Difference Between Ethereum (ETH) & Ethereum Classic (ETC)
This guide is created to help answer some of the questions regarding terms like Ethereum (ETH) and Ethereum Classic (ETC)
If you have been following the crypto currency news lately, you must have noticed that talks about Ethereum as the future currency and investing in Ethereum at this time is a prudent decision is making waves.
However, there may be questions in the minds of some regarding the terminologies used in reference to the coin Ethereum.
It won’t take long before an investor in Ethereum and intending investor start to ask questions which hinges mainly on whether there are two Ethereums in the market.
What is Ethereum?
Ethereum is a blockchain-based crypto currency system that enables developers to build and deploy decentralized applications by running smart contracts, without the possibility of downtime, censorship, fraud or interference from a third party.
The developers are rewarded with Ether, which is a necessary element (fuel) for operating the distributed application platform Ethereum. It is a form of payment made by clients of the platform to the computers executing the requested operations.
The Ethereum wallet is a gateway to decentralized applications on the Ethereum blockchain. It allows you to hold and secure ether and other crypto-assets built on Ethereum, as well as write, deploy and use smart contracts.
The Ethereum Classic
Ethreum Classic is not to be seen as a new crypto currency. It is rather a split from the already existing Ethereum. It happens that sometime in May 2016, a certain application called DAO (Decentralized Autonomous Organization) which was built on Ethereum blockchain collected funds from investors to invest in future companies that will be formed on Ethereum blockchain. The funds collected from the crowd sale amounted to approximately $150 million.
Few days after the crowd sale, the DAO got hacked and about $60 million funds was stolen. But the hacker could not cash out the money due to the condition of 25 days of money in separate account before it can be withdrawn. To recover the money back from the Ethereum Organization with the help of majority of Ethereum miners (about 80%) did a hard fork (change in code).
Due to the feature of the DAO code, Ethereum stolen from the DAO was locked in the hacker’s contract after the hack for a period of 28 days at which point they were completely isolated from entering the rest of the network.
This gave the Ethereum community enough time to unite and devise plans to deny the hacker from accessing the stolen Ethereum.
Since not all Ethereum miners was on board to do the hard fork, after the moeny was recovered and returned to the original investors, the rest continued with the original initial blochchain. This is the Ethereum Classic. Then the blcokchain that was formed after the hard fork is called Ethereum.
Which Is Better?
Considering the nature which surrounds the reason for the fork, giving a balanced answer to the question may not be that easy. If you’re approach to investing in Ethereum is ethical, then you will be considering investing in Ethereum Classic as you will easily believe that an immutable blockchain should not be modified under any circumstances when nothing was with the blockchain, currency or protocol.
However, the current coincap market should be considered before investing in Ethereum classic. In monetary and investment situations Ethereum Classic is priced lower than Ethereum. It works to execute smart contracts as the system was intended to do. This followed the rule of the blockchain being immutable irrespective of the circumstances, as there was no fault with the blockchain, or the Ethereum protocol.
If you are one who feel that justice must be served, and that the fork was the right thing to do to deprive the hacker of his funds, at the expense of modifying the blockchain based on consensus decision, then investing in Ethereum is your call. The current investment price of Ethereum is higher than that of Ethereum Classic.
The Ethereum functions as intended for smart contracts, and potentially with a higher security margin due to hashing power, but there is the possibility of the community forking again in the future should a similar situation arise, bringing one to the question of the immutability of the blockchain in such a case.
The goal of the fork was achieved, the lost funds was returned to the investors, so you can put this aspect into consideration. Is there going to be another large contract bail out? Or is it just a one-off? There isn’t enough information available on this issue, but this also should be considered.
From the above narration, you will come to understand that you need to do a careful research before deciding whether to invest in Ethereum or Ethereum Classic. Both are there in the market for their own reasons, so you need to consider both your financial, and ethical stance and beliefs before making a choice on the version of Ethereum you would like to support.
The forked Ethereum looked like the more promising investment as at the present since it holds the higher price, nevertheless there are many matters you should put into consideration, and due to the volatile nature of crypto currencies, invest only what you can afford to lose and the situation is liable to change with little or no notice at all.
This article has been written in a way to present an unbiased picture of the two coins. Both Ethereum and Ethereum Classic nodes have different views on what the consensus rules should be, and act accordingly. Ethereum nodes reject Ethereum Classic blockchain entreis, and vice-versa.
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The apparent question triggered by this article is; apart from when the system does not work properly can a blockchain be immutable? Or should consensus come to the agreement to implement such a hard fork during times like the DOA hack?
With information provided on both sides, you have the chance to make the decision of which version of Ethereum you wish to support, or if you want to invest at all. Make your proper research when investing in Ethereum, and never invest what you cannot afford to lose.