Ethereum Classic is an open source, public blockchain that is fueled by the Ethereum Classic cryptocurrency ETC, which came about as a result of an Ethereum fork in 2016.
Ethereum Classic came into being due to a failure within the Ethereum community to agree on how to handle a $50 million theft that resulted from a paper identifying key security inadequacies in the decentralized autonomous organization, more commonly referred to as The DAO.
A divided Ethereum Community and investor base had two final options:
- Reverse the theft and restore the accounts from which the Ethereum coins had been stolen by way of a fork, the stolen coins sitting in a child DAO due to smart contract language that prevented the removal of any invested funds for 28-days.
- Reject the hard fork to protect the immutability of the Ethereum blockchain and continue to use the original, unforked version of Ethereum, this being Ethereum Classic.
(The hard fork refunded DAO investors by way of a refund smart contract).
The principal of Ethereum Classic’s blockchain is to decentralize information stored on the web, competing against internet-based data warehouse companies, to protect internet-based data from theft.
As with Ethereum (ETH), Ethereum Classic (ETC) delivers a decentralized Ethereum Virtual Machine (EVM) as well as smart contracts and a platform to create decentralized applications (“DApps”).
Unlike Bitcoin, Ethereum Classic was not created to provide an alternative to fiat money, while Ethereum Classic’s smart contract offering has made it a chosen payment source in initial coin offerings.
Classic Ether tokens are created to fund the Ethereum Classic blockchain development and expansion.
The original idea of Ethereum was conceived by Russian – Canadian Programmer Vitalik Buterin and co-founded by Mihai Alisie, Anthony Di Lorio, and Charles Hoskinson.
Ethereum was released on 30th July 2015, after Buterin initially released a white paper in 2013.
There are a finite number of Classic Ether tokens, the total number of Classic Ether tokens issued capped at 18 million per year, with a fixed cap of 230 million tokens.
The creation of each individual Classic Ether token comes from mining, which is rewarded to miners in the blockchain verification process by way of a proof-of-work algorithm.
The Ethereum Classic blockchain requires thousands of users, called nodes, running Ethereum virtual machines that are able to execute smart contracts.
Classic Ether Tokens not only act as a fuel for the decentralized apps or software in the Ethereum network but are also used to cover transaction fees stemming from any change requests made for existing apps.
The transaction fees are calculated based on how much ‘gas’ an action demands, which is equivalent to the amount of computing power and time is taken to make a change.
Some distinct characteristics of Ethereum Classic include:
- There are no physical classic Ether tokens, only virtual.
- There are only a finite number of classic Ether Tokens.
- Ethereum Classic is the original blockchain of Ethereum
- Ethereum Classic lost the support of founders Vitalik Buterin and Gavin Wood, who moved to the new Ethereum blockchain.
- Ethereum Classic does not receive Ethereum’s updates, which has left Ethereum Classic on a proof-of-work algorithm, while Ethereum runs on a proof-of-stake algorithm.