Ethereum Classic (ETC), the 23rd-largest cryptocurrency by market cap at press time, is one of the oldest proof-of-work (PoW) blockchains. The open-source decentralized blockchain platform with smart contracts functionality has grown so much in popularity and adoption ever since its emergence in 2016.
The September switch to the proof-of-stake (PoS) consensus on the Ethereum blockchain further increased the adoption of Ethereum Classic as more miners made the chain their home. This article seeks to dive into the rich history behind Ethereum Classic, discussing the inner workings of its native token ETC, how it differs from Ethereum (its ‘sister’ blockchain), and some of its exciting use cases and applications.
So, without further ado, let’s dive into the world of Ethereum Classic!
An Overview of Ethereum Classic
What is Ethereum Classic? What’s it all about?
Ethereum Classic is an open-source decentralized blockchain platform that runs smart contracts. In other words, it is a digital ledger that allows a multitude of transactions and agreements to be carried out securely and transparently without the need for a third party. This makes Ethereum Classic an excellent tool for building decentralized applications (dApps) that facilitate everything from online voting and supply chain management to peer-to-peer marketplaces.
Now you might be thinking, “This sounds similar to Ethereum. How is it different?” Well, that brings us to an interesting history of Ethereum Classic.
History of Ethereum Classic
Ethereum Classic and Ethereum share a history. The Ethereum network was launched back in 2015 to become a global platform for decentralized applications. It was a huge hit and soon people were using it for all sorts of things. But in 2016, a major controversy erupted on the Ethereum network called TheDAO, resulting in the splitting of Ethereum from its mainnet.
To prevent future hacks and protect the integrity of the network, the Ethereum Foundation—the organization behind the development of the largest smart contract platform, Ethereum—decided to implement a hard fork. A hard fork is a change to a blockchain’s underlying protocol that is not backward compatible. In other words, there is a ‘branch’ in the chain, with one version following the new rules and another version following the old rules.
This happened in July 2016 and led to the creation of two separate blockchain platforms: Ethereum (the version that implemented the hard fork) and Ethereum Classic (the version that keeps the original blockchain). Ethereum and Ethereum Classic have since lived as separate projects. But what are the key differences between both blockchain networks?
Differences Between Ethereum and Ethereum Classic
While Ethereum continues to grow to become one of the most popular blockchain platforms in the world, Ethereum Classic, on the other hand, has carved its niche as a decentralized, permissionless, and immutable platform that values censorship resistance. It has a dedicated community of developers and users who believe in Ethereum’s original vision and are committed to making it a reality. On the other hand, Ethereum is not censorship resistant.
In terms of monetary policy, ETC has a fixed supply of 210,700,000 coins while ETH’s supply is not fixed. Ethereum has changed its monetary policy six times ever since its inception and it is unpredictable what ETH’s supply will be in the coming years.
Additionally, Ethereum Classic follows a very conservative philosophy of high security called “Code Is Law” while Ethereum adopts a relatively more risky philosophy called “Weak Subjectivity” to pursue scalability.
So there you have it. That is the story of Ethereum Classic in a nutshell and how it differs from its sister blockchain. While Ethereum Classic may not have the popularity of Ethereum as the world’s #2 cryptocurrency, it is an important and influential project in its own right. This then leads us to how Ethereum Classic works.
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How Does Ethereum Classic Work?
Whereas the Merge upgrade transitioned Ethereum to a proof-of-stake (PoS) blockchain, Ethereum Classic operates by adopting the same consensus algorithm as Bitcoin—Proof of Work (PoW).
At its core, Ethereum Classic is powered by a decentralized network of computers (also called ‘nodes’) that work together to verify and record transactions on the blockchain. When someone wants to send a transaction (e.g. transfer ETC or interact with a smart contract), they send it to the network. The nodes then validate the transaction to ensure it is valid and follows network rules. If the transaction is approved, it is added to the blockchain and becomes part of the permanent record.
This process is called ‘mining’ and is performed by specialized nodes called ‘miners’. Miners use their computing power to solve complex mathematical problems and are rewarded for their efforts. These rewards come in the form of ETC, the native cryptocurrency of the Ethereum Classic network. Ethereum Classic has no maximum supply but has a circulating supply of 115,378,405 ETC.
This may sound a lot like other blockchain platforms so far. But this is where it gets interesting—Ethereum Classic has something called the Ethereum Classic Virtual Machine (ETCVM).
What is Ethereum Classic Virtual Machine (ETCVM)?
The Ethereum Classic Virtual Machine (ETCVM) is a global decentralized computing platform that executes smart contracts. It’s a virtual machine that allows developers to write and run code to facilitate various interactions and protocols on the Ethereum Classic network.
ETCVM allows Ethereum Classic to run decentralized applications (dApps) and perform a wide range of functions beyond simple financial transactions. It also allows smart contracts deployed on EVM-compatible chains like Polygon or Avalanche to be recognized by Ethereum nodes and allows developers to port their apps or tokens from Ethereum to other EVM-compatible chains with relative ease.
The ETCVM has more than 120 opcodes, replicated in all the network nodes to achieve absolute decentralization. Notably, the decentralized software programs on the Ethereum Classic blockchain, or smart contracts, are programmed using the popular coding language Solidity that encodes them using the opcodes of the ETCVM so they can be executed inside the system.
Applications of Ethereum Classic
Just like other blockchains, Ethereum Classic has its use cases which makes it more unique. One of the most striking features of Ethereum Classic is its focus on immutability. In the blockchain world, ‘immutability’ refers to the inability to change the record of past transactions. Ethereum Classic’s focus on immutability has attracted a large following and has a growing ecosystem of dApps and tokens.
This is in stark contrast to some other blockchain platforms that alter or are known to have altered transaction history for various reasons. Ethereum Classic maintains the original vision of Ethereum as a platform without such changes, which has garnered a strong following among decentralization advocates.
Another key use case for Ethereum Classic is token issuance. The Ethereum Classic blockchain allows you to create and issue your tokens, which can represent anything from virtual goods to financial assets. This has led to the emergence of a plethora of tokens built on top of Ethereum Classic and traded on various exchanges.
Related Post: What is Ethereum?
Conclusion
Ethereum Classic is a powerful and versatile blockchain platform that has a lot to offer. Its decentralized nature, smart contract functionality, and strong community make it an exciting and promising project. Although the project has already made a name for itself in the nascent industry, it has the potential to be used in a wider range of applications.
Of course, it’s hard to say categorically what height ETC will reach in the future but one thing is certain—it has a group of expert developers and supporters committed to its growth.
Meanwhile, the current bear season which began in late 2021 has been unfavorable to ETC. The asset, which clinched an all-time high (ATH) of $176.16 in May 2021 as shown on Coinmarketcap, is down by 88.54%, trading for $20.15 per coin at the time of writing. But looking back to July 2016, when ETC recorded its all-time low (ATL) of $0.452, the PoW-based crypto asset has grown by over 4361.95%, at press time.
Credit: Ndianabasi Tom
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