Top Things You Should Know About Ethereum Classic (ETC)

Top Things You Should Know About Ethereum Classic (ETC)

By MuyAsk | Crypto Truth Lexicon | 1 May 2020


Hello there, I am back with another list of questions and answers to clear up some typical FAQs that you might have. This article is for the Ethereum Classic cryptocurrency project.

If you are interested in finding out about what Ethereum Classic is, why it is used, and how it came into existence then feel free to read on.

In this article, there are not as many questions to be answered so it won’t be as long as my others. If you have not managed to take a look at my other FAQs then take a look at the following on Zcash (ZEC), Cardano (ADA), and Tezos (XTZ)

The questions that I will be covering here are;

1. What is Ethereum Classic?

2. How Ethereum Classic Was Created?

3. How is Ethereum Classic Different than Ethereum?

4. What is Ethereum Classic (ETC) Used For?

5. Can You Mine Ethereum Classic (ETC)?

6. Is Ethereum Classic Anonymous?

7. Where Can You Buy & Sell Ethereum Classic?

1. What is Ethereum Classic? 

c62d028ca16ed0a404c58f45c89c3086c210e16568c6a0a686aeece5d4a9c42c.png

Ethereum Classic is an open-source blockchain and distributed computing cryptocurrency platform that allows for the deployment of decentralized applications (dApps) on top of its blockchain. 

It was created due to philosophical differences that stemmed from a hard fork on the Ethereum blockchain, after a multi-million dollar hack that occurred on The Decentralised Autonomous Organization, a venture capital smart contract that was built on top of Ethereum - often labeled as “The DAO hack”.

It is considered as the original Ethereum blockchain as it maintains the original, unaltered version of the Ethereum network, and was created due to unwavering beliefs in core principles of blockchain technology that include;

  • Cryptocurrencies must be fungible
  • Blockchains must remain immutable without any outside influence

The entire blockchain allows dApps to be deployed through the use of smart contracts, stored on the blockchain, which automatically enforces any rules of agreement that are coded into the smart contract itself. These smart contracts are executed through the Turing-complete Sputnik Virtual Machine by using a distributed set of nodes on the Ethereum Classic network.

These ETC nodes are financially incentivized to run the virtual machine as they receive ETC fees for processing any transactions related to the smart contracts on the networks.

Ethereum Classic was originally maintained by a highly dedicated developer community (ETCDEV) who focuses on the improvement of the blockchain to make it more stable, secure, and efficient. 

However, due to the 2017/18 bear market, ETCDEV closed its operations and handed maintenance over to ETC Labs, an incubator that focuses on funding ETC-related projects. ETC Labs is primarily focused on growing the ETC ecosystem of dApps to grow the entire ecosystem of the network.

2. How Ethereum Classic Was Created? 

Ethereum Classic was created from the result of a hard fork on the Ethereum blockchain. Ethereum was created by Vitalik Buterin and Gavin Wood and therefore they are credited as the original authors of Ethereum Classic as it is a fork of the original Ethereum code.

To understand why Ethereum forked, you must gain an understanding of the DAO hack.

The DAO

The Decentralized Autonomous Organization (DAO) was a dApp that was built on top of the Ethereum network through a smart contract. It acted as a decentralized venture capital fund that would be able to fund all future dApps that would be built on the Ethereum blockchain.

The system that was set up was meant to allow funders of the DAO to have a say in which dApps would get funding by purchasing the DAO Tokens to gain voting power by using Ethereum. This caused somewhat of a frenzy within the Ethereum ecosystem which caused the DAO to raise over $150 million in Ether within the first month of its operation. At the time, this was around 14% of all the ETH tokens ever issued.

Users that wanted to exit the DAO and get their ETH back had the option to access an exit door called the Split Function. This would allow the user to get their ETH investment back, however, there was a rule that the user would have to hold their ETH for 28 days before they could spend them.

It was the Split Function system that exposed a giant loophole in the entire DAO.

The Hack and Aftermath

On June 17th, 2016, a hacker managed to steal almost a third of the DAOs funds. He made a recursive function in the request for the Split Function which allowed him to repeat the request multiple times for the same DAO tokens before the transaction was registered. This is what allowed him to extract a third of the funds inside the DAO which equated to roughly $50 million.

However, due to the 28-day holding stipulation, the funds were still held in the Child DAO and the hacker was still unable to spend his stolen funds. The Ethereum community and leaders had quickly act and they had three options to consider;

  • Do Nothing
  • Conduct A Soft Fork
  • Conduct A Hard Fork

It went down to a vote and the majority of those participated voted for a hard fork. This essentially stops the blockchain entirely to create a new, separate blockchain.

Ethereum eventually forked on July 20th, 2016, to become what we know it as today. However, there was a small subset of the community (around 10%) that wanted to stay loyal to the original blockchain with the philosophy that blockchains are supposed to be immutable, censorship-resistant, and permissionless.

This subset is what gave birth to Ethereum Classic as they continued to support the original blockchain that suffered from the DAO hack by mining the blockchain and trading it as ETC.

3. How is Ethereum Classic Different than Ethereum? 

The Ethereum (ETH) and Ethereum Classic (ETC) blockchains were completely identical up until block number 1,920,000 - where the hard fork occurred. After the chain split, Ethereum Classic continued to operate on the original Ethereum blockchain whilst Ethereum itself forked off into an entirely new version of the chain.

Ethereum Classic runs on the original Ethereum protocol and retains many of the characteristics such as the Proof-of-Work mining algorithm. However, it is important to note that, since the hard fork, Ethereum is not backward compatible with Ethereum Classic.

This basically means that Ethereum Classic will never be able to integrate any upgrades that happen on the Ethereum blockchain, such as the shift from PoW to Proof-of-Stake (PoS).

Another difference is that Ethereun Classic went on to disable the ‘difficulty bomb’ that was created on the Ethereum blockchains code. The difficulty bomb was a procedure put in place which would cause the difficulty of mining on the Ethereum blockchain to skyrocket, effectively making mining impossible. It was created in order to force the Ethereum Foundation to eventually move away from the PoW mining algorithm and shift to PoS, as they are currently enacting in 2020.

eca7da2e2b1ddf7b9feeeabc5fdd7b4c32a40b66573fd09a1e2afbf864b24898.png

The idea for this was to push Ethereum Classic in its own direction and to gain a proportion of the hash rate that Ethereum will lose when they shift to PoS. An increase in hash rate will effectively create a blockchain that is more secure.

4. What is Ethereum Classic (ETC) Used For? 

Ethereum Classic is used as a means to transfer value from one wallet to another, just like any other cryptocurrency. However, the cryptocurrency is also used as fuel for transferring tokens on the network as all fees are paid in ETC. It is also used to pay for computational services on the Ethereum Classic network.

Furthermore, developers will need ETC to install any form of new smart contract in the development of their dApp.

5. Can You Mine Ethereum Classic (ETC)?

Yes, Ethereum Classic can be mined using the Proof-of-Work (PoW) algorithm on both ASICs and graphics cards (GPUs) operations. Mining on Ethereum Classic is conducted via the Ethash algorithm which is very energy-intensive causing GPU setups to be slightly more effective than ASICs. That means if you have a powerful gaming machine, with at least 4GB of dedicated video RAM, you should be able to start mining.

As the difficulty to mine is rising, it is best to mine ETC on a mining pool. In a mining pool, computing power is combined which generally results in being able to find blocks more consistently. The ETC block rewards are then distributed to every member of the pool according to how much computational resources they provide.

Mining will continue until ETC reaches its maximum supply which is set at 210,700,000 ETC. As of late April 2020, there have been a total of 119 million ETC mined.

6. Is Ethereum Classic Anonymous? 

No, Ethereum Classic is not anonymous at this moment in time. It can be considered as pseudo-anonymous as the accounts are not linked to individual persons, but individual addresses. However, as soon as the purchase of Ethereum Classic is linked to your identity through a bank account, perhaps via an exchange, all anonymity is out of the window. 

This is because Etheruem Classic is a fork of Ethereum, which had no anonymous implementation. All the transactions on the Ethereum blockchain can easily be seen with the sender and receiver addresses both visible, as well as the transaction amount. This is the same for Ethereum Classic and all transactions can easily be verified and investigated here.

7. Where Can You Buy & Sell Ethereum Classic?

Ethereum Classic is available on a wide variety of different exchanges across the globe. Following is a list of cryptocurrency exchanges with ETC available to buy or sell;

  • Binance - BTC, BNB, USDT, BUSD
  • Coinbase Pro - USD, EUR, GBP, BTC
  • CoinBene - USDT, BTC
  • Kraken - EUR, USD, BTC, ETH
  • Poloniex - BTC, ETH, USDC, USDT
  • OKEx -BTC, ETH, USDT, OKB, USDK,

 Hope you enjoyed that read :) Let me know if I have missed something in the comments.


MuyAsk
MuyAsk

All truths are easy to understand once they are discovered; the point is to discover them


Crypto Truth Lexicon
Crypto Truth Lexicon

It is what it is.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.