Ethereum Classic (ETC) is one of the oldest and most tried-and-true altcoins on the market. If you do not know what is Ethereum Classic and whether it is good to invest, reading this article can help you to understand. Ethereum Classic is a smart contract platform and cryptocurrency. We explore its history and why it broke with Ethereum in 2016.
What is Ethereum Classic?
Ethereum Classic (ETC) is an open-source, decentralized, blockchain-based distributed cryptocurrency platform that runs smart contracts. Ethereum Classic was founded in 2016 as a result of the hack of The DAO, a smart contract running on the Ethereum blockchain. The original blockchain split in two, with most users opting to reverse the hack and return the stolen funds.
In 2016, German startup Slock.it launched its DAO project on Ethereum, dubbed "The DAO". While the project raised more than $150 million in crowdfunding, hackers exploited a vulnerability in its smart contract, stealing $50 million in the process. To restore funds, most Ethereum users, including founders Vitalik Buterin and Gavin Wood, support a radical change to the blockchain's underlying protocol or hard fork. This led to the formation of the new Ethereum (ETH) chain.
However, some communities are still opposed to forks, opting instead to stick to the "code is law" principle. Asserting that blockchains cannot be bent according to human thinking, they stayed on the old chain and renamed it to Ethereum Classic (ETC).
How does Ethereum Classic work?
Ethereum Classic is very similar to Ethereum. It relies on a blockchain, which is designed not only to replace payments, but to create smart contracts and applications that users can own, transfer ownership of, and interact with. Allowing a Turing-complete programming language means that developers can write automated applications that can be supervised by conditional results.
Like all other blockchains, it maintains a complete transaction history in a shared database. Additionally, it records the latest status and user balances of all smart contracts powered by the blockchain, which can be transferred digitally to another user's wallet. All activity is powered by ERC-20 tokens that can be mined through a proof-of-work process. It will not receive the ETH 2.0 update due to the split.
Ethereum also uses Proof of Stake (PoS) consensus and is currently transitioning to using that protocol only.
Is Ethereum Classic good for investment?
Due to the Ethereum Merge, we cannot say it is a good investment or not completely. While Ethereum Classic may not be as popular as Ethereum, according to many blockchain experts, ETC is a good investment. Ethereum and Ethereum Classic are very similar, but ETC has some important advantages. On top of that, Ethereum Classic has a fixed total supply, which means it is deflationary just like Bitcoin. Because of this, the price of Ethereum Classic is likely to continue to grow for the foreseeable future.
I hope now you know what is Ethereum Classic and whether it is good to invest in or not. When Ethereum launched a hard fork, it took away most of the key influencers. This includes the Enterprise Ethereum Alliance, which is made up of large companies like Microsoft that want to increase Ethereum adoption.
