Ethereum Classic is the less popular of the two major Ethereum blockchain branches.
Following the theft of about $50 million in ETH in 2016, the Ethereum Foundation led a hard fork to return stolen tokens to their original owners. A significant minority of the ETH community disagreed with this decision and chose to stay on the original blockchain, ignoring the hard fork.
This original branch of Ethereum still exists to this today. Because it is the less popular of the two blockchains by market capitalization, this one is called Ethereum Classic and the other one is referred to by the original name of Ethereum.
source: https://ethereumclassic.github.io/
Keep reading to learn more about Ethereum Classic.
About This Series + Disclaimer
This post is part of a new series where I investigate each of the top 50 coins by market cap (based on coinmarketcap.com's rankings on October 11, 2017). My goal is to help steem’s userbase become the most knowledgable blockchain community in the world.
Disclaimer: I am not an investment expert and will not be providing investment advice. I will teach you about the top 50 coins, and you can do what you want with that info.
What is Ethereum Classic?
Any good explanation of Ethereum Classic must start with an explanation of Ethereum itself - as ETC and ETH were the same blockchain until July 20th, 2016.
Just about everybody in crypto-land knows who Vtalik Buterin is these days. Currently age 23, he was only 17 when he first founded Bitcoin Magazine, a popular blog of its day.
He combined what he learned at his blog with his programming skills to come up with the idea for Ethereum two years later, publishing its white paper in 2013 and quickly attracting other talented developers to join him.
The Ethereum genesis block occurred on July 30th, 2015. For the first year, development of Ethereum went smoothly and there was a lot of optimism surrounding the project. Then things went wrong.
The DAO Hack
There’s a great timeline at the bottom of the Ethereum Classic Homepage where I got a lot of this info.
In April 2016, The DAO Ethereum contract was launched with a security audit performed by Dejavu. This crowdsale went on to raise $150 million which at that time was the largest cryptocurrency token sale of all time.
However, tragedy struck soon thereafter. On June 17th, 2016, The DAO’s treasury (holding the funds from the crowdsale) was hacked and had a significant portion of its funds drained by a malicious third party. This meant that everybody who participated in the crowd sale was at risk of holding the bag and losing their money.
On July 20th, The Ethereum Foundation led the Ethereum community in executing a hard fork which made it possible for investors to get their money back and got rid of the DAO. This was a controversial decision.
Following the July 20th hard fork, enough people stayed on the original chain to maintain its existence and major exchanges soon listed this token as Ethereum Classic. Ever since then, we’ve had the two blockchains existing separately from each other.
Modern ETC Development
The good news about the Ethereum Classic blockchain is that it doesn’t exist in direct opposition to the Ethereum blockchain.
ETC and ETH can co-exist. Using ETC is a vote in favor of fully immutable transactions, no matter what. Using ETH is a vote in the Ethereum Foundation, including Vtalik Buterin himself. It’s a notably calm scenario as opposed to all of the drama surrounding the recent Bitcoin fork with Bitcoin Cash.
While ETC hasn’t kept up with ETH’s enormous gains in 2017, they have done very well and are currently the 16th most valuable blockchain by market capitalization. A single ETC token is worth $32.09 as I write this paragraph.
Anybody who believes that “Code is Law” in a pure and final sense can use ETC. After all, that is the core virtue espoused on the top of their home page:
Given that the ETC blockchain has survived for this long post-hack, including a period where the hackers dumped a lot of the tokens onto the market at once, there is reason to have faith in this blockchain. As time goes on and ETC continues to do well, the purity of their “transactions are always final” ethos may become increasingly valuable.
Token Distribution
The initial ETC distribution is identical to that of Ethereum just prior to the first hard forked block.
Since then, the ETC development team decided on a new monetary policy for ETC. It is a similar policy to bitcoin, where the amount of tokens issued per block goes down at a fixed rate over time and eventually goes down to zero.
The total number of ETC tokens that will be issued will be between 210 million and 230 million. After that no more tokens will be issued.
Once the rate of tokens goes close enough to zero, ETC will be a deflationary currency. This could give it an edge for investors, as opposed to ETH which is a disinflationary currency - one where the inflation rate goes down over time but never reaches zero.
Important People in Ethereum Classic
all photos from iohk.io
Unlike many other blockchains, ETC does not have a single “official” team of developers. The two most active groups are ETCDEV Team and IOHK’s Grothendieck team
I’ll focus on the leadership of the Grothendieck team since that’s the most centralized area of development, and therefore the easier place to find information about devs.
Charles Hoskinson
We previously met Charles in the Token Investigation about Cardano. He’s the CEO and founder of Input Output, or IOHK, which manages development teams for both Cardano and Ethereum Classic.
Charles was one of the main players behind the decision for IOHK to deploy a seven person development team, named “Grothendieck Team” and mentioned earlier, to work on developing ETC. He was previously a founder of Ethereum itself so he has plenty of reason to care about how ETC turns out.
Alan McSherry
As the manager of IOHK’s ETC development team, Alan takes on a lot of responsibility for the direction of ETC. He previously studied at Limerick University in Ireland, graduating with a degree in Computer Engineering and going on to work as a developer and CTO. He currently resides in Dublin.
Here you can see Alan talking at a Hong Kong summit - he comes off very intelligent and well spoken.
Market History
The markets are settling down a little bit from the frenzy of December 2017. Nonetheless it is still quite hard to predict anything.
Here’s the chart as of December 27th, 2017:
The most interesting thing to me is that ETC held its value after the bull market of June/July 2017. While a lot of other tokens tanked in the coming months of August through November (steem certainly did), ETC didn’t suffer as much.
Right now it’s doing great, a little bit down from the peak of the December pump but still at one of its highest valuations ever.
Final Thoughts on ETC
I like ETC. The philosophy that all transactions should be final is a noble one - and one that I fundamentally do agree with.
There is clearly a lot more momentum right now for the main Ethereum blockchain. I could see some institutional level projects being drawn to ETC and its pure history of immutability, but also can see that most developers will want to be on the hype train of ETH.
I suspect that ETC will have enough dedicated people pushing it forward to survive and perhaps even prosper as a niche cryptocurrency for many years to come. It seems unlikely that ETC will ever dethrone ETH though - I doubt such a thing could ever happen.
What do you think about Ethereum Classic?
