Ethereum is a big name in the cryptocurrency space. Apart from being the second largest crypto asset by market cap, it is also a network for building smart contracts and decentralized applications (Dapps).
But there’s one like it – Ethereum Classic. Both of them share a common purpose, which is to facilitate smart contracts and dapps. However, they are also fundamentally different in many ways.
Many people may find the two confusing and may have mistaken one for another, so this guide sets out to distinguish between them.
What Is Ethereum?
Ethereum is the foremost blockchain network for building smart contracts and dapps. It was the first network developed for this purpose, and currently supports hundreds of projects, including crypto tokens, decentralized exchanges, and decentralized finance (DeFi) projects.
These projects work with ether as the utility token. It is used to pay for gas and other fees on the Ethereum network. The network is supported by a proof-of-stake (PoS) consensus mechanism. This algorithm allows people to staker their ether to secure the network and in return get more ether as reward.
Being a utility token, there’s an unlimited supply of ether for use on Ethereum, but the growth of supply is limited to 4.5% per year. Ethereum is also the second biggest cryptocurrency by market cap after Bitcoin.
What is Ethereum Classic?
Ethereum Classic is an open-source crypto project, just like Ethereum. The team describes it as a decentralized computing platform and distributed cryptocurrency that supports smart contract functionality.
The project was forked from Ethereum in 2016 and has since been operating independently. They however have some similarities since one came from the other. However, they also have some major differences, even though developers can also use Ethereum Classic to build dapps.
How Ethereum Classic Came About?
Ethereum Classic was created from Ethereum in 2016. This came as a result of a disagreement following a hack on the Ethereum network. The hack affected a smart contract known as the Dao, and led to the loss of $60 worth of ether.
This led to a split among the community of developers. Some developers wanted the network to ignore the hack and move on with the project while others wanted to reverse the hack and return the fund.
The first group ended up creating Ethereum Classic, while the second group stayed with the original Ethreum. The Ethereum Classic camp disagreed that the Dao developers should be bailed out, while the Ethereum camp wanted to help the developers revolver the funds.
Ethereum Classic was then created through a hard fork, and the two projects now have one major difference – Ethereum supports alteration of transactions while Ethereum Classic maintains irreversible transactions.
Difference Between Ethereum and Ethereum Classic
The most prominent difference between Ethreum and Ethereum Classic is in immutability. Ethereum allows for alteration to prior transactions, while Ethereum Classic maintains immutability, meaning transactions cannot be tampered with once it has been finalized.
Secondly, Ethereum has now migrated from proof-of-work (PoW) consensus algorithm to proof-of-stake consensus algorithm. Ethereum Classic on the other hand has maintained the PoW consensus of Bitcoin.
Also noteworthy is the fact that Ethereum’s ether token has no supply cap, so it will continue to be released as long as there’s demand. However ETC has a limited supply of 320 million tokens.
Similarities Between Ethereum and Ethereum Classic
While Ethereum and Ethereum classic are two different projects, they also have some similarities considering that one came out of the other. First, they are both decentralized crypto projects, meaning there’s no central authority in charge of them.
Both networks also reward validators and miners through transaction fees, and they both support smart contracts and dapps. Both networks maintain pseudonymous transactions, which means you cannot tell who is behind a transaction, even though the public key remains public for everyone to see.
Hopefully now you can easily differentiate Ethereum from Ethereum Classic with this guide, and you can also teach others the difference.
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