Ethereum Classic ETC Definition, History, and Future

what is ethereum classic

Weiss Research, an investment research firm that rates cryptocurrencies, has given Ethereum Classic an overall rating of “C+”, a technology and adoption rating of “B-“, and a market performance rating of “D+”. Pairs are available against stablecoins, other cryptocurrencies and fiat currencies, while derivatives and institutional investment vehicles also exist. Exchanges that let you buy Ethereum Classic include Binance, OKEx, HTX and Coinbase. Once they do this, they create a new cryptographic stamp for this new block specifically and immediately check if it hit a specific target that the protocol determines. If it didn’t hit the target, then the miners go back, change the random iterating number as soon as possible and try again. If they didn’t hit the target again, then they try again, and again, and again, until one of the miners hits the target.

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For those who aren’t sure what a smart contract is, they’re basically programable agreements between two or more parties. This means that money can move from one party to another without needed a trusted middleman. Both parties trust or verify that the code is legitimate, and the code releases the money upon certain conditions being met. The way the hard fork worked is that the ETH we know today split off from the main blockchain at a particular point. This particular point was around block 1,920,000 – right before the DAO hack.

Total Supply of Ethereum Classic

One of the key attributes of cryptocurrencies is that they run on open-source software. To the extent any recommendations or statements of opinion or fact made in a story may constitute financial advice, they constitute general information and not personal financial advice in any form. As such, any recommendations or statements do not take into account the financial circumstances, investment objectives, tax implications, or any specific requirements of readers. When covering investment and personal finance stories, we aim to inform our readers rather than recommend specific financial product or asset classes. However, for maximum security, you can use the Ledger Nano S hardware wallet or the Trezor.

Emerald Software Developer Kit (SDK)

In addition to having mining software, you will need a Ethereum Classic and access to a mining pool that pools your effort with other miners and a wallet to store the Ethereum Classic that you earn from mining. Most cryptocurrencies have multiple publicly-available mining pools that can be found with a simple Google search. By resolving computationally intensive puzzles to create and validate blocks of transactions, Ethereum Classic miners protect the network. Ethereum Classic (ETC) and Ethereum (ETH) are two separate blockchain networks that share a common history but have since diverged in philosophy and development. Another difference is that Ethereum does not have a limit on the number of tokens that can be issued. Ethereum Classic has a limit of 210.7 million coins that will ever be introduced.

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The idea behind the hard work is that it would refund all the missing funds to those who had lost out thanks to The DAO attack. There was to be a refund smart contract coded that would allow users to withdraw their money. The sheer market cap size and the strong community behind Ethereum (ETH) foreshadow a bright future. But with the addition of Ethereum Classic to Coinbase, it looks as if the ETC vs ETH competition may not be settled just yet. As mentioned in this article, the three pillars of Ethereum Classic are that it uses proof of work as its consensus mechanism, it has a fixed supply, and it supports smart contracts.

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The two cryptocurrencies not only share the same name but also share an interesting story that is one of the most pivotal events in all cryptocurrency history. The battle between Ethereum and Ethereum Classic is one of ethics and ideologies. As proof of work does not enable scalability in the form of high transaction volumes, then ETC may have other systems in higher layers that may process larger transaction volumes, but settle inside ETC. This design is the most popular in the industry to achieve scalability, examples of which are the Lightning Network as a layer 2 of Bitcoin and rollups as a layer 2 of Ethereum. Ethereum Classic (ETC) is a cryptocurrency, a blockchain, and a world computer. Short-term performance may vary due to various external factors, but long-term prospects favour Ethereum unless Ethereum Classic addresses its challenges or Ethereum faces unforeseen setbacks.

There are those who feel it was right to split the Ethereum blockchain to maintain confidence in it, and there are those that feel that a blockchain must never be changed to suit the wants of developers or investors. Ethereum Classic (ETC) runs on the same protocol doing a similar function, but it does have some distinct differences in its community. The 10% or so people from the original Ethereum are relatively in the shadows and are loyal to the concept of the immutable ledger. ETC primarily has value because of the speculator market, much like many of the other alt-coins out there.

what is ethereum classic

This was especially notable when the Ethereum blockchain completed its upgrade to a proof of stake (PoS) consensus mechanism in September 2022. Ethereum Classic remained a proof of work (PoW) system, attracting many miners who were displaced by Ethereum’s transition. Ethereum Classic was produced by a fork of the original Ethereum blockchain in 2016. Like many other blockchain forks, ETC was created following an ideological and technical divide within the community over how to handle the consequences of a major hack. ETC diverges greatly from ETH when it comes to mining and coin supply.

Bitcoin is a cryptocurrency and a blockchain only and its sole function is to maintain accounts and balances. Ethereum and Ethereum Classic may have emerged from a shared past, but the two blockchain platforms have differing visions of what a decentralised future should look like. CoinCentral’s owners, writers, and/or guest post authors may or may not have a vested interest in any of the above projects and businesses. None of the content on CoinCentral is investment advice nor is it a replacement for advice from a certified financial planner. There is not only the obvious competitor of Ethereum but also any other smart contract provider.

Indeed, ETC is the largest and most secure smart contracts blockchain in the world. This makes it optimal as a base layer blockchain system as it may be used for settlements and high value, low volume use cases. Because Ethereum Classic’s development has continued independently, it stands out in some ways from Ethereum. Most notably, unlike Ethereum, it has no plans to move away from its current proof of work consensus mechanism to proof of stake. Also, Ethereum Classic will have a total supply of around 210 million coins, unlike ETH, which has no limit. It also completed the building and deployment of sidechains while Ethereum was still experimenting with the concept.

Because Ethereum is considered the more authentic of the two networks, Ethereum Classic’s future appears to be less bright than Ethereum’s, especially given Ethereum Classic’s security concerns. Starting January 2023, the Coinbase wallet will not support Bitcoin Cash (BCH), Ethereum Classic (ETC), Stellar Lumens (XLM), and Ripple (XRP). After that, you can transfer those coins to another compatible wallet, but you can lose them if you try to otherwise send or receive them using the Coinbase wallet.

Traders might sell ETC in response to overall bearish trends in major cryptocurrencies like ETH and Bitcoin. Due to hacks, most exchanges require a long time to process ETC transactions. For example, Kraken requires 40,000 confirmations that would need nearly 6.5 days to process, whereas Coinbase requires 20,000 confirmations, which in August 2020 meant close to two weeks to complete the transaction. You can buy Ethereum Classic through many popular cryptocurrency exchanges and some retail brokerages.

The investors would have to buy DAO Tokens using Ether as the currency to buy them. The DAO tokens integrated holders into the DAO system and gave them a certain amount of voting power. Before there were two different Ethereums, there was only one Ethereum. Since then, $50 million was stolen by an unknown hacker or hackers, and this resulted in two distinct camps of people in the cryptocurrency world being formed.

  1. Ethereum Classic will continue to use a proof-of-work system, where cryptocurrency miners are rewarded for validating transactions on the blockchain.
  2. Since these contracts are automated and enforced, transactions and applications that run on the Ethereum platform have become very appealing to all sorts of different applications.
  3. For example, Binance is based in Tokyo, Japan, while Bittrex is located in Liechtenstein.
  4. One of the key attributes of cryptocurrencies is that they run on open-source software.

What is the point of an immutable ledger if it can be changed at the whim of the community? Naturally, this is a high-risk investment but there are some influential backers of the project such as Barry Silbert of the Grayscale Investment Trust. As you can tell from each currency’s market capitalization, the cryptocurrency community consider Ethereum to be the true version of the Ethereum chain.

what is ethereum classic

The Ethereum chain that forked was able to get back the $50 million that was hacked. The majority decision for a solution was that Ethereum needed to create a fork, or stop the blockchain entirely and create something new from scratch. Ethereum Classic (ETC) is, as the name would suggest, the first Ethereum still using the original blockchain. Ethereum has moved from strength to strength over the years, becoming the second largest cryptocurrency by market capitalisation after bitcoin. In August 2022, the US Treasury sanctioned Tornado Cash, a virtual currency mixer that helped obfuscate the origin and destination of funds on the Ethereum blockchain. This has shed further light on the concern with Ethereum’s PoS mechanism and the potential for censorship and regulation.

Crypto purists favor a libertarian, censorship-resistant, decentralized model, whereas crypto pragmatists point toward the more adaptable and malleable nature of Ethereum as the way to go. Contrast this ethos with the approach of Big Data giants like Google or Facebook, which develop proprietary code that cannot be publicly shared. Ethereum ETFs saw $133.16 million https://cryptolisting.org/ in net outflows after the end of Wednesday’s second day of trading. Ethereum Foundation is rumored to have moved 92,000 ETH in the past few hours. If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned.

However, it wasn’t long before a community member identified another potential problem. The soft fork would open the network up to another potential risk – a “Denial of Service” attack. Oh, and also – if, after reading this article, you’ll find that you’ve developed an interest what are the costs for free on board in purchasing and holding some ETC, you’ll be able to do so via Kucoin or any other major crypto exchange platform out there. Also, storing ETC should not prove to be an issue – you’ll be able to do so with ease even on some hardware wallets (i.e. the Ledger Nano X).

Atlantis, activated in September 2019, enabled the Agharta upgrade, which included the outstanding Byzantium changes. Agharta was followed by the incorporation of the Constantinople patches through the January 2020 upgrade. Finally, with the Phoenix upgrade, Ethereum Classic achieved protocol parity with Ethereum, allowing for fully cross-compatible applications between the two networks. Several codenamed prototypes of the Ethereum platform were developed by the Ethereum Foundation, as part of their proof-of-concept series, prior to the official launch of the Frontier network. Celebrity meme coins have declined by an average of 94% from their all-time high, according to X user Slorg.

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