Ethereum Classic (ETC) is a decentralized, open-source digital currency platform that operates based on blockchain technology and supports smart contracts. Ethereum Classic was originally known as Ethereum and was designed and launched by Vitalik Buterin and the Ethereum Foundation in 2013. However, after the DAO hack in 2016, Ethereum split into two branches, and Ethereum Classic was created.

You might be wondering why Ethereum and Ethereum Classic separated. In this article, we provide a comprehensive overview of Ethereum Classic, including an introduction and explanation of the advantages and goals of this digital currency, as well as its challenges and how to buy ETC. If you are active in the field of cryptocurrencies or interested in this dynamic market, reading this article to the end can be very beneficial for you. Join us to gain a complete understanding of Ethereum Classic and to make more informed decisions about buying and investing in ETC.

What is Ethereum Classic?

Ethereum Classic is one of the major forks of the Ethereum network that emerged after the network was hacked in 2016. Unlike the current Ethereum, Ethereum Classic still allows users to mine and extract digital currencies. The native token of this network, the digital currency ETC, is also known by the same name.

Who are the creators of Ethereum Classic?

Vitalik Buterin, the young and famous creator of Ethereum, introduced this platform at the age of 19. With a keen interest in digital currencies, he closely studied Bitcoin's blockchain technology and sought to provide a better alternative, eventually creating Ethereum.

Buterin's main innovation in Ethereum was the use of smart contracts. These contracts, which act as self-executing pieces of code on the blockchain, allow for the programming and execution of agreements without the need for intermediaries.

Besides Buterin, other individuals also played a role in the creation of Ethereum. In total, eight people are recognized as the founders of Ethereum. However, according to The Block, Buterin later expressed regret over this decision, as some of the founders, including Charles Hoskinson and Gavin Wood, left Ethereum to pursue their own projects.

Currently, Buterin is the only original founder who continues to actively participate in the development of Ethereum Classic.

History of Ethereum Classic:

Ethereum Classic has its roots in the history of Ethereum. In 2013, Vitalik Buterin emerged with an innovative idea: creating a new programming language on the blockchain platform that allowed for the automatic execution of various activities. This revolutionary language paved the way for the emergence of new decentralized applications on the Ethereum platform.

Despite its tremendous potential, Buterin's idea was not initially welcomed by the Bitcoin community. Therefore, he sought to raise funds for his idea by launching a public offering. This offering in July 2014 was remarkably successful, raising over 25,000 bitcoins (equivalent to $17 million at that time).

The Ethereum network was born as an open-source and global platform, creating a major transformation in the blockchain world by enabling the creation of decentralized smart contracts. These contracts act as self-executing agreements between parties, automatically enforced by the blockchain upon meeting the specified conditions.

The immutable nature of the blockchain, along with Ethereum's open-source approach, led to widespread adoption of this technology by businesses.

However, in 2016, Ethereum experienced one of the largest cyber attacks in its history. This event significantly changed the course of Ethereum's history.

The attack on the DAO and the subsequent hard fork of the Ethereum network resulted in the separation of two paths:

Ethereum (ETH): The main Ethereum network that continued its path after the hard fork.

Ethereum Classic (ETC): The original version of Ethereum that became known as Ethereum Classic after the hard fork and pursued a separate path.

But what was the reason for this split?

It all traced back to a mistake by a decentralized organization called The DAO. This organization, established for crowdfunding investments in various projects, fell victim to a hacking attack, resulting in hackers stealing millions of dollars from its funds.

Following this event, the Ethereum community was divided on how to respond to this challenge. Two main solutions were proposed:

1. Returning the hacked funds to the victims: This solution, known as the "rollback," was supported by some community members.

2. Preserving the blockchain without any changes: Another group believed that maintaining the integrity and immutability of the blockchain history was more important.

Ultimately, with the majority vote, Ethereum underwent a hard fork, creating a new chain where the hacked funds were returned to the victims. This new chain became the Ethereum (ETH) we know today.

However, the original Ethereum network, which did not undergo the hard fork, continued to exist and became known as Ethereum Classic (ETC). Ethereum Classic embarked on a separate path and has continued to operate as an independent platform with its own unique features and community to this day.

The DAO Hack

DAO, or Decentralized Autonomous Organization, was an innovative concept that allowed investors and entrepreneurs to invest in various projects and easily withdraw their shares in case of success.

The DAO was an example of such organizations that operated on the Ethereum blockchain using smart contracts. This platform, in 2016, became one of the largest crowdfunding investments in history by raising over 12.7 million Ether (approximately $150 million at the time).

How DAO Worked:

Individuals joined this organization by purchasing DAO tokens using Ether. These tokens were used for voting to select decentralized applications (DApps). Projects that attracted more than 20% of DAO community support could receive loans from the DAO investment fund.

Challenges and the DAO Hack:

Despite its numerous advantages, DAO faced challenges that ultimately led to its demise. One of the biggest weaknesses of this system was its vulnerability to criticism. This feature allowed investors to cancel their support for a particular project and withdraw their capital (in Ether). Capital withdrawal was possible up to 28 days after canceling support, during which the capital was transferred to a subsidiary DAO. During this period, the investment ledger was updated, and everyone was satisfied with the outcome until the DAO smart contract was hacked. Ultimately, the DAO smart contract hack dealt the final blow to this organization.

How does Ethereum Classic work?

As mentioned, the primary goal of launching the Ethereum Classic project was to set up smart contracts and create decentralized software. The network system is designed in a way that smart contracts are automatically executed after meeting the conditions set by both parties. In this regard, Ethereum and Ethereum Classic have similar functionalities, and the developers of Ethereum Classic are still making necessary changes to the network.

Despite significant advancements in the world of technology, some individuals still believe that the performance of a computer cannot exceed that of a Turing machine, which simulates various algorithms on central processing units. However, the founders of Ethereum Classic have a different perspective. They believe that smart contracts will soon handle many administrative and banking tasks such as file management, employee insurance, identity verification, and more.

Therefore, it can be concluded that members of the Ethereum Classic team, utilizing blockchain technology, provide remote financial and banking services to users. Ultimately, they aim to reach a position where people worldwide can set up and execute their smart contracts using Ethereum Classic digital currency.

Advantages of Ethereum Classic:

Ethereum Classic (ETC), often overshadowed by Ethereum (ETH), is a blockchain-based platform with its unique features that make it an attractive option for investors and developers.

Here are some of the key advantages of Ethereum Classic:

1. Stability and Security:

Ethereum Classic achieves stability and security through the Proof of Work (PoW) mechanism. This process requires miners to solve complex mathematical equations to validate transactions and add new blocks to the blockchain. It provides high protection against hacking and fraud, making transaction alterations or cancellations impossible.

2. Decentralization and Freedom:

As a decentralized platform, ETC does not adhere to the oversight and control of any institution or government. This allows users complete freedom in conducting transactions and managing their assets.

3. Speed and Low Fees:

Transactions on the ETC network are processed quickly and with low fees. This makes ETC an efficient tool for conducting payments and exchanges.

4. Credibility and History:

Ethereum Classic emerged from the Ethereum hard fork in 2016 and has since continued its operations as an independent platform. With its proven track record, ETC has attracted a loyal user community.

5. Dynamism and Innovation:

ETC has an active developer community that is constantly upgrading the network and creating new decentralized applications (dApps). This commitment to innovation makes ETC an attractive platform for developers and users.

6. Compatibility:

ETC is compatible with many tools and infrastructures available in Ethereum, such as wallets and exchanges. This allows ETC users to easily utilize these tools for managing and exchanging their assets.

In addition to the mentioned advantages, Ethereum Classic has high growth potential. With its smaller market value compared to Ethereum, ETC has more room for long-term growth.

Disadvantages of Ethereum Classic:

While Ethereum Classic offers significant advantages such as stability, decentralization, and low fees, it also faces challenges that should be considered before investing:

1. Lack of Developer Support:

Following the 2016 hard fork, the core Ethereum team abandoned ETC development and focused on Ethereum (ETH). This could signify a lack of innovation and key advancements in ETC compared to ETH.

2. History of Hacks:

In 2016, ETC experienced a major hack resulting in the theft of millions of dollars from users' funds. This event has raised concerns about the security of the network.

3. Limited Acceptance:

Compared to ETH, ETC has less acceptance on exchanges, wallets, and dApps. This could limit liquidity and ease of use for users and developers.

4. Centralized Mining Activity:

Ethereum Classic is predominantly mined by a limited number of large miners. This can increase power concentration in the network and make it more vulnerable to attacks.

It's important to carefully weigh these disadvantages alongside the advantages before making investment decisions in Ethereum Classic.

Conclusion:

The future of Ethereum Classic is fraught with uncertainties, as Ethereum is considered a more legitimate network, especially given the security issues that Ethereum Classic has been grappling with. Over time, investors have lost confidence in Ethereum Classic (ETC) due to system hacks. If ETC fails to improve its code and software to prevent future hacks, it will likely face more challenges. However, it remains to be seen how smart contracts will develop within the Ethereum Classic project and whether they can be utilized for large-scale applications.