In this article, I will make a comparison between Ethereum and Ethereum Classic, their main differences, and the main characteristics that define them.
Both projects originated from the identical blockchain, which was split into two different chains after the hard fork in 2016. This split also divided their team into two groups. The first one we now know as Ethereum is led by Vitalik Buterin and the second one known as Ethereum Classic is led by several other original team members.
The beginning
First of all, at the beginning of the project in 2013, Vitalik Buterin and his teammates made a plan to produce a decentralized, community-driven open-access blockchain with the potential to grow the crypto universe we know today. This crypto project and its blockchain went live in 2015 and after a year of being online one of the projects built on their network suffered a hack where it lost around 600 million $ worth of crypto.
This was a hard punch to this, still young project at that moment and it happened through the so-called “The DAO” crowdfunding project built on the Ethereum blockchain. The project was intended to connect people worldwide and offer them the option of sharing their physical assets like cars, houses, and other possessions on a decentralized marketplace, which got tremendous traction in the community.
This DAO succeeded in rising more than 150 million $ worth of ETH from investors worldwide but because of the glitches in the code, funds got exposed and exploited by hackers who stole around 3.6 million ETH, roughly 10% of circulating coins at that moment.
This hack triggered the split because Vitalik didn’t want to make peace with it, so he wanted to roll back a blockchain and delete this transaction, while some other teammates wanted to preserve the so-called “Code is Law” principle. They (rightfully IMO) argued that Vitalik’s intentions could undermine the trust in their blockchain because it isn’t 100% bulletproof if anyone can roll it back and they just didn’t want to accept this option.
The ETC team led by an anonymous person with the pseudonym Arvicco decided to stay with the original blockchain now known as the Ethereum Classic, where the record of this hack still exists and Vitalik split to a new chain, rolled back to the moment before the hack, which is from that moment known as Ethereum with ETH token.
From the 1,920,000th block of the original blockchain, the chain split into two different chains and in some parts different projects. As you can guess, big investors, especially those who lost big money in a hack stayed with Vitalik and hardcore crypto enthusiasts who believe in the undisputed law of code stayed with Arvicco and his team which represents Ethereum Classic.
The hard fork of the main Ethereum network:
From this moment in history, ETH and ETC have been divided into two, incompatible blockchains.
Ethereum
Ethereum become the second biggest crypto project in the world by market capitalization, but from the point of view of many crypto enthusiasts, it is the most important. The reason for this lies in the fact that ETH was used to develop the huge majority of crypto projects known today and also the most important NFTs in the world.
Although ETH has approximately half the market cap in comparison to BTC its network is numerous times more used. The only weak spot of the Ethereum project was the PoW consensus, which was a big power spender and very expensive. That’s because the mining rigs were spending a huge amount of power and transaction fees on their network were huge.
The team led by Vitalik charted their course in 2020 and on the 15th of September 2022, they made a so-called “Merge” to evolve their blockchain security from PoW to PoS to resolve this weak spot. Ethereum as an open-access decentralized project stays the most important platform for building the crypto universe, and the ETH with no doubt will remain one of the most popular blue chips in the crypto community, with a very bright future ahead.
One of the most marvelous features of the Ethereum project is its token burn mechanism which made ETH a deflationary coin. In short, after August 2021 and the so-called London update, this project started to burn some amount of ETH on every transaction made on their network. This feature, considering the huge traffic on this network, burns more coins than new ones are released, which made the ETH supply goes down as traffic rises up. Although after the Merge and crossing from PoW to PoS transactions amount was temporarily reduced and supply went positive for some time, it went deflationary again a few days back.
With this process, the ETH becomes the first asset with deflation, in comparison to BTC or gold which are both inflating over time, and you can imagine how this will reflect in the price over time.
The network is planned to have several upgrades over the years. It is almost like an infinite system, that keeps evolving and improving. Recently Vitalik shared with the crypto community an updated roadmap and you can check it here for more details. From the point of useability, it is for sure the biggest crypto project so far.
Multiple projects of high quality are developed on the Ethereum network, and I will mention a couple of the best of them.
One of the most important is for sure the Compound. It is a DeFi borrowing and lending platform and represents a competitive crypto solution against the traditional money market. This project found a safe and secure way to connect lenders and borrowers in a mutual interest, where landers can earn much higher APRs in comparison to the traditional money market, and borrowers can take loans with much lower fees. Therefore, it isn’t too strange it got very big traction in the crypto community, with more than 2.2 billion $ in circulation.
Another important project developed on this network is for sure Uniswap, one of the biggest decentralized exchanges in the world. This DEX offers several different features, direct trade between two parties via smart contracts (swapping), earning true liquidity providing, staking your assets in their pools, etc. Uniswap earned huge popularity in the crypto community with its user-friendly interface, connectivity with multiple different wallets, and several solid options for passive income. This project stands for the tip of the spear of DeFi and with its continuous evolution, it stays on top of the competition.
Ethereum Classic
Ethereum Classic is also an open-access, decentralized, community-driven crypto platform with smart contracts, but it has much fewer projects developed and its useability and potential are far behind its sibling ETH. The main reason for this is as I mentioned the monetization path which Vitalik has chosen, compared to the real enthusiastic, hard-core decentralization path Arvicco and his team chose.
This choice made Ethereum Classic a trustworthy project with much greater certainty in the consistency of its blockchain, but with much less potential big money investors. This insistence on code is law policy brought more trust by the real believers in decentralization in comparison to ETH, but with less money inflow for now.
Although I don’t believe in miracles, there is one more possibility for the ETC to split from general market diagrams. IMO, the mining community could push this neglected project back under the spotlight after the end of the ETH mining saga. This opinion isn’t very well accepted by the crypto community, mainly because the majority of the crypto community doesn’t like to give so much credit to the mining community, but I believe that more usage of ETC (through mining, more trading, pumping transactions volume, etc) could push this coins price up in comparison to other coins.
ETC is a coin with limited supply, just like BTC, which in the time to come might become a price push feature. Its supply is fixed to 210 700 000 coins, and with a huge mining hash power rise, after the Merge, these coins will be mined much sooner than was planned. This is another important moment to consider in the long-term ETC price prediction process.
On Ethereum Classic we also have some solid projects developed.
I would pick the Novanetwork DeFi platform which offers all the services like other DEXes, but with some more, special features as they claim. Their team claims that they achieved compatibility with next-generation fNFTs, AMM (automatic matchmaking), multi-transfer, and other exclusive tools. This open-source platform also offers regular DeFi services like staking, lending-borrowing, etc. The project has its own native token, the SNT, which in some crypto circles is considered a coin with solid potential in the future.
Another one I picked is the Multichain, the cross-chain router protocol for WEB3. This decentralized project covers more than 70 chains and as they claim offers no-slippage swapping, with 1:1 multichain swap with eliminated hidden costs connected to AMM. If it works as proclaimed, this means you can send any of the 3015 included different tokens via Multichain protocol to any of these 70 chains with near-zero fees. This even sounds too good to be true and time will show how it works.
Conclusion
There are so many similarities between Ethereum and Ethereum Classic, but also so many differences. I hope this article made these important points clearer and easier to understand. One is sure, both projects survived some very hard times and I believe both of them will find their spot in the new, decentralized world that crypto is preparing for us.
From my point of view, there is no doubt about which project is more successful, but that doesn’t mean ETC is doomed and it has no potential for further development. My opinion is that we are still going to see much more from both projects. What do you think?