The History and the Differences between Ethereum and Ethereum Classic
Until the year 2016, there was only one ethereum, but the big hacking that took place on June 17, 2016, created a new ethereum and renamed the previous ethereum “Ethereum Classic.” In this article, we review the story of the emergence of Ethereum Classic and its differences with Ethereum. Continue with ExPay 24.
What is Ethereum?
Ethereum is born from the creative mind of Vitalik Buterin, a Russian programmer and genius. He was one of the first developers to move to Bitcoin and blockchain technology. At the end of the year 2013, Vitalik unveiled a new platform we know as Ethereum because Bitcoin couldn’t handle certain activities.
Ethereum is a decentralized platform based on smart contracts that aim to be a world-class supercomputer. The currency of this platform is also called Ether (ETH). Decentralized applications can be implemented on the Ethereum network and blockchain, which continue to operate without the need for any intermediaries. There is no likelihood of disruption, censorship, fraud, or third party interference with programs running on Ethereum.
Now let’s talk about Ethereum Classic and ethereum. What is the difference between the two? But before that, let’s review the story of another Ethereum.
DAO and Hacking it
By the year 2016, things were going according to Ethereum. The network was able to perform all of its preset programs promptly. Although less than two years after the network was officially launched, the price of each ether unit rose a few hundred percent to over $ 21, placing second in the market with a large margin over Litceoin.
In May 2016, a revolutionary plan called DAO for Ethereum was introduced that doubled the hopes for the future of Ethereum. Before you understand the concept of DAO, you need to become familiar with the concept of a smart contract. The entire Ethereum ecosystem works on smart contracts.
What is a smart contract?
To better understand smart contracts, let’s first review the concept of a contract once. A regular contract is an agreement that commits two or more people to do something, such as buying or selling property or a car. For the contract you are closing to be valid, you need a witness who can be a real estate consultant or a notary or any other entity.
Now, what is a smart contract? The smart contract is a programming code that can no longer be stopped after it is executed on the blockchain. Whenever the terms of the contract occur, they will undoubtedly be implemented. There is no need for an intermediary to execute a smart contract. The decentralized application can be built using a smart contract. Theoretically, when a decentralized program is run on the Ethereum blockchain, it will no longer be stopped or controlled by a particular person.
What is DAO?
DAO, short for “Decentralized Autonomous Organization” meaning” was an advanced smart contract that was going to be a major revolution on the Ethereum blockchain. In simple terms, DAO was a decentralized investment fund aimed at raising funds to develop decentralized programs.
The process of DAO was that people could buy ethereum and deposit it into DAO. In exchange for ethereum, the DAO would give investors tokens with which they could vote.
Programmers could submit their ideas and then the election was performed among DAO token holders. If 20% agreed to the plan, the DAO fund would automatically provide the developer with the capital needed to build its plan and then make a good profit for itself and its investors after building the plan.
Although the plan was complex, it had no problems with the implementation process.
The DAO program was the first decentralized PA that started widely and all processes were decentralized and without intermediaries. Democracy in the true sense.
In less than 30 days since the introduction of DAO, the fund attracted more than $ 150 million Ethereum, and many investors were in the process of buying more tokens. At that time, $ 150 million of ethereum was 14% of all mined ethereum.
The DAO code had a defined function by which investors could give their DAO tokens at any time and retrieve their Ethereums.
The DAO also had the opportunity to create a “Baby DAO” so that investors could create their DAOs with their tokens and invest in decentralized capital plans.
Hacking of DAO
Things were going well until on June 17, 2016, an anonymous hacker was able to exploit the security bug in the DAO code and transfer more than $ 50 million worth of ethereum to himself.
The price of ether fell from $ 20 to $ 12 in just a few days, and everyone was shocked. The hacking of DAO somehow damaged the name of Ethereumm and its platform. Remember, however, that this does not mean hacking Ethereum. Suppose Ethereum is the Internet and DAO is a website on the Internet. There was nothing wrong with the Ethereum network itself.
What should they do?
According to one of the terms of the DAO contract, the request for the ethereum transfer was made after 28 days. That is, the hacker could not collect the funds for up to 28 days, so the main developers had about a month to think of a solution. There were generally three ways in which the ethereum community could go through:
- They didn’t do anything. That is, under the rules of the network and the rule that “code is the law,” the hacker would collect $ 50 million, which was a natural thing in the decentralized nature of the blockchain.
- Soft fork to return assets
- Hard fork to return assets
The majority of the community decided not to let the ethereum credibility be questioned and refunded the amount using Soft Fork.
What is Soft Fork?
As you probably know, a blockchain cannot be changed. So what if there is a need to update it or if some people are unhappy with the rules of a blockchain? There are two ways: either Soft Fork or Hard Fork
Soft For is an update to the Blockchain that is backward compatible. backward compatible is like opening a word file made with word 2016 in word 2003. In simple terms with Soft Fork, an update is done on the blockchain, but those who do not want to update can still work on the network.
The Ethereum developers wanted to block the DAO hacker transaction without changing the ethereum blockchain rules and the nodes ignore the hacker transaction blocks so that the funds could be returned. We will not see a new coin and blockchain in Soft Fork.
Everything was ready for Soft Fork until the Ethereum developers put it in an article that if Soft Fork executes, the Ethereum network will be at risk of DDoS attacks for some time, and by using overcrowded and non-commissioned transactions (GAS) can cause network congestion and stop transactions, and this risk for Ethereum is more than a DAO hack. The hacker can also interfere with the transaction approval process by paying high fees for the transaction, and we will see the transaction free blocks.
So there was one solution left: Hard Fork
What is Hard Fork?
The hard fork is simply a change in blockchain rules that is not backward compatible, so older versions cannot function as nodes on the network. So you will have to update your version to use the new updates, otherwise, you will not be able to work as a node on the network.
As with the word file example mentioned above, suppose you can’t run a text file made in word 2016 in word 2003 because the structure of this program has changed a lot.
Birth of the New Ethereum
Developing hard forks and changing the ethereum rules made a lot of difference among developers. Opponents were saying “the code is the law” and changing the law is against the decentralization ideals.
As we said, if there is widespread disagreement, the hard fork will lead to the new blockchain and digital currency. As the opponents continue to run their old version and the new one runs its own.
The big hard fork took place at block 1920000 block, a block before the DAO hack occurred to get investors’ money back. This created a new blockchain and a new digital currency. The holders of the old currency also received the new currency.
Due to the widespread support for the new hard fork and the support of major developers such as Vitalik Buterin, the ethereum that first existed was renamed the Ethereum Classic with the ETC symbol, and the new ethereum was called ethereum. This was not usual. Because usually the name of the previous blockchain remains the same and they give it a name for the new blockchain, such as bitcoin and bitcoin cash.
Ethereum Classic, like Ethereum, is based on a decentralized blockchain. Like Ethereum, it has its decentralized currency exchanges and applications, and works on smart contracts, of course. The programming language of its conventions is also solidity.
Ethereum classic is the same as ethereum but on the old blockchain.
Since then, both groups of users have done a variety of work on this blockchain, but over time, the differences between the two versions have been increasing.
Ethereum vs. Ethereum Classic
We can say that power came over ideology in Ethereum and Ethereum Classic. Given the large number of developers and activists turning to Ethereum, the power and influence of the Ethereum network are far above that of Ethereum Classic.
Differences between Ethereum and Ethereum Classic | Decentralized programs
According to one of the main developers of Ethereum Classic, after Fork, about 90 percent of developers and decentralized applications (Dapps) moved to Ethereum. Decentralized applications of Ethereum are far greater than Ethereum Classic so that the number of active Ethereum Classic Dapps does not reach the number of fingers.
There are not many development tools on Ethereum Classic that make programming difficult. For example, Ethereum developers can use Metamask and other development extensions, but Ethereum classic developers do not have access to it.
Differences between Ethereum and Ethereum Classic | Market
In terms of price and trade volume, while the supply of both is almost the same, Ethereum Classic has nothing to say in comparison to Ethereum. Ethereum has maintained in the second tier for a long time, but Ethereum classic after Fork was in a terrible state and kept going to the lower ranks in the market.
Differences between Ethereum and Ethereum Classic | Mining
Both currencies use the same mining algorithm, Ethash, and so the same mining hardware can be used for both of them. Mining profitability in both is almost the same because when one’s profitability increases, the miners rush in, causing a relative balance between the two.
While Ethereum seeks to block the mining of specific ASICs using the ProgPow algorithm, Ethereum Classic has not yet done so. With ProgPow running on Ethereum, it could only be mined with a graphic card (GPU), but Ethereum classic could be easily mined with ASIC.
Most importantly, Ethereum seeks to go from Proof Of Work to Proof Of Stake where transactions require no power or hardware and people can make money from approving transactions by buying Ethereum and assigning it to the network. However, Ethereum Classic does not have such a plan.
While the number of Ethereum units still has no definite ceiling and annual inflation will be considered, the number of Ethereum Classic units is limited and will only be mined up to 210 million units.
The hash rate of the network, or the processing power that the miners have allocated to the Ethereum Classic network, is substantially lower than that of ethereum, and therefore we can say that Ethereum Classic security is lower than that of ethereum.
Over the past couple of years, Ethereum Classic seemed to be a derelict and dangerous network, but recently its developers have been able to sign contracts with several large companies and make many updates to Ethereum Classic network. The most recent update to Ethereum Classic at the time of writing this article has been Atlantis Hard Fork, which enables interaction between Ethereum and Ethereum Classic and also anonymous transaction capability has been added to it.
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