The thing we must appreciate about blockchain and cryptocurrency is the high competitiveness and the involvement of the community. And debates such as Ethereum vs Ethereum Classic illustrate how much power do the users hold in the crypto community.
Many big companies are known for taking decisions that disappoint their customers. Yet, for the lack of a better option, the customers still stuck with them.
However, in the crypto space, when a portion of the community disapproves of a decision, they can just go forward and have a hard fork.
And that’s how the Ethereum Classic appeared. A group decided that Ethereum isn’t going the right way and they hard forked into their own Ethereum. With Blackjack and…you know how it goes.
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The thing with Ethereum
Vitalik Buterin and his co-founders started Ethereum in 2014 as an attempt to decentralize the internet through smart contracts and decentralized applications.
The concept quickly got traction and the developers from the crypto community started getting involved with Ethereum more and more.
It started by employing proof-of-work for achieving consensus, just like Bitcoin does. However, the discussion about the proof-of-stake Ethereum began in September 2014.
And nowadays we’re closer than ever to seeing Ethereum 2.0 coming out with staking and a speed of tens of thousands of transactions per second. Ethereum is the biggest dapps platform, the main platform for developing DeFis, and the second cryptocurrency by market cap. But as successful as it sounds, there are still controversies around the community that creates divisions.
The DAO Incident
DAO is a term that has been around for quite a while, especially because of the DAO attack that’s been the main root of the Ethereum Classic vs Ethereum dichotomy.
And if this is your first time hearing about it – no, we did not start talking about martial arts.
DAO is short for Decentralized Autonomous Organization. A DAO has the goal to codify the rules and decision-making process of an organization in order to handle the governance of a project without involving people. In a way, it started off from the “code is law philosophy” that strives towards further decentralization.
The infamous DAO that almost broke Ethereum was a type of a blockchain-based venture capital fund that allowed organizations to secure funding within the Ethereum ecosystem.
It was launched in April 2016 and came out with the main idea that all participants could vote where the capital obtained in the ICO would be invested.
So, 10,000 people anonymously invested $168 million into it making it the largest crowdfunded project since then.
Like always, that much hype became a magnet for bad actors.
It didn’t take long, and some hackers managed to find a loophole in DAO’s smart contract.
By taking advantage of the split function that allowed participants to form child DAOs to support different projects, the hackers managed to steal $50 million dollars on July 17, 2016.
At that moment, Vitalik Buterin and the Ethereum platform took a significant credibility hit.
So, to counter this crisis, Buterin and the Ethereum team decided to amend the code of their blockchain, removing the funds from the hackers’ accounts, and returning them to their owners.
The Ethereum vs Ethereum Classic schism
The Hard Fork solved the DAO crisis. But the Ethereum team’s intervention to help out one particular developer was not received well by everybody.
2 of the core values of blockchain are decentralization and immutability. Yet the Ethereum team took the initiative to change a past event inside the blockchain.
At the moment of the hard fork, the Ethereum community was faced with choosing between recovering the funds and letting the hackers run away with the stolen ETH.
The majority chose to recover the funds, joined the hard fork, and continued the Ethereum Blockchain from the point before the funds were stolen.
There was of course a faction that believed that the blockchain should never be tempered with and decided to continue the original blockchain of Ethereum as Ethereum Classic. For the Ethereum Classic adepts, the “code is law” philosophy was more important than recovering the stolen Ether.
The Problems with Ethereum Classic vs the Problems with Ethereum
Today, both platforms and cryptocurrencies exist and are mostly similar in functionality. But they are anything but the same.
The difference in perspective, community support, and leadership since the hard fork made a clear difference in getting the platforms through different paths of evolution, development, and problems.
In terms of market cap
Ethereum held the second position as the most popular cryptocurrency for a long time. It is the second-biggest cryptocurrency by market cap, with over $67 billion, and a price of approximately $600 (As of December 2, 2020).
On the other side, Ethereum Classic goes lower and lower in popularity, as there are many more projects coming into the market. As of December 1, 2020 – Ethereum Classic holds the #36 position by market cap with $732 million, and a price of $6.29.
These numbers show clearly that Ethereum has fared far better over time than Ethereum Classic.
Platform performance, consensus, and evolution
In terms of performance, we can say that both Ethereum Classic and Ethereum are just as fast.
And they both employ the POW consensus protocol and are designed to use the consumer’s graphics processing units (GPU).
Up until December 2020, 3-4 GB VRAM cards were just enough for mining on both blockchains. But as of December 16, they will only be used for mining Ethereum Classic. That happens because starting from epoch 382 of the Ethereum blockchain, the gradually increasing DAG file size will get too big for older GPUs. After that, Ethereum will only be mined with newer, more powerful GPUs and ASICs.
Furthermore, Ethereum is getting closer and closer to 2.0, switching to Proof of Stake, which will drop GPUs and ASICs altogether.
On the other hand, Ethereum Classic is going the other way.
Being accused of having an unsafe blockchain due to the several 51% attacks in recent years, Ethereum Classic vowed to make the network more resilient. Thus, on November 29, 2020, Ethereum Classic has undergone a hard fork that introduces a new upgrade aimed to increase miner participation and increase security.
This way, the older GPUs dropped by Ethereum will be welcomed on Ethereum Classic.
How will that work in terms of profitability and blockchain efficiency is yet to be seen.
The Pros of Ethereum vs the Pros of Ethereum Classic
The first thing to mention here is ideology. In terms of ideology, Ethereum Classic stuck to ”code is law” giving a place to those that took that idea to heart.
On the other hand, Ethereum showed the right type of flexibility to manage and go through a crisis and improve.
The dapps platform
Saying if one approach is morally superior to the other is quite complicated, but as far as the Ethereum community goes, Vitalic Buterin’s decision comes out as better as a whole.
Furthermore, the dapps developers found Ethereum to be the most suitable for their decentralized application to a degree that made this platform the main host for DeFis.
In the dapps sector, Ethereum Classic presents itself to be more gas efficient and also providing faster operations. Even so, their dapps platform is far from being considered competition as most developers seem to choose Ethereum.
One of the first things to consider about mining is the difficulty. A higher difficulty translates into more network safety and resilience against 51% attacks. However, it may also mean fewer profits for miners.
When it comes to mining Ethereum reached the highest point of average difficulty on Tuesday, December 1, 2020. It was 3,692.342 TH and as December progresses it’s likely that the difficulty will increase.
In Ethereum Classic’s case, the mining difficulty on December 2, 2020, is 73.14 TH.
- Ethereum is the biggest dapps platform, the main platform for developing DeFis, and the second cryptocurrency by market cap.
- DAO is short for Decentralized Autonomous Organization and describes a wide range of cryptocurrency projects. It is not to be confused with “the DAO” that almost broke Ethereum.
- The DAO attack is the main root of the Ethereum Classic vs Ethereum dichotomy.
- The hard fork meant to solve the Ethereum DAO crisis led to the apparition of Ethereum Classic. A part of the Ethereum community believed that the blockchain should be decentralized and immutable, preferring to split from the main blockchain and let the hackers get away with their funds rather than breaking the philosophy.
- As Ethereum is looking to switch to staking, Ethereum Classic is making proof of work mining more accessible to older equipment in order to increase miner participation and increase security.
- Although Ethereum Classic presents itself as faster and more gas efficient, the dapps developers prefer Ethereum’s platform for decentralized applications, and that was once again clearly shown with the DeFi ascendence.