Ethereum
Ethereum Classic (ETC) Definition, History and Future
What is Ethereum Classic (ETC)?
Ethereum Classic (ETC) is a Open source, a decentralized, blockchain-based distributed cryptocurrency platform that executes smart contracts. Ethereum Classic was created in 2016 after the decentralized autonomous organization (DAO)which used smart contracts operating on the Ethereum blockchain, was hacked. The original blockchain was split in two, with the majority of users opting to undo the hack and return the stolen funds. Ethereum Classic and Ethereum are rooted in the same code but have different technical and philosophical differences.
Key takeaways
- Ethereum Classic is an open source, decentralized, blockchain-based distributed cryptocurrency platform that executes smart contracts.
- Ethereum Classic is the original Ethereum blockchain.
- It was designed by Vitalik Buterin and the Ethereum Foundation and launched in 2015.
- Ethereum Classic was created after the DAO hack in 2016.
- A dispute caused a split within the Ethereum community, with the majority choosing to roll back the hack while Ethereum Classic did not accept the rollback.
Understanding Ethereum Classic (ETC)
Ethereum Classic is a blockchain platform. It facilitates smart contracts, which automate actions via blockchain. For example, if one party agreed to sell an item at a specific price to another, the smart contract would automate payment and transfer of ownership, eliminating the need to trust that either party would fulfill its obligations.
As noted above, the blockchain was split into ETC and Ethereum after a hacking incident. This split revealed philosophical divisions within the Ethereum community. Operating under the premise that code is law, a small number of developers and miners believed that DAO investors should suffer the consequences of investing in a broken system. cryptocurrency project. However, the majority of the Ethereum community has decided to roll back the blockchain, creating a safety plan for investors.
Many upgrades and improvements have been made to the ETC project since the split. The project’s goal continues to work toward becoming a global payments network using smart contracts that can operate without centralized governance. As with other cryptocurrencies, Ethereum Classic will likely continue to strive to be a digital store of valuemeaning it can be saved and traded while retaining its value.
As of May 27, 2024, ETC’s peak supply was 210.70 million coins, with 147.26 million coins in circulation. Cryptos market capitalization was $4.69 billion.
Similar to Bitcoin, Ethereum Classic records transactions of value. It can also be used as a distributed computer to run self-executing programs. smart contracts.
History of Ethereum Classic
Ethereum was designed by Vitalik Buterin and the Ethereum Foundation and launched in 2015. The Ethereum blockchain was created as a network where transactions were facilitated using its native token. ether (ETH). The new network quickly became popular with initial coin offerings (ICO)as different teams used the platform to launch their own tokens.
One of the most successful ICOs was the DAO, a decentralized venture capital fund in which investors voted on which assets to invest in. This fund quickly accumulated over 11 million ETH from over 18,000 investors before unknown hackers discovered a smart contract bug allowing them to withdraw approximately a third of the DAO’s accumulated ether.
Due to the scale of the hack, many investors have proposed reversing the Ethereum blockchain to rescue affected investors, while others have argued that it would set a precedent for future bailouts. Up to 85% of network miners have moved to hard fork.
As a result, the Ethereum blockchain split into two separate networks. The newer network inherited the name Ethereum and the native token Ether. The old one was renamed Ethereum Classic. It also uses ether, but it has a different symbol, ETC. The network saw a migration of miners after Ethereum integrated proof-of-stake in 2022. Developers created several applications using its virtual machine.
Concerns about Ethereum Classic
Although Ethereum and Ethereum Classic offer smart contracts and seek the same thing walk, Ethereum remains the more popular of the two networks. Ethereum’s ETH is second only to Bitcoin as the world’s most valuable cryptocurrency network.
One of the main concerns with Ethereum Classic is its potential scalability limitations. The network can handle between 10 and 20 transactions per second, but this number is much lower than traditional payment networks. Although Ethereum Classic has undergone numerous software upgrades, the scalability of its payment systems remains one of its biggest challenges.
Regulation of the cryptocurrency market continue to grow, which may or may not change how Ethereum Classic (and other networks) work.
The Future of Ethereum Classic
The future of ETC looks less promising than that of Ethereum since Ethereum remains the more popular of the two networks.
Blockchain and cryptocurrency have failed to gain much traction in the market, losing market share to other cryptocurrencies, notably Bitcoin. ETC continues to trade on exchanges and is operated by the crypto community. Blockchain and cryptocurrency are clinging to a seemingly solid base of traders and fans.
Like Ethereum, ETC has an improvement proposal process. Since its hard fork, it has undergone several upgrades, such as developing compatibility with the latest Ethereum modifications. Despite all this, demand for ETC remains strong and it is possible that blockchain and cryptocurrency will remain competitors in this space.
Ethereum Classic vs. Ethereum
One of the most significant differences from Ethereum is that Ethereum Classic retained its proof-of-work mechanism and competitive reward system that Ethereum used before the merger. This means that Ethereum Classic’s token can be mined, while Ethereum’s cannot.
Another difference is that Ethereum has no limit on the number of tokens which can be delivered. Ethereum Classic has a limit of 210.7 million coins that will be introduced one day. Every five million blocks, the Ethereum Classic blockchain undergoes a fifth. This event is similar to the Bitcoin halving, where block rewards are reduced by 20% every two years. The final fifth occurred in 2022, bringing the reward to 2.56 ETC. The next fifth is expected in June 2024 and the reward will be reduced to 2,048 ETC.
This reduction in rewards every two years is expected to continue. Up to 95% of ETC will be exploited by 2059.
Does Ethereum Classic have a future?
Ethereum Classic has had its ups and downs since splitting from Ethereum. It continues to grow and has a consistent base of traders, investors, and users. Its future depends on its ability to maintain its position as an attractive cryptocurrency and blockchain.
Can Ethereum Classic reach $10,000?
As with any other type of security, it is difficult to predict what will happen to cryptocurrency prices. ETC could reach $10,000, but it is just as likely that it will collapse and become worthless.
Is Ethereum Classic a good buy?
It depends on your outlook, preferences and risk tolerance. It also depends entirely on how the market is doing and when you decide to create an entry point. Your trading strategy also determines the viability of an investment in Ethereum Classic. For example, you can choose to buy and hold cryptocurrency as a long-term investment or keep it in your wallet for a short period of time.
The essential
Ethereum Classic is a blockchain that spun off from Ethereum in 2016. It maintains the blockchain that existed before the community voted to unstate the Ethereum blockchain after thieves stole millions from investors.
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