Although Bitcoin was the first-ever cryptocurrency to be created, several cryptocurrencies have since arrived that offer additional features, benefits, and use cases, and more. Ripple and Litecoin, for example, are even faster and have lower fees. At the same time, the Ethereum network is a smart contract focused blockchain platform that can be used to launch various decentralized applications, also called Dapps.
But did you know that Ethereum began its life, first as Ethereum Classic? Eventually, the two blockchains split due to a disagreement in the crypto community over how to handle a hack, and two Ethereum forks resulted in Ethereum (ETH) and Ethereum Classic (ETC).
The two very similar yet distinctly different types of Ethereum were born from the same code, but today are nothing alike in terms of community support and developer ecosystem. One of the two is at the center of the recent DeFi trend, while the other is regularly 51% attacked. All of these reasons and more make one a much better investment versus the other.
Read this guide comparing the two cryptocurrencies to find out if Ethereum or Ethereum Classic are worth investing in and which out of the two is the best investment for you.
The Ethereum Virtual Machine (EVM) is essentially a massive decentralized super computer that developers can use to code smart contracts designed to run Dapps or decentralised applications. These Dapps can be coded to behave in any way, and it has led to the emergence of a massive industry called decentralized finance or DeFi. Eventually, these smart contracts will replace all real estate transactions, along with Wall Street’s aging back end.
Other tokens can be launched using the Ethereum blockchain platform. During the 2017 crypto hype bubble, Ethereum was the platform of choice to launch initial coin offerings – also called ICOs – or new, crowdfunded ERC-20 tokens that investors bought in hopes of finding the next Bitcoin or Ethereum ahead of everyone else. It helped Ethereum blow up and grow to its all-time high price of $1,400 at the peak of the bull market.
But before that ever happened, an Ethereum fork was required due to an issue with a decentralized autonomous organization called The DAO and a related hack that almost cost users millions in ETH. The fork resulted in a split of the Ethereum blockchain and two resulting paths and tokens: ETC and ETH.
The original Ethereum blockchain took on the “Classic” name, while the newly forked Ethereum by consensus replaced the existing Ethereum. However, some members of the community refused to abandon the Ethereum Classic blockchain, and it is still active today, although it has nowhere near the same level of support or interest.
A decentralized autonomous organization is any consensus-driven network, in which Bitcoin was the first. This is very different, however, from “The DAO,” which was programmed by the team behind German startup Slock.it.
The DAO’s crowdfunding efforts were extremely popular, raising over $150 million and making it the most successful crowdfunding project in history at the time. Later on, one of The DAO’s creators, Stephan Tual, revealed what he called a “recursive call bug” but claimed funds weren’t at risk.
But they were. A hacker managed to withdraw 3.6 million Ether into what is called a child DAO, which is essentially a carbon copy of The DAO. The community clamored to reverse the transactions, but no rollback was proposed. Instead, Ethereum founder Vitalik Buterin announced a proposal for a software fork acting as a one-time fix for the issue.
A similar flaw was found in the Maker DAO code, however, it is being fixed by developers who have learned from the mistakes of the original DAO hack.
When Ethereum founder Vitalik Buterin proposed the fork, it created two separate Ethereum blockchains. The original blockchain took on the Ethereum Classic name, while the new Ethereum continued on. Unlike the Bitcoin and Bitcoin Cash fork done for ideological reasons, the Ethereum fork was necessary to avoid disaster to the ecosystem that could have led to a total collapse of Ethereun price.
Ethereum trades under the ticker symbol ETH while Ethereum Classic trades using the ETC crypto ticker. Both native crypto tokens are called “Ether,” which is the fuel that powers the Ethereum Virtual Machine and super computer network. The Ethereum split date was in July 2016, right around Bitcoin’s halving, and is part of what helped propel cryptocurrencies into the mainstream limelight in 2017.
Ethereum and Ethereum Classic are the same code, just split into two separate paths. But how these two paths have developed over the years has shaped the speculative value of each asset significantly. Because they are so similar, there are few differences, but the differences included are extreme.
Vitalik Buterin first conceptualized Ethereum after the young engineer became infatuated with Bitcoin and blockchain. Realizing there were limitations to the original cryptocurrency asset, he sought out to utilize the new technology to create a cryptocurrency platform of his own, designed to support smart contracts or digital agreements made to function and behave a certain way.
Smart contracts can be coded to be simple agreements, for things like real estate sales, or more complicated code that runs decentralized exchanges, DeFi applications, and much more. For example, the Uniswap smart contract built on Ethereum acts as an exchange of its own.
Ethereum Classic can do anything Ethereum can do, but it has been essentially ditched in terms of the development community. A great visual example of this is the DeFi Pulse chart, which shows a total value in ETH locked up, not ETC.
No DEX, Dapps, or anything else is built on Ethereum Classic, and the cryptocurrency has suffered several 51% attacks due to the lack of support.
Both platforms average roughly 12-15 transactions per second speed, and the time it takes for Ether to be received varies greatly depending on how much ETH gas fees are paid. The higher the cost, the faster the transaction.
In addition to Ethereum transactions requiring ETH to send, even ERC-20 tokens built on Ethereum require ETH to send, making the asset constantly in demand the more tokens are built on the platform.
Ethereum will soon support more transactions per second, thanks to the upcoming ETH 2.0 update, scheduled for December 2020. The contract address recently went live, and validators began depositing ETH in preparation for staking. 32 ETH are required to enable staking with the ETH 2.0 update.
The Ethereum total supply is a hot button issue. Several top Ethereum developers claimed they didn’t know the total supply recently and were challenged by the Bitcoin community. Ethereum core developer Martin Holst Swende says the current total supply is around 112 million ETH.
The Ethereum Classic supply is around 118,000, according to CoinMarketCap. The distribution of both tokens is well decentralized, prompting the United States Securities and Exchange Commission to say that Ethereum is not a security, just like Bitcoin.
If the crypto asset is decentralized enough, the SEC considers the cryptocurrency a commodity instead. Ethereum is one of these cryptocurrencies, helping further along its adoption with institutions as well.
Both cryptocurrencies were designed to do the same thing and approach the same use cases and target audience. This is why often Ethereum Classic is viewed as an “attack” on Ethereum, as it competes for the same market share and userbase.
But it is truly no competition. No DeFi apps are built on ETC, and it is far down the list of cryptocurrencies by market cap. Ethereum is the number one altcoin, behind only Bitcoin when it comes to all cryptocurrencies. Trends often change, but not in the case with Ethereum Classic and Ethereum – Ethereum is bound to remain king, while Ethereum Classic will continue to fade into obscurity.
If you have been reading along this entire time, then you probably have a strong sense already as to which of the two is the better version of Ethereum to invest in. It is difficult to say that ETC is a good investment at all, given the issues it has going for it.
For one, it is directly opposed to Ethereum and considered an attack on the top altcoin, and only confuses new users and gets in the way of adoption. It also has been successfully 51% attacked a number of times.
A 51% attack occurs when a large enough miner gains more than 51% control over the network’s hash rate, then uses it to double-spend and steal coins. Ethereum Classic has been 51% attacked a number of times, making it extremely risky as an investment.
Ethereum itself has a lot more going for it and therefore is a far safer investment as a cryptocurrency.
Sometimes, the easiest way to understand if an asset is worthy of investment is to review historical price action. Ethereum price history has been wild and all over the place, which makes comparing the two cryptocurrencies even more interesting. According to CoinMarketCap, Ethereum price traded at $1 in 2015, then grew to a high of $15 in 2016. In 2017 alone, however, Ethereum rose from $10 to $1,400 at the high.
Ethereum’s growth was powered by the demand for ICOs, in which eager investors were hoping to strike it rich by finding the next big thing early swapped Ethereum for new tokens. But eventually, that trend ended, and the cryptocurrency fell from $1,400 to $80. Ethereum is back on the rise, trading at just under $500 per ETH. Ethereum Classic, however, is nowhere near its former peak.
In 2017, Ethereum Classic traded at $1 but climbed to as high as $20 at the peak. From the all-time high, it dropped back to $3 but is trading around $5 currently. $5 is a long way from Ethereum’s nearly $500, showing how much better ETH is over ETC as an investment.
Ethereum price predictions reach as high as $35,000 per token, meanwhile, Ethereum Classic price predictions are usually $0 or around current levels. This suggests that experts believe Ethereum (ETH) versus Ethereum Classic (ETC) is a much safer bet.
Ethereum has nearly everything going for it and is the most bullish altcoin in the space. Most of the rest of the cryptocurrency market is built on top of Ethereum’s smart contracts, and most other tokens require ETH to use them, keeping it in strong demand.
Ethereum is central to the entire DeFi trend that has been exploding across crypto in recent months. Ethereum is the top ranked altcoin, second to only Bitcoin in terms of overall market cap.
Ethereum Classic is now more than 30 ranked down the list of cryptocurrencies by market cap, and it is difficult to say it even deserves that. The token is more of a capital trap for new crypto investors who don’t know the difference and think it is Ethereum. 51% attacks keep ETC a high-risk cryptocurrency, more so than other assets in the emerging asset class.
Because ETH and ETC are both Ethereum and very similar due to this, it has left many questions lingering that crypto investors and traders commonly ask about. Here is the list of frequently asked questions.
Ethereum Classic is the original form of Ethereum that was supposed to be abandoned after millions of Ether were stolen in the hack of The DAO. Ethereum experienced a soft fork, and the result was two blockchains: Ethereum and Ethereum Classic.
Ethereum is the new blockchain that resulted but is considered the authentic Ethereum by community consensus. Ethereum is the most dominant altcoin today and is ranked only behind Bitcoin.
he main difference is in each asset’s viability as a long term investment. Ethereum Classic is regularly attacked and may never be used again, while Ethereum is actively used in thousands of tokens and decentralized applications.
Ethereum and Ethereum Classic both started off as the same blockchain network but eventually split. This was due to an attack on The DAO, which used Ethereum to raise capital. With so much Ether at stake, a software fork was proposed.
Ethereum Classic has since run into many issues with 51% attacks. Over the last few years, the network has been 51% attacked at least five times.
Ethereum Classic doesn’t have a bright future, but it does have one. It will hang around as long as the community supports it, which is barely.
Ethereum Classic is worth only $5. By comparison, Ethereum is worth nearly $500 in 2020.
Ether is the name of the ETH token that is used as gas fuel for the Ethereum blockchain. The two terms are often used interchangeably, but Ether refers explicitly to the cryptocurrency token.
Ethereum is by far the best choice when it comes to investing. Ethereum is also a better asset to trade because it experienced more natural market volatility due to it being regularly used and traded in crypto. Ethereum Classic’s price barely ever moves because no one is interested in it anymore.
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