Crypto Types
Learn about Ethereum and Ethereum Classic, their origins, differences, and shared goals in blockchain technology.
Ethereum and Ethereum Classic split due to a disagreement over reversing the DAO hack, leading to distinct paths.
Ethereum has evolved with updates for scalability, while Ethereum Classic maintains its original structure and capped supply.
Ethereum uses proof-of-stake for efficiency, while Ethereum Classic continues with proof-of-work, requiring more energy.
In the world of cryptocurrency, Ethereum and Ethereum Classic stand out as two prominent platforms with a shared origin. Both emerged from the same blockchain but have since taken different paths. Understanding their evolution and differences is essential for anyone interested in blockchain technology.
Ethereum and Ethereum Classic both started from a common blockchain. However, a significant event, known as the DAO attack, led to their separation. This lesson will explore their origins, differences, and the unique features that define each platform.
Ethereum launched in 2015 as a platform designed to support decentralized applications. Its goal was to offer a flexible environment where developers could build applications using smart contracts. However, in 2016, the DAO, a decentralized organization built on Ethereum, was hacked, resulting in a significant loss of funds.
To address the hack, Ethereum's developers decided to implement a hard fork, effectively reversing the hack and creating a new version of the blockchain. This decision led to a split: those who agreed with the fork continued with Ethereum (ETH), while those who opposed altering the blockchain's history continued with the original version, now called Ethereum Classic (ETC).
This split was not only technical but also ideological. Ethereum Classic supporters valued the immutability of the blockchain, meaning once data is recorded, it should not be altered. This principle set the two platforms on different paths.
Over time, Ethereum and Ethereum Classic have developed distinct technical characteristics. Ethereum has undergone numerous updates, enhancing its ability to handle more transactions per second. This scalability makes it suitable for a wide range of applications, including NFTs (non-fungible tokens) and DeFi (decentralized finance).
Another difference lies in their monetary policies. Ethereum does not have a capped supply, allowing for the continuous creation of new ETH coins. In contrast, Ethereum Classic has a fixed supply cap of 210,700,000 coins, similar to Bitcoin, which aims to create scarcity.
One of the key differences between the two platforms is their consensus mechanisms, which are methods used to validate transactions and secure the network. Ethereum has transitioned to a proof-of-stake (PoS) system, where validators lock up their cryptocurrency to validate transactions. This approach is more energy-efficient compared to traditional methods.
Ethereum Classic, however, continues to use the original proof-of-work (PoW) system. In PoW, miners use computational power to solve complex mathematical problems, validating transactions and earning cryptocurrency in return. This method requires significant energy consumption.
In terms of market position, Ethereum ranks as the second-largest cryptocurrency by market capitalization, surpassed only by Bitcoin. Its wide popularity and adoption contribute to its high price, often exceeding $1,000 per coin. Ethereum Classic, while active, has a lower market capitalization and price, generally ranging from $20 to $50 per coin.
The price difference reflects the level of adoption and development activity on each platform. Ethereum's larger community and developer support play a significant role in its higher valuation.
Despite their differences, Ethereum and Ethereum Classic share a common purpose: providing a platform for developers to build decentralized applications. Both networks support smart contracts, which are self-executing contracts with terms written directly into code.
The divergence in their paths has led to distinct communities, yet both continue to attract developers and innovators interested in blockchain technology. The choice between the two often depends on one's values regarding decentralization, immutability, and technological preferences.
This lesson was rewritten by Prison Professors for educational use, inspired by Binance Academy. The original article remains the property of its authors.
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