About Ethereum (ETH)
Ethereum (ETH) is an open-sourced public blockchain network launched in July 2015, about two years following the publication of its whitepaper. Among its lead developers was the author of the project whitepaper, Vitalik Buterin. In the whitepaper, Buterin made the case that Bitcoin’s (BTC) functionality could be expanded to allow for the development of smart contracts. A few individuals joined him in developing what would later be called Ethereum. Some of these individuals include Charles Hoskinson, Joseph Lubin, Gavin Wood, Mihai Alisie, and Amir Chetrit. These are only the individuals that joined Buterin in the early stages, but over time, the project attracted several other developers. Ethereum was launched as a platform for creating and deploying smart contracts, which are defined as autonomously executing instructions deployed on a blockchain. Essentially, these contracts are preloaded to a decentralized network, and once a set of conditions designed to trigger them are realized, they execute autonomously. To aid in the development of the Ethereum-based smart contracts, the project’s core developers created a new programming language called Solidity, which is based on the popular C++, Python, and JavaScript languages. It is worth noting that Buterin did not conceive the concept of smart contracts, but rather the idea was first proposed in the 1990s by Nick Szabo, a renowned computer scientist, legal scholar, and cryptographer. It took close to two decades to finally come to fruition. With Ethereum, anyone can create and deploy self-executing programs such as NFTs, Decentralized finance (DeFi), and the metaverse, among other use cases.
About Ethereum Classic (ETC)
Ethereum Classic (ETC) was created in June 2016 following a contentious hard fork that saw the Ethereum community split into two factions. A hard fork is a software upgrade in which the new version is incompatible with the old version. Ethereum’s 2016 hard fork implementation followed a high-profile hacking incident that affected the very first of its kind decentralized autonomous organization (DAO). The hacker stole about 3.6 million Ether coins, then valued at about $50 million. The community voted soon after the hack to determine whether or not to revert the hacker’s transactions using a hard fork. Most of the community members led by the network’s core developers, including Buterin, supported resetting the network, while a minority were against it. The new version of the network retained the name Ethereum while the unaltered version was renamed Ethereum Classic. The two networks thus share a common history, vision, applications, and even the founding team. Ethereum Classic’s native cryptocurrency was also renamed ETC, while its sibling remained with the Ether (ETH) title. The hacker’s stolen ETH coins were thus converted to ETC, and the DAO was shut down thereafter, with affected victims getting full compensation. Crypto beginners’ corner:
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Similarities Between Ethereum and Ethereum Classic
As noted, the two projects are more similar than they are different, given their common ancestry, shared blockchain history, and use cases. Some notable differences have cropped up since their split more than six years ago, but they still maintain some semblance. Here’s how Ethereum and its sibling Ethereum Classic are similar:
Consensus mechanism – both networks adopt the popular proof of work (PoW) consensus mechanism that was first adopted within the flagship Bitcoin blockchain. Although, Ethereum core developers are working on upgrading the network to Ethereum 2.0, which will be using staking (Proof of Staking – PoS) as opposed to mining (PoW);Functionality – Ethereum was the first blockchain network to introduce smart contract functionality by providing a decentralized platform on top of which developers could create self-executing applications. Despite their 2016 split, both ETH and ETC still have the same use cases and appeal to the same user bases. Even the development of decentralized apps (dApps) is similar on both networks, as applications developed on either network can be run on the other. Additionally, the two networks’ currencies (ETH and ETC) are used for gas fees to enable the deployment of dApps on respective virtual machines.
Differences Between Ethereum and Ethereum Classic
Over the years, both Ethereum and Ethereum Classic have charted their own paths implementing network updates that have led to their differentiations. Below is a list of some of the more distinct ways in which you can tell apart ETH from ETC:
Ideology – the main reason why the Ethereum community underwent a contentious hard fork in 2016 was due to differences in opinion whereby one camp – Ethereum Classic – believed in the “Code is Law” philosophy while the other didn’t. The ETC community has always held the view that the blockchain’s main attraction is its immutability, and no influential figure should attempt to manipulate it to achieve their ends, however noble they might be.Tokenomics – short for token economics, tokenomics refers to the monetary policy implemented by project developers that guide the token issuance rate, manner, and allocation. Initially, before the split, Ethereum maintained an unlimited supply policy which it still does to this day. However, ETC core developers changed this policy after the 2016 hard fork and capped the network’s max supply to 210,700,000 ETC. So far, about 65% of these coins have been brought into circulation through mining.Governance – Ethereum relies heavily on the Ethereum Foundation to chaperone the making of governance decisions, support the ecosystem through the fellowship program, and help in defining a clear vision for the network. On the other hand, Ethereum Classic has no foundation. Instead, ETC relies on independent development groups and individuals to achieve governance objectives, thus enhancing its ‘Code is Law’ philosophy.Future plans – so far, according to released roadmaps by core developers in both camps, the projects are poised to pull even further apart if their planned development projects are realized. Ethereum is soon migrating from a mining network to staking to address its scalability challenge with The Merge. Ethereum Classic, on the other hand, is looking to adopt side chain technology to enhance its mining algorithm as opposed to completely shifting to a PoS mechanism.Market share – from the start, Ethereum had a much larger community than Ethereum Classic, which has contributed to its more vibrant ecosystem, including developers and network users. As a result, ETH now has a higher price tag and market capitalization that is over 40X larger than ETC at the current market prices.
How to invest in Ethereum or Ethereum Classic
Investing in Ethereum or its sibling Ethereum Classic is simple given that both these cryptocurrencies are popular, making them easily available. Some of the ways to acquire ETH or ETC include:
P2P (peer to peer) exchange – an investor could acquire ETH or ETC directly from friends, family members, or colleagues through purchases, gifts, and prizes during competitions. Additionally, P2P can be conducted online on specialized platforms that enable direct trades between individuals in a peer-to-peer manner;Cryptocurrency exchanges – the most common way for most investors to acquire ETH or ETC is through digital currency platforms. Leading exchanges include:Binance;Coinbase;Kraken;Uphold;FTX;KuCoin;Mining – currently, both of these cryptocurrencies can be acquired through mining which is the process of verifying transactions on PoW networks such as ETH, ETC, BTC, and several other blockchains. To start mining, an investor needs to purchase the necessary equipment including software, hardware, and (sometimes) human resources. As mentioned earlier, however, it is worth noting that mining Ethereum is short-lived as the network is working toward migrating to the staking mechanism.
Note: For more detailed information on how to buy Ethereum, check out our exhaustive guide here.
Final thoughts
Despite their common ancestry, Ethereum and Ethereum Classic have grown to become quite distinct blockchains, and as the two networks progress, their differences seem to be amplified. If you noticed, there are fewer similarities than differences, which shows that despite serving a common marketplace, the two are proving to be very different.
