What you should know about Ethereum Classic (ETC)
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Can you guess which one of the following is the original blockchain? Is it Ethereum (ETH) or Ethereum Classic (ETC)?
Judging from the name, “classic” must be the correct answer, and it is true! ETC is the original version of the Ethereum blockchain, and the original code is retained after community discussions.
A brief history of Ethereum Classic (ETC), the Ethereum Classic began with an unfortunate event.
In May 2016, the Decentralized Autonomous Organization (DAO) held a token sale with the goal of establishing a blockchain-based venture capital to fund future decentralized applications (DApps) in the Ethereum ecosystem.
Basically, DAO is a complex smart contract that operates in a decentralized manner-computer code that automatically performs tasks between multiple parties when conditions are met.
Despite its ambitious goals and successful token sales, DAO’s code has a major vulnerability that allows attackers to steal ETH from decentralized organizations.
Attackers used this vulnerability in June 2016 to trigger the infamous DAO hacking incident, maliciously stealing approximately US$50 million worth of ETH.
Undoubtedly, the DAO hacking incident shocked the Ethereum community and caused the price of ETH to drop from $20 to $13.
After the DAO hacking incident, the Ethereum community had to choose from three options.
- Do nothing and try to endure the consequences of the attack.
- Initiate a soft fork and recover funds.
- Deploy a hard fork to recover the lost ETH.
Both soft forks and hard forks are major network upgrades. However, soft forks allow users who have not upgraded and upgraded users to communicate with each other, while hard forks are not backward compatible with previous versions.
As developers realized that deploying a soft fork would expose the network to a distributed denial of service (DDoS) attack, the Ethereum community decided to initiate a hard fork to recover the funds lost in the DAO hack.
Although this plan is supported by the majority of people, a small part of the Ethereum community opposes it. They believe that “code is the law” and the blockchain network should be immutable.
The failure of the two parties to reach an agreement on a solution eventually led to the split of the Ethereum blockchain.
Those who tried to retrieve the lost ETH chose the hard fork, which opened the Ethereum (ETH) blockchain as we know it today, while another group of people stayed on the original Ethereum Classic (ETC) chain.
What problems does Ethereum Classic solve?
Ethereum Classic (ETC) is a blockchain platform that allows developers to deploy smart contracts and DApps.
Although this function is the same as that of Ethereum (ETH), the ETC blockchain has two main differences.
First of all, the Ethereum Classic community opposes tampering with distributed ledgers and supports the view that “blockchain networks cannot and should not be modified”.
Secondly, although there is no hard cap on the total supply of ETH, Ethereum Classic adopts a monetary policy of constant supply, allowing up to 230 million ETCs to be created.
As a bonus item, Ethereum Classic launched the Atlantis hard fork last year to increase the interaction with Ethereum and improve the privacy protection of transactions through zk-SNARKS.
Ethereum Classic (ETC) price performance, now let’s briefly understand the price of ETC.
After experiencing some ups and downs after the DAO hard fork, Ethereum Classic started to make big moves in March 2017.
Between March 2 and June 18, the ETC price has increased from 1.37 US dollars to 22.42 US dollars, a surge of more than 1500%.
With the development of the cryptocurrency bull market, after a short correction period, the value of Ethereum Classic continued to soar in late October, with the price rising from $10.57 to $45.25 on December 21.
However, due to the sudden long-term bear market, the price of ETC began to fall throughout 2018, and the transaction price was $5.23 by the end of the year.
Although ETC experienced a small loss (-17%) in 2019, it performed well in early 2020, with its value rising from $4.55 on January 1 to $11.82 on February 15.
The COVID-19 pandemic has had an impact on the broader market and also has a negative impact on ETC prices (and most cryptocurrencies).
After reaching the 2018 lowest point of $3.77 on March 13, the ETC price has since been in a moderate upward trend, trading at $7.03 at the time of writing.