There has been tremendous interest in Ethereum Classic lately, mostly from people relatively new to crypto
Ethereum’s hard-fork has jumped more than 300% in the past week alone. Some people think Ethereum classic (ETC) is just a cheaper version of Ethereum (ETH). This is far from the truth.
In 2016, a major smart contract on Ethereum with 14% of all extant ETH locked up in it (The DAO) suffered a hack that resulted in much of the ETH being stolen. The Ethereum community was split on what to do, and eventually, there was a controversial hard fork. The HARD FORKED chain (with all the hacked ETH put into a different, safe smart contract for withdrawal by its original owners) became today’s Ethereum chain. Ethereum has not conducted any further chain-state-changing hard forks after that point.
The UNCHANGED chain (with the attacker keeping the stolen funds) became Ethereum Classic.
Network and DeFi
The large majority of the Ethereum community decided that Ethereum was the legitimate chain. As a result, it has subsequently seen the vast majority of development and usage compared to Ethereum Classic, and all of the DeFi and other dApps we have come to know and love are built on Ethereum, NOT Ethereum Classic. Thousands of interconnected dApps exist on Ethereum.
By comparison, almost no development has taken place on Ethereum Classic. Developers want to go where all the other developers are, and that is not Ethereum Classic.
- Ethereum is one of the most secure chains out there, it is highly decentralized and will be even more so with the upcoming Proof-of-Stake changes, along with Bitcoin.
- Ethereum Classic has a tiny fraction of the hash rate that Ethereum does (under 2% until the past few days), leaving it vulnerable to 51% attacks, four of which have happened so far. This is where an attacker buys or rents a bunch of hash power, takes over the chain, and executes invalid transactions for their own financial gain. It means the blockchain is fundamentally worthless.. These attacks were subsequently rolled back (ironically, given ETC’s founding principle of not changing what happens on-chain), but not before weeks of headaches and lost transactions.
Ethereum (ETH) has received regular hardforks over its history. These hardforks have added features to Solidity (the programming language on both chains), fixed problems with the cryptoeconomic model, and improved user experience (UX), among many other changes. Soon, Ethereum will be transitioning to Proof of Stake, the most major upgrade since the chain was started.
Meanwhile, Ethereum Classic (ETC) has copied over some of the same hardforks as Ethereum, but also ones that have led to it diverging from Ethereum. Importantly, it will not be transitioning to Proof of Stake or reaping any of the benefits from the other set of upgrades that were formerly collectively termed “Eth2”.
All of these reasons are why Ethereum currently has a much higher market cap than Ethereum Classic, and as a result, a higher price per coin.
They are NOT “the same chain”. Ethereum Classic is NOT “the same but cheaper”. Ethereum has fantastic fundamentals, and Ethereum Classic has none. “Price goes up” is not a fundamental analysis. If you’re a new investor, it would be best to stay out of these trash coins or protect any profits you’ve made so far.