Ethereum Classic: All You Need to Know

Discover the uses and future of Ethereum Classic (ETC) in this comprehensive guide. Learn about ETC mining and its key differences from Ethereum.

Decentralized, blockchain-based, open-source Ethereum Classic (ETC) is both a cryptocurrency and a platform for computing. It enables programmers to create and implement smart contracts—autonomous, self-executing code blocks that launch specific actions in response to specified circumstances.

For instance, Ethereum Classic is used for paying the gas price for conducting transactions using ETC. Finally, using ETC is identical to using any other cryptocurrency.

Various significant ideas and elements of Ethereum Classic will be covered in this tutorial.

What is Ethereum Classic?

Ethereum Classic (ETC) is a cryptocurrency that launched in 2016 as a hard fork—a permanent split— from The Ethereum Classic blockchain, like the Ethereum network, which can support smart contracts and decentralized applications and manages its own Ethereum Classic tokens.

Following a significant hacking incident, Ethereum Classic forked from Ethereum, a rare but possible occurrence for cryptocurrency blockchains. Millions of Ethereum tokens were lost as a result of the hack.

In response, the primary Ethereum blockchain updated its database to delete incorrect transactions. That strategy was opposed by many people in the original Ethereum community, which caused the fork. The unaltered Ethereum ledger, which includes the transactions from the hack, was used to create Ethereum Classic.

Ethereum Classic Pros

Supports GPU mining, making it great for solo mining
You earn ETC rewards that can be cashed out or stored for future profit
Dedicated developer team that aims to steer the coin toward global adoption
Will continue to be mineable until all coins are released
Widely accepted and supported on major exchanges, making it easy to sell or trade

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Ethereum Classic Cons

Competition means earnings are likely to reduce
You can lose money if prices crash, as is possible within the crypto market
Potential of new 51% attacks, as network hashrate is still relatively low

The Birth of Ethereum Classic

Using smart contracts, it is possible to build a Decentralised Autonomous Organisation or Simply put, a DAO on Ethereum is a governance and decision-making mechanism that is automated and doesn’t require human intervention.

In 2016, the German startup Slock launched its DAO project on Ethereum, known as “The DAO”. While the project received over $150 million in funding through crowdfunding, hackers stole $50 million by taking advantage of a flaw in its smart contract.

In order to restore the funds, most Ethereum users—including founders Vitalik Buterin and Gavin Wood—supported a radical change in the blockchain’s base protocol or a hard fork. This resulted in the formation of the new Ethereum (ETH) chain.

However, a section of the community remained opposed to the fork, choosing instead to stand by the principle of “Code is Law”. Asserting those blockchains cannot be bent according to human whims, they remained on the old chain and renamed it as Ethereum Classic (ETC).

Since Ethereum Classic preserves the old code of the Ethereum blockchain as it was until the DAO attack, it is often regarded as the “original” Ethereum crypto.

How is Ethereum Classic Different from Ethereum?

When it comes to fundamental functionality, Ethereum and Ethereum Classic are quite similar. The majority of Ethereum’s key features are also available in Ethereum Classic.

But ETH and ETC differ significantly in important ways. Most importantly, Ethereum Classic is incompatible with changes made to the Ethereum blockchain.

This became particularly noticeable when the Ethereum blockchain finished transitioning to a proof-of-stake consensus mechanism in September 2022. A proof-of-work protocol was still used by Ethereum Classic.

The blockchain and code will always be considered immutable by the Ethereum Classic community. The proof-of-work system from before the merge is still in place. And as a result, miners must continue to verify ETC transactions.

A proof-of-work mechanism is more secure and decentralized than a proof-of-stake system, according to both supporters of the merger and opponents of Ethereum 2.0.

Miners Move to Ethereum Classic After the Merge

Following the merge, miners switched to Ethereum Classic, which helped bring the smaller cryptocurrency to public attention. In the wake of the merge, the ETC hash rate, which represents the total power consumed by mining, increased by 280%, demonstrating the extent to which miners have switched to Ethereum Classic.

Staking pools managed by centralized businesses were the primary cause of this increase. With the help of an Ethereum staking pool, multiple ETH owners can pool their tokens to gain validator status. Ethereum requires 32 ETH, roughly $44,000 at the time of this writing, to obtain a “set of validator keys.”

Prior to the merger, the U.S. Tornado Cash, a virtual currency mixer that assisted in obscuring the source and destination of funds on the Ethereum blockchain, received Treasury approval. Tornado Cash is accused by the Treasury of facilitating money laundering. This clarified the issue with Ethereum’s proof-of-stake mechanism further.

This argument demonstrates how Ethereum and Ethereum Classic hold different ideologies. While crypto pragmatists advocate using Ethereum because it is more flexible and malleable, crypto purists advocate a libertarian, censorship-resistant, decentralized model.

Uses of Ethereum Classic

On the Ethereum network, decentralized computations are mainly paid for using the ETC, or Ethereum Classic, asset.
On the Ethereum Blockchain, ETC was used to pay for transaction processing and smart contract operations. This is referred to as “gas,” and the cost incurred as a result of these actions is referred to as “GAS costs.”
ETC is another native token with a fixed market supply cap and a monetary policy that establishes a predictable, deflationary emission schedule.

Goals of Ethereum Classic

Since the split, there have been a number of additions and modifications to the Ethereum Classic project.

The project’s goal is to create a global payment network based on smart contracts that can function decentralized.
Like other cryptocurrencies, Ethereum Classic will probably strive to be a digital store of value, which means you can save and exchange it while maintaining its value.

The purchasing power of a cryptocurrency can be quickly converted to cash or used to buy other assets, just like money, and is included in its digital store of value.

Limitations of Ethereum Classic

Ethereum has gained popularity as the more reliable of the two networks, even though Ethereum Classic also supports smart contracts and serves the same market.

The scalability of Ethereum Classic’s payment systems remains one of the project’s main future concerns despite numerous software updates.
Smart contract security is also likely to be a problem, particularly in light of the recent hack of Ethereum Classic, which resulted in the theft of millions of dollars.

Here is more information about Ethereum Classic mining.

Future of Ethereum Classic

Given that Ethereum is regarded as the more legitimate of the two networks, especially in light of Ethereum Classic’s security issues, the future of Ethereum Classic appears less promising than that of Ethereum.

Due to system hacks, investors have lost faith in ETC over time. Until ETC can rewrite its code and software to guard against more hacks, Ethereum Classic may face difficulties. But it’s still unclear how the Ethereum Classic project will develop smart contracts and whether they can be adopted for widespread use.

Conclusion

Knowing “What purposes does Ethereum Classic serve?” might help you with your crypto basic knowledge.

For the most part, decentralized computations on the Ethereum network are paid for using the ETC, or Ethereum Classic, asset. On the Ethereum Blockchain, ETC was used as payment for processing transactions and smart contract operations.

FAQs

Does Ethereum Classic Have a Future?

After the analysis of the prices of Ethereum Classic in previous years, it is assumed that in 2024, the minimum price of Ethereum Classic will be around $45.97. The ETC price may reach a maximum of $53.66. 2024 could see an average trading price of $47.26.

What Makes Ethereum Classic Less Expensive?

This raises interest in ether, the currency that powers transactions on the Ethereum blockchain. Simply put, the popularity of the current iteration of Ethereum Classic isn’t as high, which lowers both demand and price.

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