In four words or less: the original Ethereum
Ethereum Classic (ETC) is the original Ethereum blockchain. It’s designed for decentralised applications (dapps) and smart contracts. In 2016, a hacker discovered a design flaw in The Decentralised Autonomous Organisation (DAO) running on the Ethereum network. The hacker was able to steal over 3.6 million Ether from The DAO. To prevent the stolen Ether from being spent or held, the Ethereum network was hard forked, which means a split in the blockchain. The original chain is called Ethereum Classic (ETC) and the new chain is called Ethereum (ETH).
What problem does Ethereum Classic solve:Big tech companies have too much control over our data. That’s not cool. Legal contracts are inefficient and expensive. Automatic smart contracts remove the need for expensive middlemen (like lawyers). ETC could become a scarce commodity used to power the Internet of Things.
Properties of Ethereum Classic:
- Following the hard fork, ETC is not backwards compatible with Ethereum. This means that updates to the Ethereum network don’t apply to Ethereum Classic
- ETC runs on a Proof of Work consensus mechanism (like Bitcoin)
- You can build conditional contracts that execute autonomously. These are called “smart contracts” and can execute agreed upon terms
- Smart Contracts can be legally enforceable and could benefit countless industries by removing time and human error from contract processes
- Combining Smart Contracts with Blockchain tech means that anyone can create their own monetised Internet Applications. When the technology matures, this is likely to be a big deal
Adoption and penetration:
Ethereum Classic has not yet gained the wider acceptance enjoyed by Ethereum. It is however tradable on most of the bigger crypto exchanges. A notable backer of Ethereum Classic is respected crypto investor Barry Silbert’s Grayscale Investment Group.
Management and governance:
The ETC network is maintained by a team of developers.
Risks and limitations
The DAO hack caused a split in the Ethereum community. The Ethereum developers made a decision to revert the hack and return the stolen ETH to their respective owners. However, a core philosophy in blockchain is that transactions cannot be edited or deleted. Ethereum Classic supporters see this immutability as essential, or put another way, “code is law”. Ethereum and Ethereum Classic now have separate supporters and developers but the vision for both remains the same - to become the world’s first decentralised computing platform.
Competition: Ethereum, NEO, EOS