Ethereum Classic vs Ethereum: An Overview
Hailed as an improvement on the Bitcoin model when it first appeared, Ethereum differs in protocols to Bitcoin, the pioneering cryptocurrency. It is now an established, baseline presence in the market, largely through the prolific employment of its ERC-20 token. The fundamental adjustments made to the Ethereum chain, based on the Bitcoin prototype, made for a more productive, intuitive and secure platform from the start.
Divisions that arose on that former two-player field, between Bitcoin and Ethereum, have been repeated between Ethereum and Ethereum Classic. After a June 2016 hack that stole some $55 million from the Ethereum network, Ethereum Classic was born. To be specific and fair to the Ethereum altcoin, the attack succeeded because of corruption in a surrounding DAO, not due to an innate flaw in the coin itself.
The Ethereum DAO was a sort of decentralized pool of venture capital or even a hedge fund, built to fund dapps built on the Ethereum platform, within the ecosystem. The way the DAO was set up would give funders the power to say which dapps get funding.
In a fascinating tale from the early days of crypto, that money was eventually returned, only to be implicated again. Because of the theft and largely under the guidance of founder Vitalik Buterin, Ethereum underwent a fork.
Soft forks imply a mild tweaking, whereas a hard fork is a fundamental do-over on something on the blockchain. Ethereum hard-forked to render the stolen digital currency fictitious. As the thief had to wait some time before being able to make off with his loot, before he could it was stolen back from him.
Ethereum Chronology And Contention
Ethereum the original project forked and remained Ethereum. It is the parent vehicle that was left for dead yet somehow survived that has become known as Ethereum Classic. In a nutshell, the broader Ethereum community opted for the hard fork, and the rest is history.
Allegiances and human emotions being what they are, however, a cheekily persistent minority maintained their employment of the original chain. In the industry, a thing such as this is possible in a way no centralized business environment could imagine. The persistent users of the original Ethereum chain that suffered a DAO failure quote ideological issues to justify their support. There are also technological arguments forwarded to back up their claims.
For weeks after the DAO hack, the community had seen acrimonious exchanges, terse opinions and even some bitter feuding emerge. Investors, coders, users and developers exchanged opinions – sometimes vociferously – but the fork prevailed. It evoked such strong opinions about the core and ethos of blockchain, that it is still controversial years later. Recently, Buterin was quoted as saying that
“some bitcoin users see the hard fork as in some ways violating their most fundamental values. I personally think these fundamental values, pushed to such extremes, are silly.”
So, What Does It All Mean For Users And Investors?
Within today’s crypto-community, Ethereum’s ERC-20 token has become the default ICO token by far. It would be true to say that the majority of a project defines the project. The decentralized ledger is intrinsically democratic – or, rather, blockchain technology is intrinsically democratic by design and build.
On that basis, far more progress and real-world application has befallen Ethereum, while Ethereum Classic has played second fiddle. That said, there are few conventional means to rank the two, and Ethereum Classic is still a top-tier altcoin.
From a few months after the attack, calls have persisted for the coins to merge. It seems that the Ethereum camp has shrugged it off as a past fork and a good fix. Ironically, the Ethereum Classic camp says much the same thing of the original attack, insisting that they represent the purified original, now totally secure. Some observers are even punting ETC as a potentially profitable dark horse for investors in 2018.
The (Absent) Technical Differences
Coders and developers can point to extensive differences between the two coins. For end user purposes, there are none. Viewing both as Ethereum, both have smart contracts running the ecosystem.
A smart contract is essentially a latent confirmation or contract that exists within the blockchain. Smart contracts only execute under certain conditions and are viewed, controlled and corroborated by the user network.
The blockchain thus fulfills the role of third party authenticator in transactions. It is the unadulterated and automated nature of this protocol that is responsible for the ERC-20 token’s wide appeal and application.
Dapps built on the Ethereum network form a hotbed of development activity, as their functions and application are almost endless. Ethereum (ETH) runs on a brand new blockchain, after the fork, whereas the approximately 10 percent of diehard originals function on the old, original blockchain.
Not that this makes one iota of a difference for end users either. Besides being a refuge for the hardcore fraternity, Ethereum Classic (ETC) enjoys speculation in the current era, and such investor churn helps to keep the coin buoyant. Numerically (developers and community members), however, and in terms of value, it would ideally disappear and merge with the mainstream platform.
Clinging on principle to what they define as the nature of the immutable ledger, the Ethereum Classic community remains marginal. Confusing for newcomers as they encounter “two Ethers,” ETC’s source of persistent value stems from investor interest.
After Bitcoin’s meteoric rise in 2017, many hungry investors hope to again glimpse the possibility of millions in crypto. With that being said, it is the worst kind of speculation, as ETC currently sits at around $13. Speculators are no doubt hoping it will emulate more closely ETH’s $690 value. Preferably in a giant leap. This kind of speculation potentially generates a bubble, one that would further confuse the two coins while inflating ETC’s value beyond reality.
In contrast, Ethereum (ETH) is more reminiscent of an early Microsoft. In the knowledge that they have something truly innovative and globally applicable, Ethereum’s community are happy to grow with or without forks as needed, going forward. Very much like successive Windows versions, Ethereum is visible and progressive, and derives a legitimate value from its use case studies and copious application.
A business community called the Ethereum Alliance, consisting of large corporations like JP Morgan, UBS, Microsoft, Accenture and others, is also squarely behind Ethereum. With a market cap of around $15 billion over Ethereum Classic’s $1.5 billion, the figures tell a story.
The tussle continues, although some feel it remains an issue that slightly discredits the industry. Others note that it has to be allowed a right to exist, as the potential for this kind of conflict is the same that enables blockchain per se – and thus unavoidable, or at least always possible.
It can be said that both platforms have advantages. Real-world favor and application, however, rest squarely with Ethereum. Fierce ideological differences are strong drivers of human behavior, and it remains to be seen what the future holds for both divergent Ethers. Since the community support behind an altcoin is what ultimately determines its value and longevity, future scenarios remain impossible to predict.
It’s hard to imagine now, with Ethereum something of a darling of the community, but the $55 million hack saw its price tumble from $20 to $13. It’s also important to emphasize that the DAO failure was not an embedded fault of the original Ethereum, and instead ran independently of Ethereum. At that stage of things, it was possible for a corrupt person to attack successfully, on the back of human interaction and a loophole in that arrangement.
Those who cling to Ethereum Classic are largely those who took the code to be the law. In other words, no such fork was allowed in their eyes. The more fluid, modern and savvy majority disliked such giant theft potential and opted to iron it out for good, and haven’t looked backed.
Ironically, on the current Ethereum Classic site, at the bottom of the home page there exists an option to sign up for either a newsletter or “Hard Fork/Network Upgrade” notifications. It seems the community’s original ideological hardheadedness has softened in the desire to stay alive.