The Beginner’s Guide
What is Ethereum Classic in this guide? We will answer the questions of who created it and how it works.
Ethereum Classic (ETC) quickly emerged as an unprecedented entry in cryptocurrency history, challenging ideas about how blockchains can be initiated, modified, and upgraded.
This is because before the 2016 launch of Ethereum Classic. Developers often released new cryptocurrencies by copying and modifying an existing cryptocurrency software (usually Bitcoin) or by writing new software from scratch. Ethereum Classic hasn’t done either.
Instead, Ethereum Classic was created when a group of Ethereum (ETH) blockchain users chose not to upgrade to the new code proposed by the project developers.
The problem was that the code would edit Ethereum’s transaction history and return ether to people who lost money when a popular app (The DAO) was compromised.
Most Ethereum users will be upgrading their software (a development that helps this new blockchain maintain the Ethereum name).
However, few users continued to protect their old Ethereum software on record of theft. By continuing to run this code, users effectively created a new cryptocurrency.
This version of Ethereum software now lives as Ethereum Classic.
Who Created Ethereum Classic?
It is difficult to say exactly who created the Ethereum Classic (ETC).
The developer most associated with the decision to continue protecting the original Ethereum is the anonymous Arvicco. Who credits a larger group of users with the idea.
However, since most of the Ethereum Classic code is the product of the original Ethereum development team. It can be said that the Russian-Canadian Vitalik Buterin, the founder of the project. And his colleagues were responsible for most of Ethereum Classic’s technical innovations.
With Ethereum, Buterin’s aim was to expand possible use cases for cryptocurrencies to applications beyond money.
Ethereum allows developers to create new cryptocurrencies and decentralized applications that run above the blockchain. Ethereum Classic wants to pursue this vision. However, its developers have chosen to follow it up by making different technical decisions since then.
Why Did Ethereum Classic Fork?
The simplest answer is that the Ethereum Classic fork originated due to an ideological dispute between Ethereum users.
One of the main features of blockchains is the “immutability” or the inability of any user to change transactions added to the history of the blockchain.
Ethereum Classic users found that the code proposed by Ethereum’s developers following The DAO violated a fundamental warranty of the software. Project developers tended to view the code as a one-time fix for a beta software.
How Ethereum Classic Forked?
Faced with a difficult choice, Ethereum’s developers tried to ask users how the project should proceed in light of the DAO attack.
This meant that Ethereum’s developers would eventually encode alternative software with a patch designed to reverse the loss of funds. Ethereum’s developers believed that by publishing the code, they actively asked the public to make a decision, as users could refuse the patch.
Since the code directly affects Ethereum’s transaction history, anyone who decided to continue running the legacy software would be left to trade on a separate blockchain.
For several days such a split seemed to be avoided. Then, a new group of developers began preserving the old ethereum code. A development that encouraged miners to allocate computing power to secure the blockchain and collect the new cryptocurrency created.
In June 2016, the DAO publicly disclosed a vulnerability that could threaten the nearly $ 150 million of ether it has collected so far. Despite assurances that the funds were safe, they were eventually withdrawn from their accounts.
The person or group that seized the funds is unknown, and the reasons are still debated among Ethereum and Ethereum Classic users.
This is because the attacker exploited a bug in the code that allows them to constantly recall DAO tokens and retrieve an infinite number of more than they initially invested. However, due to the peculiarities of the code, the developers had essentially enabled any user to perform such an action.
This eventually led to the removal of roughly one-third of the funds the DAO collected. And a heated community debate on how (or if) Ethereum developers should respond.
What Is The Difference Between Ethereum And Ethereum Classic?
Ethereum and Ethereum Classic were originally based on the same code, but Ethereum Classic has differentiated its technology since then.
Perhaps the biggest difference is that the Ethereum Classic community promises to continue using proof-of-work mining (Bitcoin’s pioneering system) to secure the blockchain.
As of 2020, Ethereum also uses proof of work. But its developers are looking for a roadmap that will eventually find the software to switch to a different model.
It should also be noted that Ethereum Classic has a fixed monetary policy. The total amount of ETC that can be created is limited to 230 million ETC, which means scarcity factors in its worth.
Why Use Ethereum Classic?
With its fixed monetary policy, Ethereum Classic supporters believe that cryptocurrencies can be a store of value (like bitcoin) of classic ether. This may be of interest to investors who can rely on ETC tokens to become rarer over time.
The network itself can be used to develop and run decentralized applications, such as Ethereum. Currently, there are only a small number of available dapps, but this number may increase.
Given that Ethereum Classic is so compatible with Ethereum. There are also important voices in the community that anticipate some kind of symbiotic collaboration between the two blockchains.
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