If you are interested in investing in Ether, you might have come across two concepts that are named similarly but have numerous differences: Ethereum and Ethereum Classic. The both platforms have native coins, represented by ETH and ETC, which are also referred to as Ether, but over the years, their market cap and prices have been dramatically different. Many people don’t really know the discrepancies between the two of them, as they share the same origin. The story starts with Ethereum, a platform that is renowned for its native cryptocurrency, Ether. Over the years, Ether has become the second-largest digital coin by market cap, which has also impacted the Ethereum price USD.
However, in 2016, the blockchain was split, as a hacker stole 3.6 million ETH tokens and compromised the security of the network. As a result, Ethereum was forked into Ethereum Classic, the original platform, and Ethereum, the new blockchain that brought all the features of the previous network. The split was not only technological but also ideological, as people had different opinions. Some wanted to reverse the hack with the help of a new blockchain, while others believed in the immutability of the first platform and wanted to continue to operate on it. The original platform received the name of Ethereum Classic, and continues to follow the principle of blockchain technology up to this day.
Let’s find out more about the two concepts.
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Ethereum vs Ethereum Classic: Exploring their origins
Both Ethereum and Ethereum Classic share quite the same origin, where the first version of Ethereum was developed in 2015, after the co-founders, including Vitalik Buterin, managed to raise the initial funds with the help of a crowdfunded process back in 2014. The network was developed to fix the shortcomings of Bitcoin and offer many more alternatives, including decentralized applications (dApps) and smart contracts. Unfortunately, in 2016, a negative event occurred, known under the name of the DAO hack.
DAO is a decentralized autonomous organization that is built on the Ethereum blockchain which was exploited at that time because it had some vulnerabilities in its smart contracts. In this way, the Ethereum platform was hacked, and cybercriminals stole approximately 3.6 million ETH tokens, which now might be worth $50 million of Ether.
People didn’t really know how to deal with the aftermath of the event. Some wanted to implement a fork to reverse the effect of the hack, while others wished to maintain the immutability principle and accept the hack as part of the blockchain history. In the end, Ethereum was split into:
- Ethereum Classic (ETC), which is the original blockchain and follows the immutability principle of the blockchain, as it didn’t want to be impacted by the DAO hack.
- Ethereum (ETH) is the new blockchain that resulted after the hack, which has become nowadays one of the most important blockchains both for its native token and other industries as well.
The fork has attracted controversial opinions and is considered a crucial moment in crypto and blockchain history. Although, at first, they shared the same concept and code, since then, the two have started to differ a lot, and one of the most visible discrepancy is that Ethereum has opted for a Proof-of-Stake consensus mechanism, while Ethereum Classic is still operating on a Proof-of-work mechanism.
What are the differences between Ethereum and Ethereum Classic?
Over the years, Ethereum and Ethereum Classic have become quite different in many areas, including technology, economic principles, philosophy, and security. Here are the main differences between the two.
Philosophy
Ethereum Classic still follows the original principles of the blockchain, and it is guided by the philosophy that “code is law.” This ethos has become one of the most critical characteristics after the DAO hack, where Ethereum Classic didn’t want to support the split to emphasize the immutability principle of blockchains. On the other side, Ethereum focuses on community consensus, and sees this as an remarkable ability to evolve. So, as the majority of the platform participants supported the split, Ethereum made the necessary changes to be able to satisfy its users.
Hash rate
The hash rate of Ethereum Classic is lower than that of Ethereum, which can increase vulnerability to attacks. Ethereum has a higher hash rate, and this is why it is considered safer. The hash rate depends on the network of miners, and as Ethereum has transitioned to a Proof-of-Stake consensus mechanism, its hash rate will become quite irrelevant because the platform will no longer rely on mining to ensure the security of the network.
Technical discrepancies
When comparing Ethereum and Ethereum Classic, it is vital to take a look at the technical aspect as well. Technical components are essential, as they can impact the smart contract capabilities, transaction speeds, sustainability and system security. For example, the block time differs between the two of them. Ethereum Classic processes a block every 15 seconds, while Ethereum’s block time is around 12 to 14 seconds. Although the two of them have rapid block production, Ethereum is slightly faster, which can make it handle more transactions per second.
Usage and adoption
Ethereum (ETH) has a wider adoption than Ethereum Classic (ETC), as ETH is the second-largest digital coin by market cap after Bitcoin. Although the same principles of the blockchain guide the Ethereum Classic (ETC), it has not benefited from the same level of adoption. If we were to take a look at its market capitalization, we would see a significant discrepancy, as the one of ETC is notably smaller.
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Last remarks
Although the two blockchains have the same roots, they are different in various ways. Comparing the two blockchains, Ethereum is the one that benefits from greater success with all the innovations and improvements that it has brought.