Ethereum (ETH) and Ethereum Classic (ETC) are two different blockchain platforms that came from the same Ethereum project. Vitalik Buterin introduced the idea for Ethereum in 2013, changing blockchain technology by making smart contracts a reality. Smart contracts are self-executing contracts where the terms of the agreement are written into code. This lets you make trustless and automated transactions without the need for intermediaries. 

Ethereum and Ethereum Classic both support decentralized applications (dApps), which run on their blockchains. These applications operate autonomously, providing services ranging from financial operations to social networking, all without central control.

What is Ethereum (ETH)?

Ethereum is a decentralized platform that gives developers the tools they need to build and deploy smart contracts and decentralized applications (dApps). The network’s development began in early 2014 and it was officially launched on July 30, 2015.

The DAO (Decentralized Autonomous Organization) was one of the most significant projects built on Ethereum. It was designed to create a venture capital fund that would be managed through smart contracts. However, in June 2016, a flaw in the DAO's code was exploited by an attacker, who stole about $50 million worth of Ethereum.

This hack caused a major crisis in the Ethereum community, leading to a heated debate on how to handle the situation. Ultimately, a hard fork was proposed and implemented to reverse the stolen funds, effectively splitting the blockchain into two. 

Key Features of Ethereum

  • Smart Contracts: Automated, self-executing contracts with predefined rules.
  • dApps: Decentralized applications running on the Ethereum blockchain.
  • Ether (ETH): The native cryptocurrency used to pay for transactions and computational services.
  • Ethereum Virtual Machine (EVM): A Turing-complete virtual machine that executes smart contracts.
  • Proof-of-Stake (PoS): The consensus mechanism Ethereum transitioned to, improving scalability and energy efficiency.
  • ERC-20 and ERC-721 Standards: Protocols for creating tokens and non-fungible tokens (NFTs) on the Ethereum network.

What is Ethereum Classic (ETC)?

Ethereum Classic emerged following the DAO incident. In response to the hack, a hard fork was proposed to get the stolen funds back, effectively creating two blockchains that run in parallel. A hard fork is a radical update to a blockchain protocol that makes previously invalid blocks and transactions valid, or vice versa. This causes a split where one path follows the new, upgraded blockchain, while the other continues along the original path. Ethereum Classic is the original, unaltered blockchain, which is based on the philosophy of "code is law".

What is “code is law”?

The idea behind "code is law" is that the rules set in the blockchain's code should be absolute and unchangeable. This means that once a smart contract is deployed, its terms and conditions will execute exactly as programmed, no matter any external circumstances. 

This is a core idea in Ethereum Classic's approach, noting that the blockchain's operations and transactions shouldn't be changed by human intervention. This helps to keep the network decentralized and resistant to censorship or manipulation.

Key Features of Ethereum Classic

  • Immutable Ledger: The original Ethereum blockchain that did not reverse the DAO hack.
  • Smart Contracts: Similar to Ethereum, it supports automated contracts.
  • Ether Classic (ETC): The native cryptocurrency of the Ethereum Classic network.
  • Proof of Work (PoW): ETC continues to use the original Ethereum PoW consensus mechanism.
  • Community Governance: Decisions are made through community consensus without intervention from a central authority.

Technology Comparison

While Ethereum and Ethereum Classic possess the same foundation, not all of their features and functionalities are exactly the same. Let’s take a look at their architecture and key differences.

Architecture and Technology

  • Ethereum (ETH): Utilizes the Ethereum Virtual Machine (EVM) for executing smart contracts, recently transitioned to Proof-of-Stake (PoS) for consensus, and supports a wide range of dApps and tokens through standards like ERC-20 and ERC-721.
  • Ethereum Classic (ETC): Also uses the EVM but remains on the Proof-of-Work (PoW) consensus mechanism. It retains the original blockchain's immutability and focuses on decentralized governance.

Differences

The main difference between Ethereum (ETH) and Ethereum Classic (ETC) is their consensus mechanisms and approach to blockchain governance. Ethereum switched to a Proof-of-Stake (PoS) consensus mechanism to improve scalability and energy efficiency. This has allowed the network to process transactions faster and cheaper, which means it can support more decentralized applications and users.

Ethereum Classic, on the other hand, still uses the original Proof-of-Work (PoW) consensus mechanism. PoW uses computational power to validate transactions and secure the network, which helps maintain a higher degree of decentralization and resistance to changes. This adherence to PoW is in line with Ethereum Classic's commitment to the "code is law" principle.

Additionally, Ethereum has a larger and more active development community. This has led to continuous updates and a wider range of innovative projects and applications being built on its platform. Ethereum Classic has a dedicated community too, but it's more conservative when it comes to changes and updates. It's focused on maintaining the original vision of the Ethereum blockchain.

Ethereum Tokes: ETH vs ETC

Similarly to their networks, ETH and ETC are not identical, even though some of their utilities and applications match. Let’s take a closer look at their architecture and key differences.

Utility and Applications

  • Ethereum (ETH):  Ether (ETH) is used for transactions, deploying smart contracts, and rewarding validators in the PoS system. It's widely adopted for DeFi (Decentralized Finance) applications, NFTs, and other innovative blockchain projects.
  • Ethereum Classic (ETC): Ether Classic (ETC) is used in a similar way for transaction fees and smart contract execution. While ETC has fewer applications than ETH, it still has a significant presence in Web3, especially among those who value decentralization and immutability.

Differences

The main differences between Ether (ETH) and Ether Classic (ETC) revolve around market adoption, development activity, and their philosophical approach. Ethereum's Ether (ETH) has a larger market capitalization and is more widely adopted. This widespread adoption is driven by a highly active development community that regularly updates and improves the Ethereum network. 

On the other hand, Ether Classic (ETC) has fewer applications and a smaller market presence. The philosophical difference is really important: Ethereum prioritizes adaptability and user protection, allowing it to evolve and address security concerns dynamically. Meanwhile Ethereum Classic remains true to its original principles, maintaining a strict commitment to the blockchain's immutability and decentralized governance.

Conclusion

The split between Ethereum and Ethereum Classic shows how important forks are in blockchain networks. Forks allow communities to address critical issues and take different paths based on their philosophies and values. Both networks have unique benefits: Ethereum's strong ecosystem and innovative developments, and Ethereum Classic's commitment to decentralization and immutability. 

Forks like the one that created Ethereum Classic from Ethereum highlight the dynamic and adaptable nature of blockchain technology. They allow a blockchain to evolve in response to community needs and security challenges while letting any group, whether for or against the said evolution, maintain their vision of the technology.

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Tom F.

Tom is one of the content managers here at Cryptology. While still fresh in his career he has been able to firmly place himself within the world of crypto and content creation, producing work for a number of publications including esports.net and The Times of Malta newspaper.