In this article, you will learn Ethereum Classic: what is Ethereum Classic used for. Ethereum Classic was formed in 2016 as a result of a hack of The DAO, a smart contract operating on the Ethereum blockchain. The original blockchain was split in two, with the majority of users choosing to reverse the hack and return the stolen funds.
Although both ETH and ETC networks offer smart contracts, the potential for the security concerns surrounding ETC will likely push investors to invest in ETH and adopt Ethereum's smart contracts versus those of Ethereum's Classic.
What is Ethereum Classic?
Ethereum Classic (ETC) is a decentralized, blockchain-based, open-source computing platform, as well as a cryptocurrency. It allows developers to build and deploy smart contracts—autonomous, self-executing code blocks that trigger certain actions based on predefined conditions .
The ETC network is permissionless, meaning that anyone can join and execute transactions, as long as they have a compatible crypto wallet. It was formed in 2016, due to an ideological and technical split within the Ethereum community, following the infamous DAO attack.
The Birth of Ethereum Classic
Using smart contracts, it is possible to build a Decentralized Autonomous Organization or DAO on Ethereum. In simple terms, the governance and decision-making approach of a DAO is codified and doesn't require human interventions, so to say.
In 2016, the German startup Slock. it launched its DAO project on Ethereum, known as "The DAO". While the project raised over $150 million in crowdfunding, hackers exploited a loophole in its smart contract, stealing $50 million in the process. In order to restore the funds, most Ethereum users—including founders Vitalik Buterin and Gavin Wood—supported a radical change in the blockchain's base protocol or a hard fork. This resulted in the formation of the new Ethereum (ETH) chain.
However, a section of the community remained opposed to the fork, choosing instead to stand by the principle of “Code is Law”. Asserting that blockchains cannot be bent according to human whims, they remained on the old chain and renamed it as Ethereum Classic (ETC).
Since Ethereum Classic preserves the old code of the Ethereum blockchain as it was until the DAO attack, it is often regarded as the “original” Ethereum crypto.
What is Ethereum Classic used for?
- The ETC or Ethereum Classic asset is primarily used to pay for decentralized computations on the Ethereum network.
- ETC used to pay for executing transactions and smart contract functions on the Ethereum Blockchain. This is referred to as gas, and the fee associated with these actions are known as GAS costs.
- ETC is also a native token with a monetary policy that creates a predictable, disinflationary emission schedule with a fixed market supply cap.
Future of Ethereum Classic
The future of Ethereum Classic looks less bright than Ethereum since Ethereum is considered the more legitimate of the two networks, especially with the security concerns of Ethereum Classic.
Investors have lost confidence in ETC over the years due to hacks into the system, and until ETC can redevelop its code and software to prevent future hacks, Ethereum Classic may have challenges ahead. However, it remains to be seen how the smart contracts will be developed within the Ethereum Classic project and whether they can be adopted for widespread use.
Goals of Ethereum Classic
Since the split, there have been many upgrades and improvements to the Ethereum Classic project. The goal of the project continues to be working toward becoming a global payment network using smart contracts that can function without centralized governance.
As with other cryptocurrencies, Ethereum Classic will likely continue to strive to be a digital store of value, meaning it can be saved and exchanged while retaining its value. The digital store of value for crypto includes its purchasing power that can be quickly turned into cash or used to buy another asset, similar to money.
Bottom Line
But on the daily chart, ETC's price surged 14.5% to nearly $37.25 per token. Its massive gains came days after BTC.com, a blockchain explorer and crypto mining pool, launched a specialized Ethereum Classic pool with "zero-fee" mining for three months. So, knowing Ethereum Classic : what is Ethereum Classic used for might help you with your crypto basic knowledge.
