Ethereum vs. Ethereum Classic
Curious about the difference between Ethereum and Ethereum Classic? You’re not alone. These two crypto assets share many similarities apart from just their names.
In fact, Ethereum Classic was created because a group of users chose not to upgrade to new code recommended by Ethereum developers in light of the DAO hack, and chose to run the Ethereum blockchain unaltered.
Let’s dive deeper into the differences between Ethereum and Ethereum Classic.
ETHEREUM
Ethereum was built to be a kind of operating system for any number of custom assets and programs. A majority of its users upgraded its software to restore funds to those who lost them during the DAO hack.
ETHEREUM CLASSIC
Ethereum Classic is a continuation of the older Ethereum software with the record of the theft. By continuing to run this code, the users effectively created a new cryptocurrency.
To further understand how these two complex networks work, read below for a side-by-side comparison of Ethereum vs Ethereum Classic so you can start to better understand and appreciate the differences yourself.
The difference between Ethereum and Ethereum Classic
DATE FOUNDED
Ethereum
The Ethereum white paper was published in late 2013 and the software went live in July 2015. In 2021, the network is scheduled to complete an extensive overhaul of its software that will bring it closer to the completion of its roadmap.
Ethereum Classic
The Ethereum Foundation created a new version of the Ethereum Network on July 20th, 2016, the date at which the older, unaltered version of Ethereum was renamed to Ethereum Classic.
CREATOR
Ethereum
Ethereum was created by 19-year-old Vitalik Buterin (with many others contributing to its code). Buterin was previously a founder at the publication Bitcoin Magazine and a 2014 Theil Fellow.
Ethereum Classic
While difficult to pinpoint who exactly created Ethereum Classic, the developer most associated with the decision to continue maintaining the original Ethereum is the anonymous Arvicco who credited a larger group of users with the idea.
TICKER
Ethereum
ETH
Ethereum Classic
ETC
VISION
Ethereum
Ethereum was created with the intention of becoming a global, open-source platform for custom assets and new kinds of economic applications.
Considered to be one of the most ambitious blockchain projects to date, Ethereum seeks to leverage blockchain technology to decentralize products and services in a wide range of use cases beyond money.
To date, Ethereum has seen a few distinct phases that have emphasized different aspects of its capabilities.
First, entrepreneurs flocked to Ethereum in 2017 during its famous “ICO boom”, where creators would try to raise money for new projects using new assets on the Ethereum blockchain.During this time, Ethereum was seen as something of a global capital allocator and funding mechanism.
A new phase of Ethereum, called decentralized finance (DeFi), has started garnering attention in 2020. This movement saw the creation of decentralized applications (dapps) intended to automate financial services like lending or borrowing without the need for a traditional bank or intermediary.
Ethereum Classic
When Ethereum Classic (ETC) emerged, it challenged the idea about how blockchains could be launched, altered and upgraded.
Rather than copying and modifying an existing cryptocurrency software, or writing a new software from scratch, a minority of users continued to maintain the older Ethereum software with the record of the DAO hack after the software, now known as Ethereum, was upgraded.
Thus, the Ethereum Classic fork occurred over an ideological dispute among Ethereum users over the “immutability” of the software, or the inability of any user to alter transactions that have been added to the blockchain’s history.
Ethereum Classic users saw the code proposed by Ethereum’s developers in the wake of The DAO as violating an essential guarantee of the software. Project developers tended to view the code as a one-time fix for a beta software.
LAUNCH & ISSUANCE
Ethereum
Vitalik Buterin envisioned Ethereum as a “world computer” on which anyone could launch and run an application.
This idea was propelled forward by a non-profit, the Ethereum Foundation, which sold 72 million ETH, Ethereum’s cryptocurrency, in a crowdsale, to raise $18 million at the time.
However, what would distinguish Ethereum early on was the vibrant developer community that would soon spin up around the project.
Meaningful contributions to its technology would be made by developers like Gavin Wood, Jeff Wilke, Joseph Lubin and Charles Hoskinson, who all would go on to become prominent voices in the blockchain ecosystem.
Ethereum Classic
The first block of Ethereum Classic (ETC) was mined on July 202th, 2016.
The Ethereum network split into two incompatible currencies with two separate transaction histories when several Ethereum users elected not to upgrade to new code recommended by project developers.
As a result, anyone who owned ETH at the time received an equal allocation of ETC.
Since that time, the Ethereum Classic blockchain continues to follow similar rules as Ethereum, rewarding new ETC to miners every time a block is found.
NETWORK DESIGN
Ethereum
In order to create dapps, developers write programs, called smart contracts, and deploy this code to the Ethereum blockchain. These dapps are essentially large constructions of smart contracts that can be set in motion if and when specific outcomes are met.
Similar to Bitcoin, Ethereum employs Proof of Work (PoW) mining to power its blockchain.
However, the network is in the process of migrating towards Ethereum 2.0, at which time it plans to alter its consensus mechanism to an alternative called Proof of Stake (PoS).
Under this model, any user who owns a minimum of 32 ETH could lock those funds in a contract and earn rewards for solving computations needed to add new blocks to the blockchain.
Ethereum Classic
The network itself can, like Ethereum, be used to develop and run decentralized applications by deploying smart contract code to the Ethereum Classic blockchain.
The main differentiation is that the Ethereum Classic community has decided to continue using proof-of-work mining to secure its blockchain, a consensus mechanism where miners race to complete cryptographic puzzles to propose blocks that make up its blockchain.
When a block is discovered by a miner, it is announced to the network, and, when it’s verified by every node, the miner gets compensated in newly minted ETC.
MONETARY POLICY
Ethereum
Ether (ETH) is the main cryptocurrency powering Ethereum. Similar to Bitcoin, ETH is minted in every block and distributed to its miners.
However, where Bitcoin has a limited supply, Ethereum does not place a limit on the amount of ETH that can be minted, and its supply is programmed to increase by 4.5% each year.
Notably, changes to the monetary policy are proposed by developers and voted on by nodes and miners running the software.
The Ethereum blockchain is also powered by another cryptographic function called “gas,” which is a special computational unit used for the computation fees. Of note, the more complex the computation, the more gas a given program will require.
Ethereum Classic
ETC is the main cryptocurrency powering Ethereum Classic. Similar to Ethereum, ETC is minted in every block and distributed to its miners.
Ethereum Classic, however, differs in that it has adopted a fixed monetary policy. The total amount of ETC that can be created is capped at 230 million ETC, meaning scarcity factors into its value.
Useful resources
If you are interested in learning more about Ethereum and Ethereum Classic, please visit Kraken’s “What is Ethereum?” and “What is Ethereum Classic?” pages.
If you want to learn more about the consensus mechanisms that power each blockchain, then the “Proof of Work vs. Proof of Stake” page is where you want to go!
Want more in depth information on specific cryptocurrencies and blockchain projects? If so, visit our Learn Center to further your education on this ever-growing space.