What Is Ethereum Classic? ETC Background, Tokenomics and Features

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What Is Ethereum Classic? ETC Background, Tokenomics and Features

Key highlights:

  • Ethereum Classic is the continuation of the original Ethereum chain which split in a 2016 hard fork
  • Currently, the features of ETC are similar to the features of ETH but the two projects have significant differences in their roadmaps
  • Despite technically being the original Ethereum chain, ETC is much less popular than ETH

Ethereum Classic explained

While most readers might believe that , which uses the ticker ETC, is a spin-off of the we all know and refer to every day, the truth surprisingly suggests exactly the opposite. In this article, we'll be looking into Ethereum Classic (ETC) and learn about both its history and its differences compared to the more popular Ethereum (ETH).

Buy/Sell Ethereum Classic (ETC)

How to buy Ethereum Classic (ETC) on Binance

The origins of Ethereum Classic

One could say that Ethereum Classic is as old as Ethereum, if not older, considering it maintains the continuity of the initial Ethereum blockchain.  

When Ethereum introduced the concept of smart contracts to the world of blockchains, there were many attempts to leverage this new utility blockchain technology had to offer.

One of the first projects that achieved massive popularity was the DAO, or Decentralized Autonomous Organization. The DAO aimed to provide a way for both commercial and non-commercial projects to raise capital.

The DAO launched on April 30, 2016. However, less than two months later, on June 17, 2016, an attacker exploited various vulnerabilities in the DAO code to steal over $50 million worth of ETH that was locked the DAO. 

The Ethereum community, as well as developers, key investors and stakeholders, had to decide how they were going to deal with the incident, as it was crucial for the future direction of the ambitious cryptocurrency project. 

The community was roughly split into two camps and both ultimately had their vision realized (albeit on separate chains).   

One camp, which included Vitalik Buterin, one of the Ethereum project's original founders, suggested a solution that would return the stolen ETH to victims of the hack through a hard fork of the Ethereum blockchain. 

The other camp maintained that immutability was a crucial aspect of blockchains, even though it might sometimes lead to undesirable outcomes. This camp opposed the idea of a hard fork being used to essentially alter the history of what happened on the Ethereum blockchain.

Perhaps counter-intuitively, the chain that returned the stolen DAO funds to their owners is now known as Ethereum, while the chain that sided against the intervention is now known as Ethereum Classic. 

Basic information about Ethereum Classic:

  • The Ethereum Classic name was started being used in 2016 after the Ethereum community split in two opposing camps
  • Maintains the continuity of the Ethereum blockchain
  • Uses proof-of-work to secure the ledger of transactions and there's currently no plans to transition to proof-of-stake
  • Unlike with ETH, the total supply of ETC is capped

Ethereum Classic features and use cases

The basic premise of Ethereum Classic is the same as Ethereum's - users can create smart contracts and decentralized applications that leverage the security of the blockchain network. This is made possible through the Ethereum Virtual Machine, which is a Turing-complete virtual machine.

Custom tokens can be created and deployed on Ethereum Classic, making it a potential platform for ICO projects and the tokenization of real-world assets. 

Apart from decentralized applications and smart contracts, ETC can also be used just like any other cryptocurrency for sending value in peer-to-peer transactions.  

How is ETC created?

Ethereum Classic uses proof-of-work for reaching consensus about the state of the ledger. Ethereum Classic uses the Ethash proof-of-work algorithm. Unlike with Ethereum, the Ethereum Classic roadmap currently doesn't envision a transition to a proof-of-stake consensus mechanism. The total supply of ETC is capped at 210.7 million coins - this is a contrast to ETH, which does not have a total supply cap.

Where to buy Ethereum Classic and how to store it?

Ethereum Classic is a relatively big cryptocurrency by market cap, and it's readily available on most major cryptocurrency exchanges. If you already have some cryptocurrency, you can buy ETC on Binance or use another crypto-to-crypto exchange. If you want to buy Ethereum Classic with fiat currency, your best bet is probably Coinbase

You can store your ETC coins in a number of wallets - here's some of the best examples:

If you're looking for additional security, you can also use a hardware cryptocurrency wallet such as the Ledger Nano S.

Ethereum Classic VS Ethereum

In general, ETC offers almost every aspect that ETH brings to the table, as they both have the same origins.

ETH's market cap is approximately 10 times larger than that of ETC. Ethereum is the platform of choice for the majority of developers who are working with smart contracts and decentralized applications. Ethereum is also the home of a huge number of tokens that are based on the ERC20 standard.

On the other hand, Ethereum Classic (ETC) also has its loyal supporters who put a strong emphasis on the immutability and decentralization of blockchains. The platform is considered by its supporters as the continuation of the original vision behind the creation of Ethereum.

Verdict

While Ethereum (ETH) is the most popular platform to develop and deploy smart-contracts and dapps, ETC is also constantly updating its code and utilities, attracting old and new investors and startups under its umbrella. 

If you're looking for an alternative to Ethereum (ETH) but you don't want to swim too far from the shore, ETC is likely your best option at the moment.


5 alternatives to Ethereum (ETH)

Buy/Sell Ethereum Classic (ETC)

Ross Peili is Russian-Greek hi-tech investor and entrepreneur. Studied Digital Economy at UNIC, with Andreas Antonopoulos as a lecturer. Member of the European Blockchain Observatory & Forum, and the European AI Alliance. He is consulting with and advising Blockchain, IoT, and Biotech projects since 2016. Parallel he is a casual author for various fintech media outlets.

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