You must have heard about Ethereum and Ethereum Classic if you have experience trading in the crypto market. Are they replicas of each other? Why do they have similar names?
In this article, we will look at the history of these two coins in greater detail. Let us try to understand the differences and similarities between the two coins.
Ethereum was created in 2015 by Vitalik Buterin. It uses blockchain technology to authorize Smart Contract Agreements. These code-enabled agreements eliminate the need for middlemen as these contracts are automatically authorized when certain agreed-upon conditions are met by the parties.
Ethereum has a market cap of close to $188 billion at the time of writing, making it the second-largest crypto in the world. It is the most popular choice for investors after Bitcoin (BTC).
There are numerous advanced use case studies available, including NFTs, decentralized apps, stablecoins, and many others.
Ethereum Classic (ETC):
We need to go back to 2016 to understand the origins of Ethereum Classic. ETC was formed because of a notable event in crypto history referred to as the hard fork of the Ethereum Blockchain network.
A $50 million hack caused the draining of Ethereum’s blockchain resources in July 2016. This resulted in a change in the blockchain rules to return the lost assets to the investors. This change in blockchain rules is known as a hard fork.
The fundamentals of the network are changed in a hard fork. The Ethereum community had to decide whether to continue on the same network and incur the loss or recover the lost capital by creating a hard fork. As a result, a new blockchain was created, which operates with a different set of rules.
Today, this new blockchain is known as the ETH blockchain, while the older blockchain is the Ethereum Classic(ETC). The ETC token powers Ethereum Classic. These are used to build Decentralized applications and other functionalities.
Ethereum vs. Ethereum Classic:
- Mining methods: Ethereum has transitioned to a Proof of Stake (POS) mining process while Ethereum Classic uses the more traditional method of a Proof of Work (POW) process. POS is much more energy efficient as it involves staking instead of solving complex problems.
- Circulatory Supply: ETC has a finite number of coins, i.e. 230 million coins, while ETH does not have a fixed number.
- Blockchain functionality: Smart contract-enabled applications can be built using both Ethereum and Ethereum Classic networks.
- Immutability: Modifications can be made to an Ethereum blockchain but transactions are immutable in the Ethereum Classic network.
- Market capitalization: The market cap of Ethereum Classic is $5 billion, while Ethereum has a market cap of $188 billion currently.
- Developer usage: Nowadays, the Ethereum blockchain (ETH) powers most of the decentralized apps and NFTs. Some of these apps have a total value lock (TLV) of $7 billion. Some prominent D-Apps run their day-to-day operations on the Ethereum blockchain, such as Curve Finance, Uniswap, Compound & Maker.
Due to the series of hacks and a lack of effective security protocols, ETC has very few use case studies. As a result, developers lost trust in the ETC network.
- Prospects: Ethereum Blockchain has migrated to Proof of Stake from Proof of Work. The POS model will have more operations per unit as the transaction speed of the network is faster than the POW model. Programmers will build more apps due to this faster method. ETC is energy-consuming and slow as it still works with the Proof of Work method.
With superior use cases and promising prospects, Ethereum is the clear winner. The ETH blockchain can power innovative apps due to its stunning functionalities and a more flexible ecosystem. ETH is a household name in the crypto space despite its price moving up and down due to market volatility. It is still growing rapidly every day.
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