Ethereum vs Ethereum Classic
You must have heard about Ethereum & Ethereum classic if you have experience trading in the Crypto market. Are they replicas of each other? Why do they have similar names?
We will take a closer look into the history of these two coins in this article. Let’s try to understand the differences & 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 close to $188 billion, making it the second largest crypto in the world. It is the most desired choice for investors after Bitcoin (BTC).
There are many advanced use case studies such as NFTs, Decentralised apps, Stablecoins & many more.
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 make a decision, whether to continue on the same network & 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). ETC token powers Ethereum classic, these are used to build Decentralized applications & other functionalities.
Ethereum vs Ethereum Classic:
- Mining methods: Ethereum will soon move to a Proof of Stack (POS) mining process while Ethereum classic uses the more traditional method of 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 & 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 & NFTs. Some of these apps have a total value locked(TLV) at $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 & 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 will soon be more efficient as it will migrate 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 & slow as it still works with the Proof of Work method.
With superior use cases & promising prospects, Ethereum is the clear winner. ETH blockchain can power innovative apps due to its stunning functionalities & a more flexible ecosystem. ETH is a household name in the crypto space despite its price moving up & down due to market volatility. It is still growing rapidly every day.