Ethereum Classic came to birth as a “hard fork” out of the Ethereum blockchain created by Vitalik Buterin in 2016. You can say it’s the original chain which Ethereum has started upon. Reason for this hard fork was the DAO hack and collapse which divided the Ethereum community.
Ethereum Classic is the original Ethereum Blockchain and is supported by people who want immutability of code. Once a Blockchain has been created the code shouldn’t be changed anymore or like they say “code is law”. Even after the launch of the DAO project where someone exploited DAO vulnerabilities, the necessity of a hard fork was denied.
Ethereum Classic is the original and unchanged Ethereum Blockchain since that accident with the DAO in 2016. Like their famous big brother, they also provide smart-contracts and development platform. This platform facilitates building DAPPS(decentralized applications). Currently, the ETC development team uses the platform to focus on Internet of Things and machine-to-machine communication. So with all the recent turmoil in the markets like the 51% hack most recently, why is Ethereum Classic still alive?
Difference between Ethereum and Ethereum Classic
As of writing Ethereum Classic stands at $5,73 per coin (according to CoinMaketCap). Let’s take a look at what the graph looks like:
The market cap for ETC currently stands at a little over $0.5 billion and is currently the ranked 21h as cryptocurrency in the world. Among traders the coin is still quite popular and has seen an impressive rally since the beginning of April. If you are interested in buying ETC you can do this on Binance here.
Since the split, after the DAO incident, both chains continued with their own updates. Gavin Wood and Vitalik Buterin choose to join the chain which is called Ethereum today. One of the main differences in both chains is the monetary policy. ETH, the coin of Ethereum, has an uncapped supply of coins and is therefore inflationary. ETC, the coin of Ethereum Classic, has a caped issuance of 230 million coins.
The block reward for ETC will be reduced by 20% at block number 5,000,000, and another 20% every 5,000,000 blocks thereafter. The total supply is expected to be somewhere around 210 million ETC, but not exceeding 230 million ETC.
While Ethereum is planning to move to another mining algorithm called ‘Proof of Stake’, Ethereum Classic remains at ‘Proof of Work’. One can say that unless their shared history and code base(Solidity), the future has different paths for both chains.
How is Ethereum Classic special vs. Ethereum
Despite the underlying shared code base and technology, Ethereum Classic has its own plans for the future compared to Ethereum. Other bigger Blockchain projects like EOS, TRON or NEO are trying to compete with Ethereum based on functionality, but ETC has chosen its own destiny.
The main focus of Ethereum Classic is the Internet of Things. I know this is also a futuristic word but let me explain this in more detail. Tesla another futuristic company is experimenting with self-driven cars. The idea of ETC is to add economic value to this kind of developments by making machine-to-machine trades possible in the near future. This is completely different compared with Ethereum. Their main goal seems to deliver smart-contracts to the entire crypto space with financial tokens and ICO’s.
What ETC aims to become is a cryptocurrency which enables all devices connected to the internet. These devices can trade or deliver value to each other by smart-contracts. A lot of development is going on in this field and Ethereum Classic could be the platform go to. In the near future, we might ask Siri to send a tip to a waiter or program a smart contract for the fridge which orders beer when the store runs out.
Another important difference is the way both projects handle scalability. Like I explained earlier in this article, Ethereum is planning to move to “Proof of Stake” technology to handle scalability issues. Ethereum Classic can’t change this, because then they have to another fork on the chain. This is against their philosophical principles. Instead, to handle scalability, they choose for a “side chain” solution. The Lightning-network which handles the scalability issue on the Bitcoin Blockchain is also a very good solution in this.
What’s up with Barry Silbert? This is the person who is known as the main ‘Shiller on Twitter’ behind ETC after the fork in 2016. Barry Silbert is the founder of Digital Currency Group and has invested big in this Blockchain project. He has been a fan of the ETC chain since the early days according to Donald McIntyre in an interview with CryptoInsider. Donald McIntyre is the head Marketer at the Ethereum Classic project and has a very close relationship with Barry Silbert from the start. In the early days, he and Barry Silbert used to have several discussions about ETC on Twitter. Silbert is very charmed of the ‘Turing-complete’ property of this Blockchain and also the philosophical approach the team has according to immutability and security. In February 2019, Barry Silbert announced on Twitter that Grayscale Investments has $24 million current holdings in Ethereum Classic project. Grayscale Investments which is part of Digital Currency group has 8 crypto funds in his portfolio. With holdings in Bitcoin at $999 million, Ethereum Classic comes second with $24 million current holdings.
Grayscale Investments launched an ETC-ETF which brings in money from ‘Wall Street’ and with his relations and support, Barry Silbert is one of the key drivers behind this Blockchain project.
Another party which sees a lot of potential in this project is ETC Lab. They are an investment group based in San Francisco and are funding start-ups which are Blockchain related. Ethereum Classic fits perfectly in their investment planning. They are funding start-ups which want to build a DAPP(decentralized application) on the ETC-blockchain. According to their website, their goal in 2019 is to fund between 20 and 24 projects on the chain. The initial investment would be 150K, but can add up depending on results. Despite money pouring in from different directions, Barry Silbert remains the ‘Big Whale’ as an investor and has positive net influence in the whole system.
The ETC Labs aims to create network collaborators, investors and supporters. They offer access to shared office space, developer support, and funding their new ideas. They really want to create new projects and bring them to the next level. Currently, 11 startups are selected in their mentoring process. Also, key developers from the community will work there and if needed they will give technical support or advice. This mix of developers and investors working together should give a positive boost to the ETC community as a whole.
A few of the promising start-up projects on the chain will be explained below.
Anylog comes with a protocol implementation on the ETC Blockchain. This decentralized peer-to-peer network allows users to store, share, query and monetize IoT data. These actions are allowed without relying on a centralized authority.
Button wallet comes with a secured wallet in messengers. Their focus lies on digital asset management and is not only targeted at a crypto enthusiastic audience. Their focus is there for mass adoption.
The Cryzen trading platform lets users develop arbitrary trading algorithms through an online bot development environment. Users can write, back-test, and deploy custom trading bots using Python, or tweak, back-test, and deploy template strategies (e.g., arbitrage, momentum, etc.) through a simplified UI that requires no coding experience.
Ethernode is deploying arrays of nodes utilizing IPFS for streaming services. IPFS will be used for fast chain data bootstrapping and maintaining high levels of server up-times. Also load balancing will be used to keep the availability high. Deployment of the nodes will be done in arrays of docker containers. User can setup their nodes off-chain(POA) to securely and privately network personal IoT devices.
Monetizr is a simple SDK solution that is added to mobile games. The developers of this project are collaborating with game developers. Their goal is to incentivize millions of gamers for time, skills, and money to play the game online or in real-life. It’s a game developed for mobile phones and one can use or gain tokens while playing. These tokens have real value and can also be used to buy game-related merchandise or even cryptocurencies.
OriginalMy uses Blockchain for solving bad bureaucracy by creating a public, decentralized, immutable and verifiable proof of authenticity for identities, digital documents, and electronic signatures.
The world’s most dynamic digital collectible experience creating the future of digital ownership, Play Exchange is redefining the meaning of collectibles. They are no longer static things you simply look at. The startup’s high-end, rare and exclusive collectibles are stories, adventures, and experiences that grow every day creating more value, but most importantly, creating more fun.
The new gold standard for emotional visual communication formats in AR, Scanta enables users to customize, collect, trade, buy and sell AR Avatars on the Blockchain.
Statwig is blockchain startup that uses the Internet of Things (IoT) to record the journey of products across the supply chain. This journey goes from manufacturer to customer and is creating an extra layer of visibility and authenticity.
A decentralized universe of 3D characters for VR/AR, gaming, and content creation, at VREX Lab you can buy, sell, or breed one-of-a- kind characters that you can use in games, your YouTube channel, Instagram stories, and more.
In the past, the Bitcoin Blockchain has suffered many forks(44 in total!) and good example are BCH, BTG, Bitcoin Diamond and others. A lot of these project are more or less ‘zombie’ projects with very few developments currently going on. Ethereum Classic is the original chain which Ethereum has forked and continued to work on. Although the community of ETC is much smaller compared to its big brother Ethereum, I can see a bright future for this project if they continue to walk the path of their own philosophy.