Ethereum classic is an altcoin created as a result of the hard fork that Ethereum did to retrieve the hacked DAO funds (I will explain this later in the article). In protest to Ethereum reversing a transaction in an “irreversible, decentralized currency”, they decided to capitalize on the existing and original, yet abandoned blcokchain. This blockchain was later termed Ethereum Classic. On their website, they claim their goal is to make it possible for the Ethereum blockchain by stating the below.
“Ethereum Foundation responded to DAO debacle in the worst way possible. Special interests controlling the Foundation are ramming through DAO bailout hardfork against principled opposition of a significant economic minority of Ethereum stakeholders. According to (diligently hidden, pro-fork) coin vote on Carbonvote, 13% of ETH holders oppose this hardfork. Also, about 22% of Ethereum miners voted against the previous ‘DAO softfork’ and would logically oppose hardfork as well. Such a significant minority of stakeholders should not be silenced or intimidated into submission – they should be given a clear choice.”
This quote is from their website, and clearly illustrates their goals as an altcoin. In this article, we will be taking a closer look at Ethereum Classic.
What is the DAO? What happened with the hard fork?
The DAO (Decentralized Autonomous Organization) was an organization that had no legal paperwork. You could simply purchase “DAO Tokens” with ETH. Upon release, the DAO raised 150 million dollars worth of ETH. Unfortunately, the DAO was hacked in June with an unknown hacker stealing 3.6 million ETH into a child DAO. The funds could not be withdrawn out of this child DAO for 1 month so the community had time to decide on what to do. In the end, they decided to do a hard fork (reverse the transaction) and immediately end the DAO. This allowed the token holders to withdraw their stolen ETH. This angered many who thought it was unfair to reverse a hack and some of those angry people ended up creating ETC!
The difference between Ethereum and Ethereum Classic
Ethereum Classic runs on the original pre-fork blockchain where it is impossible to reverse any transactions. The Ethereum Classic team calls this a “censorship resistant block-chain”. The problem that Ethereum now has is that it has potentially lost the community’s trust. They can’t simply say they won’t do it again because there is a precedent that they will do it if there is enough pressure applied. Other than that, Ethereum Classic is the the same as regular Ethereum. Those who believe the hard fork was a horrible thing for Ethereum are jumping ship to Ethereum Classic, causing ETH price to free fall while ETC price is fast increasing. On the other hand, the Ethereum foundation as well as all other major developers have confirmed their support of the Ethereum and affirmed that they will not be building on ETC.
How will Ethereum Classic keep up with upgrades that Ethereum will make?
Since Ethereum’s code is open source (meaning anyone can look at it), any time Ethereum makes a upgrade, Ethereum Classic can simply copy it. There is absolutely nothing Ethereum can upgrade that Ethereum Classic cannot copy. This is a major advantage to Ethereum Classic’s future.
Ethereum Classic was created by a team of people who were dissatisfied after Ethereum’s hard fork. It is a exact copy of Ethereum on every way except that it does not support any blockchain reversals. It also does not have the direct support of the major Ethereum developers, however, it can always mirror Ethereum’s advancements.