Ethereum Classic Course - ETC
Quotes Ethereum Classic ETC for today.
Formally, the separation between Ethereum (ETH) and Ethereum Classic (ETC) was due to disagreement in views on changes in the blockchain. But it was only a catalyst that revealed deeper problems. One of the main stumbling blocks has become a way to achieve consensus on the network.
Ethereum Classic supported Proof-of-Work, the main place in which miners occupy. It is they who provide "true decentralization," argued his supporters. Cryptocurrency even recently held a hard fork to preserve the consensus algorithm and rid the network of the so-called “complexity bomb”.
In turn, ETH also stands its ground and plans to move to a new consensus - Proof-of-Stake, in which miners are simply not needed. The system is supported by stakeholders confirming transactions using "crypto deposits."
In 2018, cryptocurrencies took several crucial steps because of which they became even more distinct from each other.
The consensus debate on the Ethereum network began long before the cryptocurrency split. But the root cause of the "divorce" was a completely different event.
In April 2016, on the basis of the Ethereum blockchain, then still a single cryptocurrency, the DAO - Decentralized Autonomous Organization appeared. Its main purpose was to collect and distribute money for various crowdfunding projects. In fact, it was a protocol that worked according to previously laid down rules, and allowed choosing startups for investments by universal voting of the system participants.
DAO worked on smart contracts. Before fulfilling its role as an impartial investor, the DAO conducted an ICO. Everyone who invested in it received a token. With its help, the holder could vote for providing money to one or another project.
This ICO was incredibly popular. More than 11,000 investors invested over $ 150 million (15% of all tokens in circulation at that time) in the DAO. This has become the largest crowdfunding in history. Even rumors of errors in the code of the Organization did not deter investors.
The creators of the Organization were so careless and confident in their success that they kept all the money in only one wallet.
After raising funds, a cyber attack happened. Hackers managed to move 3.6 million tokens into what is called a child DAO. In its structure, the child DAO was like the original Organization. She also adopted the restrictions. For example, money placed in a child DAO could not be obtained within 28 days.
It was this time limit that gave society time to think about further actions.
Here, the Ethereum Foundation, led by Vitalik Buterin, spoke. She proposed to fork the blockchain and rewrite the transaction history in order to leave attackers with a “nose”. But the final decision, the Ethereum Foundation provided to the users themselves.
This “rewriting” caused a lot of controversy. The blockchain was created so that no one could change the data in it. This is the foundation of system security. Many participants believed that such a move would create a dangerous precedent that would ultimately destroy cryptocurrency. After all, if you once depart from the rules, then in the future you will have to constantly change the principles.
Moreover, disagreement over consensus emerged. If at that time Ethereum worked on the Proof-of-Stake system, and hackers got 15% of all coins, they would have gained a huge influence on the whole system. This became the "trump card" in the hands of opponents of the transition to a new algorithm.
After long and intense discussions, the Ethereum Foundation held a hard fork, which resulted in ETH.
Those who did not agree with him remained “their own” and continued to maintain the original chain, changing its name to Ethereum Classic. This is the cryptocurrency that still works on the original rules of the network and adheres to the Proof-of-Work consensus.
Bombs and deposits
In the original code of Ethereum, even before it split, a bomb was planted. Its main purpose was to increase the complexity of mining with increasing emissions. Now, in the block under the number 5,900,000 she was discharged.
“The complexity bomb should have been removed at least so that at some point the ETC blockchain does not stop,” says Andrei Sobol, a blockchain expert and one of the developers of Satoshi Fund.
According to the developers of ETC, the bomb made mining almost unprofitable, which increased the time spent on mining the block.
True, hardly anyone was mining without profit. “If this business were not profitable, no new blocks would appear in the ETC,” says Andrei Sobol.
In any case, such a decision will not greatly affect the total number of ETCs in circulation. Ethereum Classic provides emission reductions. Every million blocks, it is reduced by 20%, which resembles the principle of Bitcoin.
“Yes, the abolition of the complexity bomb will accelerate the generation of blocks. But the ETC is endless, since in addition to new coins, miners also receive gas fees (in bitcoin, the analogue is the transaction fee), ”says Andrei Sobol.
The changes were painless. ETC nodes, miners, exchanges and pools supported this decision - after all, it has been prepared since 2016. So the crypto enthusiasts had enough time to discuss all the problems and prepare for the fork.
Moreover, the developers followed their own set of principles - the Ethereum Classic Declaration of Independence, which appeared during the split of cryptocurrency. According to it, a fork of the network can only take place to improve or update the blockchain, which happened.
Such a solution reinforces the differences in vision for the future of Ethereum Classic and Ethereum. The classic version takes a conservative view of the principle by which consensus should be achieved in the system - Proof-of-Work. According to him, the miners become the cornerstone of the system. They get blocks, confirm transactions and, of course, receive a reward for this. Therefore, the neutralization of the “bomb” is support not only for miners, but also for the general intended course.
ETH now also works on this principle. But the community has long been pushing the switch to another protocol - Proof-of-Stake. In it, the central place is held by the holders of the share. The larger the share, the greater the stakeholder's influence on the system. Stakeholders take over the duties of miners, and also confirm transactions, for which they receive a reward. The difference is that Proof-of-Stake does not need huge capacities to mine blocks. It’s enough to just have ETH and almost always keep the computer turned on.
More recently, ETH has also taken an impressive step towards implementing this system. In April, Vitalik Buterin introduced a new protocol - Casper. This hybrid version of the future consensus should show how Ethereum will exist in the future.
The hybrid will work like this: miners confirm most of the transactions. Stakeholders - checkpoints on the blockchain. To become a stakeholder you need to put as much as a permanent deposit - 1500 ETH or more than $ 1 million. This amount is chosen to protect the system from DDos attacks and unscrupulous stakeholders. After all, if they break the rules or try to harm the system, their deposit will “melt”.
In the future, the size of the deposit may be reduced to 32 ETH. If the investor does not have such money, he will be able to enter the pool, which works on the same principle as the miners.
Ethereum Classic (ETC) is an “authentic” ethereum, often referred to simply as a classic. This cryptocurrency is consistently included in the top 20 of market capitalization and positions itself as an antagonist of the usual ETH (Ethereum).
It arose as a result of one of the largest hacker scandals in the history of cryptocurrencies in the summer of 2016 - the abduction of part of the investment of The DAO project. After a split in the Ethereum community, two camps appeared. And although ETH received the support of the founder Vitalik Buterin and became the reason for the 2016-17 cryptocurrency boom, ETC still remains an interesting project with its own ideology and prospects. And in this article we will talk in more detail about the features of Ethereum Classic.
History and Key Features
Ethereum Classic cryptocurrency arose on July 20, 2016 as a result of the Ethereum network hard fork. The fork in the network was dictated by the theft of 3.6 million ethers (over $ 50 million at that time) from the investment fund of The DAO project, a decentralized autonomous organization. This startup was a venture fund, the participants of which could choose new investment goals by voting. In total, The DAO managed to raise $ 156 million in investments.
The Ethereum Foundation has proposed “rolling back” the Ethereum blockchain, which would allow the return of stolen funds. However, not all community members agreed with this idea, because hard fork violated one of the principles of the Ethereum Foundation and cryptocurrencies: “about the supremacy and immutability of the code”; and also meant the actual centralization of the network. Therefore, part of the Ethereum community refused to “roll back” and continued to use the old version of the blockchain. The branching happened at 1920000 block.
ETC managed to become the headliner of the cryptocurrency market in the first months after its formation. In the two weeks since the hard fork, new airs have already been traded on the Poloniex, Bitfinex, Kraken, BTC-e exchanges, and have also been added for mining by the large MinerGate pool. In contrast to the support of Charles Hoskinson and Gavin Wood, the owner of a large pool, Chandler Guo, promised to conduct a 51% attack on the Ethereum Classic network, but did not receive support in this endeavor. And on August 11, 2016, the ETC community published the “Declaration of Independence”, in which several basic principles were announced:
- Code supremacy;
- The network should be used to develop decentralized applications on smart contracts;
- Any changes, soft forks and hard forks are carried out solely to improve the protocol;
- The platform is open to anyone who agrees with the principles of the decentralized ETC protocol.
In October 2016, the Ethereum Classic hard fork was produced in order to optimize the code, improve the transaction mechanism and save time to overcome the so-called “complexity bomb”. An additional fork at the beginning of 2017 partially solved the problems with the network load.
In 2017-2018, several more hard forks took place on the network, with the ultimate goal of improving the Proof of Work consensus algorithm and improving network security. Mechanisms of protection against double spending were added, the ground was created for the development of sidechains.
Technical Features, Pros and Cons of ETC
Ethereum Classic is an open source platform that contains tools for developing decentralized applications based on smart contracts that are executed when a certain condition is met. Her heart is an EVM virtual machine - the Sputnik Virtual Machine, which uses the Turing abstract algorithm.
Specially for developers, the SDK - Emerald Software Development Kit, which contains various UI components, frameworks and developer tools, has been compiled. The programming environment is Geth, which is a universal command line in Go.
Consensus Algorithm - Proof of Work. Initially, the Ethereum Classic issue did not have a ceiling. However, as a result of the hard fork, on December 11, 2017, a hard cap was installed - 210 million coins. Bitcoin has a similar emission ceiling. The main token is Ether Classic. In internal transactions, gas is used, which determines the transfer commission, which is distributed between the miners, and protects the network from spam.
In 2018, the first Ethereum Classic sidechain project, Callisto Network, was implemented. All ETC coin holders received Caliisto tokens (CLA) in a 1: 1 ratio to the classics. It also plans to integrate cross-platform transactions and the development of the DEX project. All key innovations come from the IOHK group, which is led by Charles Hoskinson.
Ethereum Classic vs Ethereum Comparison
Ethereum and Ethereum Classic have both similarities and differences. Since ETC is, in fact, the heir to the original protocol of Ethereum, it retained many of the technical features of the progenitor.
Like Ethereum, ETC is a platform for developing DApps (decentralized applications) based on smart contracts. The execution of the program code both there and there is guaranteed by EVM, and Gas is used to carry out smart contracts and transactions.
But even at the development level, there are differences between platforms. In Ethereum, both Geth and Solidity (OOP) options are available, while ETC uses the Go Geth language, and a specialized client in the Scala language, Mantis, is created there.
Ethereum Foundation continues to work on the development of Ethereum, and Ethereum Classic is the so-called open source community-driven project. In terms of PR, marketing, the number of partnerships and implemented projects, Ethereum is noticeably ahead, as noted by Oleg Khovaiko.
ETH is a much more centralized cryptocurrency. You cannot directly make adjustments to the Ethereum code - only after considering / confirming the proposals.
After the hard fork, on December 11, 2017, Ethereum Classic, in contrast to Etherium, introduced a limited issue. ETC has some similarities with Bitcoin: decentralization, hard cap 210 million coins, Proof of Work as a consensus algorithm. Moreover, the team continues to work on PoW, while Ethereum is actively working on the implementation of the Casper hybrid protocol, combining PoS and PoW.
Successful projects on the Classic can be counted on the fingers of two hands, while on Ethereum a total of one thousand ICOs are launched, and the ERC-20 standard token is the most common in cryptocurrency startups.
Ethereum Classic Course and Perspective
After the separation of Ethereum on July 20, 2016, the community expected the “authentic” classic to lose the support of miners over time and go down in history. But already on July 23, the ETC token was added to the auction by the Poloniex cryptocurrency exchange, and then Kraken, Btc-E and some other platforms joined it. As a result, ETC showed a five-fold increase, having exceeded the mark of 3 USD per token. And in terms of capitalization, the coin entered the top 5, almost reaching $ 300,000,000.
In May 2017, against the backdrop of an overall market growth, the coin's capitalization for the first time exceeded $ 1 billion. Literally the following month, the classic became the first cryptocurrency in Bloomberg Terminal, was added to the eToro social trading platform, and the odious John McAfee announced his desire to mine ETC. Against the backdrop of positive news and overall market growth, the coin peaked in January 2018. The historic maximum value of Ether Classic relative to the dollar 45.51 USD was reached on January 14, 2018 with a capitalization of 4.5 billion.