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Ethereum vs Ethereum Classic: Understanding the Differencece

Let’s explore Ethereum vs Ethereum classic concept. Ethereum and Ethereum Classic are two distinct cryptocurrencies that emerged from the same blockchain technology, but they have taken different paths due to a significant event in their history. To fully understand the differences between them, we need to explore their origins and the circumstances that led to their divergence.

Origin of Ethereum and Ethereum classic and circumstances that led to divergence

Ethereum and Ethereum Classic are two distinct cryptocurrencies that emerged from the same blockchain technology, but they have taken different paths due to a significant event in their history. To fully understand the differences between them, we need to explore their origins and the circumstances that led to their divergence.

In 2013, a computer scientist named Vitalik Buterin proposed the idea of Ethereum as a new blockchain platform. Ethereum aimed to go beyond Bitcoin’s capabilities by introducing smart contracts. Smart contracts are self-executing contracts with the terms of the agreement written in the form of code. They enable automated transactions and the development of decentralized applications (DApps).

Ethereum officially launched in July 2015 and quickly gained attention for its potential to revolutionize various industries. Its programmable blockchain attracted developers from around the world, leading to the creation of a vibrant ecosystem with countless DApps covering areas like finance, gaming, and supply chain management.

However, in June 2016, Ethereum faced a major setback when an exploit was discovered in a popular DApp called “The DAO” (Decentralized Autonomous Organization). The DAO was designed as a venture capital fund run on the Ethereum blockchain, allowing investors to contribute funds and make investment decisions through a voting mechanism.

Exploiting a vulnerability in The DAO’s code, a hacker managed to siphon off a significant portion of the funds, amounting to millions of dollars. This incident caused disturbance within the Ethereum community, sparking a debate on how to respond to the hack and recover the stolen funds.

Two distinct viewpoints emerged within the community. One faction argued for a hard fork, a radical change in the blockchain’s rules that would reverse the transactions and restore the stolen funds to their rightful owners. This group believed that taking such action was necessary to maintain trust in the Ethereum platform and protect investors.

On the other hand, another faction strongly opposed the idea of changing the blockchain’s history and advocated for preserving the immutability of the blockchain. They argued that tampering with the blockchain undermined the very essence of decentralization and the principles upon which Ethereum was built.

The conflict within the Ethereum community led to a significant decision: a hard fork in the Ethereum blockchain. A hard fork occurs when a blockchain splits into two separate chains with different rules. In this case, the original Ethereum blockchain continued with the hard fork, implementing the necessary changes to reverse the transactions and recover the stolen funds. This became known as Ethereum (ETH).

The part of the community that rejected the hard fork and insisted on preserving the original blockchain continued to use it, naming it Ethereum Classic (ETC). Ethereum Classic adhered to the principle of immutability, upholding the belief that the blockchain should remain unchanged regardless of external circumstances.

The split resulted in two separate cryptocurrencies: Ethereum (ETH) and Ethereum Classic (ETC). Ethereum (ETH) became the dominant chain, backed by the larger portion of the community, developers, and industry support. It continued to innovate and implement upgrades, including the highly anticipated shift from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) mechanism called Ethereum 2.0. The PoS mechanism aims to improve scalability, security, and energy efficiency.

On the other hand, Ethereum Classic (ETC) remained true to its roots, maintaining the original PoW consensus mechanism. It operates with a smaller community and has a more limited ecosystem of DApps compared to Ethereum.

Which is better based on Ethereum vs Ethereum classic?

Determining which is better between Ethereum and Ethereum Classic is subjective and depends on individual perspectives and goals. Both cryptocurrencies have their own strengths and weaknesses.

In terms of governance, Ethereum has a more centralized model with decision-making primarily driven by the Ethereum Foundation and core developers. Ethereum Classic, on the other hand, adopts a more decentralized approach, with decisions made through community consensus.

Ethereum’s market capitalization and popularity surpass that of Ethereum Classic. Ethereum consistently ranks as one of the largest cryptocurrencies by market value, while Ethereum Classic tends to lag behind in terms of value and recognition.

Ethereum, being the more popular and widely adopted platform, offers a larger ecosystem, extensive developer community, and a wide range of applications and use cases. It has undergone significant upgrades, such as the transition to a more energy-efficient proof-of-stake consensus mechanism, which aims to improve scalability and security. Ethereum’s continuous development and industry support have contributed to its dominance in the market.

On the other hand, Ethereum Classic maintains a commitment to the principle of immutability and decentralization. It adheres to the original Ethereum blockchain and its proof-of-work consensus mechanism. For those who prioritize the idea of preserving blockchain history and resisting any external interference, Ethereum Classic might hold more appeal.

Tabular representation: Ethereum vs Ethereum classic

Feature

Ethereum (ETH)

Ethereum Classic (ETC)

Origin

Resulted from a split in the Ethereum blockchain after a hack in 2016

The original version of Ethereum that remained unchanged

Community

Larger community with widespread usage

Smaller community with limited usage

Governance

Decisions made by the Ethereum Foundation and core developers

Decisions made by the community consensus

Development

Continual updates and improvements

Limited development and fewer updates

Ecosystem

Wide range of applications and uses

Fewer applications and uses

Immutability

Willingness to modify the blockchain's history if needed

Strong commitment to keeping the blockchain unchanged

Market Capitalization

One of the largest cryptocurrencies by value

Smaller market capitalization

Use Cases

Many different uses, like DeFi and NFTs

Limited range of uses

Scalability

Focused on improving scalability with Ethereum 2.0 and Layer 2 solutions

Limited scalability improvements compared to Ethereum's roadmap

Energy Efficiency

Transitioning to a more energy-efficient proof-of-stake (PoS) consensus mechanism with Ethereum 2.0

Relies on the original proof-of-work (PoW) consensus mechanism

Market Perception

Widely recognized and established as a leading blockchain platform

Generally viewed as the original version with less market recognition

Ruchi Tomar
Ruchi Tomarhttps://financiallanes.com
A full time blogger from last 1 year. experienced in content writing.
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