Differences Between Ethereum and Ethereum Classic?



Ethereum is the biggest blockchain in the world. But what is Ethereum Classic?

The price of ETH is slowly inching closer to the $2000s nearing the long-awaited transition to a Proof-of-Stake (PoS) consensus mechanism in September 2022. But what is its counterpart Ethereum Classic (ETC), and how are they different?

Ethereum is the second largest network and the biggest blockchain in the world. In 2021, it surpassed Bitcoin in transaction numbers. Most dapps are built on Ethereum, and it takes first place for the number of NFTs developed and traded on its blockchain. Dapps are decentralized applications and are growing in popularity as more people enter the blockchain space.

Ethereum Classic (ETC), on the other hand, is a smaller network with a much lower market capitalization than Ethereum (ETH) and a fixed supply of 210,700,000 coins. This article will compare Ethereum with Ethereum Classic to better understand the popular blockchain before the merge. 

What is Ethereum? 

Ethereum is an open-source, decentralized computing network enabling users to transact with one another using smart contracts and run decentralized applications. The native token of the Ethereum network is ETH.

The ETH token uses the ERC-20 technical standard allowing the exchange of smart-contract-enabled tokens in the Ethereum blockchain. ETH does not have a limited supply of coins; these tokens are interchangeable with others and are thus fungible. 

Using DappRadar´s Token Explorer in the portfolio tool, we can see that ETH is currently trading at $1982,83 up 3.35% in the last 24 hours.

The portfolio tool combines all the things you can do with DappRadar allowing users to oversee and manage their digital assets from different blockchains with our actionable data.

You can swap tokens on Ethereum and other blockchains using the DappRadar Token Swap.

What are smart contracts?

Smart contracts are digital contracts on a blockchain, a computer protocol facilitating, verifying, or enforcing their negotiation and performance. They enable decentralization and allow credible transactions without third parties.

Users do not need to rely on ‘trusted’ middlemen anymore due to smart contracts. They provide many advantages to users like avoiding the fees associated with using third parties.

Here are the advantages provided by smart contracts : 

1. Speed

Smart contracts use code to automate tasks and save hours in various everyday business processes.

2. Savings

Smart contracts use code to automate tasks and save hours in various everyday business processes.

3. Trust

A shared ledger encrypts your documents.

4. Autonomy

The network manages the execution automatically, rather than by one or more, possibly biased, individuals. You’re the one making the agreement; there’s no need to rely on a broker, lawyer, or other intermediaries to confirm.

5. Backup

Imagine if your bank lost your savings account. On the blockchain, your documents are duplicated many times over and can be recovered with ease.

6. Safety 

Cryptography is a complex and solid form of safety that is used for the encryption of websites. In short, it keeps your documents safe.

7. Accuracy

Automated contracts are not only faster and cheaper but also avoid the errors that come from manually filling out heaps of forms.

What is Ethereum Classic and how did it start? 

The Ethereum blockchain started out as what we know today as Ethereum Classic, and it was split into two separate networks following a huge hack where the perpetrators withdrew a large amount of ETH from a successful ICO (Initial Coin Offering) project called The DAO. 

The Ethereum community was divided, with one side proposing to reverse the Ethereum blockchain to rescue the affected investors and others arguing that the investors of The DAO should face the consequences and not be bailed out.

The graphic below shows the key differences between the two networks for a quick overview.

Source: Robin Gonzalez Kristensen, DappRadar

In the end, the majority voted to restore the funds through a hard fork. The newer network is known as Ethereum and uses ETH or ether as its cryptocurrency. The older and smaller one, known as Ethereum Classic, uses ETC.

Why did many Ethereum users disagree with the hard fork?

The chore pillars of blockchain technology are immutability and decentralization. For many crypto enthusiasts, the Ethereum leadership´s intervention went directly against these principles by rolling it back to before the heist.

Those users who disagreed with the new upgrade decided to preserve the old programming and became what is now Ethereum classic. One of the most significant differences between Ethereum and Ethereum Classic is that Ethereum has plans to migrate from proof of work (PoW) to a system called proof-of-stake (PoS). While Ethereum Classic intends to keep traditional mining on its blockchain.

Closing 

Ethereum can be considered the transactional and operational layer of the blockchain and is arguably more relevant than ever. Importantly, one of the biggest differences is that Ethereum Classic (ETC) does not follow the same price trajectory as Ethereum (ETH).

These two ecosystems come with their communities and different pricing for their native crypto tokens. Although both Ethereum and Ethereum Classic offer smart contracts, Ethereum’s ETH is the most widely traded asset. 

The adoption and use-cases of the Ethereum blockchain are significantly higher than for any other blockchain network. Moreover, users gravitate more toward Ethereum than Ethereum Classic due to its associated safety and security.

Finally, the Ethereum merge aims to bring significant updates to make Ethereum even more attractive in the future. 

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