The use of cryptocurrencies might be puzzling at times. The vast array of various cryptocurrencies available on the internet contributes in some way to the overall sense of bewilderment among investors, particularly younger ones. One contributor to this perplexion is the names themselves, which often confuses new traders.
If we compare Ethereum to Ethereum Classic, for instance, one may ask: Are these two the same, or are they different? Which one is the superior option? Which one should I invest in? You might have these questions too, and so the following guide will talk all about these two similar-appearing yet significantly different cryptocurrencies in order to clear the confusion in your head.
Speaking of cryptocurrencies, when you first start researching about them, the odds are good that the first asset you read about is Bitcoin. When you study a bit more, you’d learn about the second most popular crypto, Ethereum, and then eventually, you’ll come across the term Ethereum Classic too.
Recently, a division emerged in the cryptocurrency world as a result of the competition between Ethereum and Ethereum Classic. Despite the fact that each of these blockchain technologies originated from the same chain, both are distinct from one another, and each includes its very own native token.
It’s crucial to recognize the distinctions between these two cryptocurrencies prior you put your money in either one, so let’s compare Ethereum and Ethereum Classic.
What is Ethereum?
Ethereum is a kind of cryptocurrency which is built on blockchain technology and was developed in the latter half of 2013. It happened to be among the handful of cryptocurrencies that existed at the time that these virtual assets were initially introduced to the market. The smart contract was a breakthrough new idea that was developed by Ethereum in the field of distributed ledger technology.
Blockchains are given additional powers via smart contracts, including the power to communicate with the physical universe using new and interesting approaches. A different type of successful implementation of strategies known as the DAO was created through the utilization of smart contracts, also known as a decentralized autonomous organization.
The DAO was originally conceived as a cryptocurrency corporation that would participate in emerging blockchain businesses. Individuals placed their Ether inside the smart contracts of the DAO, which resulted in them receiving voting tokens, thereby making profits out of their investments.
To get financing, organizations would make presentations to DAO investors, which would then utilize their tokens to cast a ballot about whether or not to support the initiatives financially. If the initiatives were completed successfully, there would be a dividend profit amount that would be distributed to all of the people who owned DAO tokens.
Individuals were granted actual control over the manner in which their income was managed via the use of the DAO, which was fundamentally an equity operation that had all of the financial personnel and administrators substituted by a mere piece of a computer.
It was an idea that was widely accepted and even implemented by large businesses and giant tycoons all across the globe. For your information, I would like to add how participants of the Ethereum blockchain contributed more than $150 million worth of Ethereum to the DAO’s fundraising effort.
On the other hand, just as it is inevitable that every success will be followed by collapse at some point in time, the same thing also occurred with DAO. In 2016, a security flaw in one of the DAO’s smart contracts resulted in the theft of Ether worth fifty million dollars belonging to stakeholders.
The ecosystem around Ethereum arrived at the conclusion that the attack posed a significant obstacle to the continuing operation of the blockchain as millions of Ether were lost, and no one knew who took them and how exactly did this huge theft happen.
As a result, all crypto researchers came to the conclusion that all Ethereum servers should work together to revert the database and erase the activities that were associated with the breach. The compromise of the DAO has been reversed upon that Ethereum blockchain, making it seem as if it never took place.
What is Meant by Ethereum Classic?
Because it was developed using the same software as Ethereum, Ethereum Classic has a lot of similarities with the original cryptocurrency. These similarities can be seen in a variety of different aspects. It is a kind of electronic currency that, on atop within itself, makes it possible for other services to be developed.
As a direct result of the implementation of decentralized programs, private parties no more need to have the assistance of a middleman in order to carry out transactions involving the trading of knowledge, goods, or other types of commodities.
These applications take advantage of a specific type of software referred to as smart contracts, which comprise the basic components of blockchain technologies that were already founded on Ethereum.
However, as we have just seen, in 2016, a gang of thieves found a critical vulnerability in the Eth platform and launched their malicious attack on the Ethereum network.
In light of these occurrences, the idea of initiating a “hard fork” on Ether in order to reclaim the funds has gained the most attention and support among those interested in the topic.
A hard fork happens when the two operating nodes are unable to reach an agreement with one another, and therefore results in the creation of two distinct blockchains that are nearly identical to one another.
Splitting in such a calculated manner is frequently referred to as “hard forking.” However, hard forking occurs only extremely rarely. However, one known hard Fork produced by the cryptocurrency realm is known as Ethereum Classic.
Moreover, it should be noted that a hard Fork leads to major changes in the underlying crypto code. These changes may result in either a complete or partial upgrading of the network in regard to its usefulness and efficiency.
The same happened in the case of Eth and Ethereum Classic. Though the idea of blockchain and ledger is the same in both, there are major distinctions between the two tokens that we’ll be looking into in a while.
Latency on the Ethereum platform continues to be a problem, particularly during times of high use. Ethereum Classic, on the other hand, is really not plagued by these problems and works pretty fast, even when the network gets really busy.
It’s possible that if such scaling problems persist into the foreseeable future, the internet could wind up being a “multi-blockchain” environment. This might make fewer networks like Ethereum Classic increasingly enticing.
Moreover, since there are striking similarities between the underlying architectures of the two platforms, it should not be difficult at all for decentralized applications (apps) developed on Ethereum to be ported over to Ethereum Classic at whatever moment necessary.
Additionally, many Bitcoin supporters claim that many Ethereum apps are unnecessary and that executing them on a decentralized network is very wasteful. According to this viewpoint, the one and only apps that ought to be executed on distributed systems are the ones that are required to do so.
When it concerns operating apps that may get in trouble with authorities, the focus that Ethereum Classic places on maintaining its decentralized nature may, in perspective, turn out to be an excellent choice.
Comparison Between Ethereum and Ethereum Classic
Given their comparable lineage, linked blockchain background, and then use scenarios, the twin organizations, Ethereum and Ethereum Classic, are much more identical to one another than they are distinct from one another, as was previously said.
Even though they have gone their own ways in the past six years, there are still several striking similarities between them. The following is a list of similarities between Ethereum and its offspring, Ethereum Classic:
Both networks use the widely used proof of work (PoW) consensus technique, which was first implemented on the Blockchain system and is considered to be its namesake.
Despite this, Ethereum is currently embarking on an upgrade to the system called Ethereum 2.0. This upgrade would replace mining with a process called staking, Proof of Staking, and it is expected to be completed in the near future.
Ethereum Classic and Ethereum were both created with the intention of functioning as decentralized platforms that are not under the control of one entity. In order to run their blockchain, businesses make use of a large number of computers, also known as nodes.
These systems, nevertheless, are not under the control of one authority but are rather ruled by all those who have their shares in the cryptocurrency.
Ethereum pioneered the introduction of smart contract capabilities to blockchain networks by giving programmers a decentralized framework on which to build autonomous programs. Those contracts stipulate that individuals must adhere to particular operational requirements at all moments, therefore assuring the reliability and safety of the network.
To add on, in spite of the fact that they separated in 2016, ETH and ETC continue to cater to similar loyal fanbases and utilize the same application basis. Indeed the process of developing decentralized applications, also known as dApps, is comparable across both systems too. This is because programs that are produced on one system may be executed on the other.
In particular, the cryptocurrencies of the network segments, ETH and ETC, are utilized for the payment of gas costs in order to facilitate the implementation of decentralized applications on corresponding virtual machines.
Even while Ethereum Classic operations are unchangeable, like Ethereum’s, both blockchains may be used in a pseudonymous fashion. The public keys associated with a transaction would remain accessible, but the individual’s identity and any additional data that may be used to recognize them will just not display on the platform.
This way, the architecture guarantees critical information stays confidential, and no authorized parties ever get exposed to it.
Key Differences Between Ethereum and Ethereum Classic
The two very different crypto tokens, Ethereum and Ethereum Classic, have, during the course of their respective existences, navigated their own courses with regard to the implementation of network upgrades, which has resulted in the development of their own characteristics that significantly differ from one another.
The following is a summary of several of the main distinguishing characteristics that allow you to differentiate ETH from ETC:
Ideology and Governance
The prime explanation for why members of the Ethereum network went through a controversial hard fork in 2016 was because of the divergent points of view among the miners, namely the fact that one camp, Ethereum Classic, adhered to the belief that “Code is Law,” whereas the opposing side did not.
The ETC ecosystem has always stood by the opinion that the data integrity of the network is the primary benefit of the technology and that nobody should ever seek to influence the cryptocurrency in order to accomplish their goals, regardless of how admirable those goals may be.
Moreover, to a large extent, Ethereum is dependent on the Ethereum institute to facilitate the implementation of administration choices, to provide assistance for the environment by means of the residency programs, and to assist in articulating a different outlook for the Ethereum virtual machine. Ethereum Classic, on the contrary hand, does not have any kind of basis.
Conversely, ETC strengthens its ‘Code is Law’ attitude by relying on independent production organizations and people to accomplish its management goals, as mentioned earlier.
Transactions and Quickness
Both systems process between 12 and 15 transactions every second typically. Moreover, the timeframe it requires to obtain Ether fluctuates substantially based on the amount of ETH gas amounts incurred. The greater the cost, the more quickly the transaction will be completed. Additionally to the fact that Ethereum activities need ETH to transmit.
Even ERC-20 tokens generated on Ethereum need ETH to transmit. This ensures that the commodity is always in request, which increases since more tokens are being developed for the ecosystem.
The ETH 2.0 version, which has been spreading out since the beginning of 2020, would allow Ethereum to handle a greater total number of transactions in a given second.
The staking functionality introduced by the ETH 2.0 upgrade requires a deposit of 32 ETH, and the number of ETH held in the service agreement continues to increase each day.
Tokenomics is a macroeconomic strategy imposed by building contractors that guide the pace of token production, the way in which tokens are issued, and, indeed, the distribution of these digital tokens. Tokenomics is an abbreviation for token economics.
In the beginning, preceding the Fork, Ethereum adhered to a distribution policy of infinite amounts, which it continues to adhere to the present day. Just after hard Fork in 2016, the fundamental designers of ETC adjusted this regulation such that the maximum production of ETC on the internet will be limited to 210,700,000 coins.
Mining has been responsible for the release of around sixty-five percent of these coins into existence as of this moment.
To this point, according to public guidelines by major players in both camps, the organizations are set to draw even farther apart as their anticipated developmental plans are being implemented. This is because both groups have different ideas about how the initiatives should be developed.
In order to solve its sustainability problem and take advantage of The Merge, Ethereum will shortly switch from either a mining infrastructure to a staking infrastructure. Nevertheless, instead of totally switching to a PoS method, Ethereum Classic is trying to use substituent technologies in order to improve its utilization and management approach.
Ethereum has always had a far bigger investor base than Ethereum Classic and so a greater market share too. As a direct consequence of this, ETH now comes with a bigger price tag, and its market valuation is nearly 40 orders of magnitude larger than that of ETC according to the amounts at which they are now trading.
The economic structure of Ethereum Classic is significantly closer to Bitcoin. Bitcoin supporters often take a strong stance against Proof of Stake, something they believe suffers from basic problems and would, in the foreseeable future, lead to an increased tendency toward totalitarianism.
By deciding to go in the direction that it chose, Ethereum Classic has strategically established itself as a rival to Ethereum that really has preserved the fundamental principles that underpin Bitcoin’s widespread appeal.
There is a significant level of enthusiasm for the Ethereum blockchain among scientists and prominent figures in the business. In practice, this means that the Ethereum Classic cryptocurrency will be able to replicate all of the new features, developments, repositories, and functionalities that have been made to the Ethereum blockchain.
This is one of Ethereum Classic’s primary goals: to keep deployable similarity with the earliest Ethereum network. In this manner, Ethereum Classic seems to be intended to provide several of the benefits that Ethereum does; nevertheless, it does not include a handful of architectural decisions that are controversial with several cryptocurrency customers and programmers.