What is Ethereum Classic?
Ethereum Classic (ETC) is the old Ethereum blockchain that remained after the DAO hack which led to a hard fork of the blockchain. Ethereum Classic has the same features and functionality as Ethereum, the currency represents an ideological difference in the Ethereum community.
The DAO hack
The DAO hack is what caused the whole debate about hard forking the Ethereum blockchain. The Decentralized Autonomous Organization (DAO) was a complex smart contract for Ethereum. The contract allowed for a decentralized venture capital fund which was going to fund all future decentralized applications running on the Ethereum blockchain. Within 28 days the project raised over $150 million worth of ether in a fundraise. On June 17th of 2016, a loophole in the smart contract was exploited by hackers. The attackers got away with one third of the DAO funds, worth over $50 million dollars at the time.
The aftermath of the DAO hack
Even though the hackers got away with the money, they couldn’t access it for 28 days, which is a safety function that developers of the DAO put into the smart contract. There were big disagreements in the Ethereum community considering on how to move on with the blockchain. Some wanted to leave the funds stolen, because making any changes to transactions goes against the underlying philosophy of the blockchain and cryptocurrencies in general. The majority of people in the community however decided to take the stolen money back. So the developers of Ethereum decided to hard fork the blockchain. Two blockchains resulted from this hard fork, one of them is the old Ethereum blockchain and one is the new Ethereum blockchain. The new Ethereum blockchain was named Ethereum, the DAO funds were returned to their owners on this blockchain. The old Ethereum blockchain still contained the stolen funds, it is now called Ethereum Classic.
Ethereum Classic vs Ethereum
Ethereum Classic represents an ideological difference. ETC represents the part of the community, who stand for transactions that are immutable. The basic value of a blockchain is that no central organisation can change a transaction. And even though the DAO funds were stolen, many members of the Ethereum community believe that they should stay stolen because of those basic values of a blockchain. Ethereum Classic works basically the same way as Ethereum. They both feature smart contracts and support decentralized apps. Ethereum Classic has a legitimate team of developers and is even featured on Coinbase, one of the largest cryptocurrency exchanges in the world. However, many people still use Ethereum, even though it has broken basic values of a blockchain, hence the difference in price of the two cryptocurrencies. As of this moment, Ethereum is worth 20 times more than Ethereum Classic.