Ethereum Classic Cryptocurrency – what it is and why it is needed in simple words

What is Ethereum Classic

At the moment, the global economy is witnessing a rapid development of the cryptocurrency market. Today, this direction is an important component of the financial sphere in general. Over the past few months, the cryptocurrency community has been quite actively discussing one of the coins called Ethereum Classic. This coin has shown itself to be a popular and competitive asset among traders, and its rates have gone up sharply.

Because of the hardforks conducted, the prospects of Ethereum Classic are quite decent according to the experts in the field of digital currencies.But what the coin is, how it appeared and how it differs from its predecessor is still not clear to some novice users.  Therefore, in the article below we will consider all the detailed characteristics and parameters of this platform. Only after having evaluated and studied all the important information, one can make a decision on the advisability of adding Ethereum to the cryptocurrency portfolio next year.   

What is Ethereum Classic (Ethereum)

So what is Ethereum Classic and what is it? This platform is a cryptocurrency project operating through a blockchain system and equipped with smart contracts. The blockchain information system of this coin stores almost all data, namely the data on the status of accounts and all software after the transactions. This resource is an open-source public platform.

It is generally accepted that the main feature of the coin lies precisely in the smart contracts. These contracts are notable for their operating mechanism. That is, the contracts function thanks to predetermined conditions that are automatically observed in the process of making a deal between traders. The program monitors every stage of signing the papers and controls the conditions of executing obligations under the contract. In fact, thanks to the software, the chance of human error, third-party intervention or fraud is minimized. That is, such smart contracts are the most reliable agreements in the trading business.

Participants in the network of information blocks have the ability to transfer between themselves the asset of classic Etherium, and store funds in specialized wallets. Also coins are paid to users of the nodes for performing calculations in carrying out financial transactions. An internal Transaction Asset Allocation Tool (GAS) is used to eliminate spam on the platform and distribute assets as requested.

The platform is a decentralized virtual machine that is capable of running scenarios using an international network of public nodes. The platform emerged as a consequence of the DAO hack and is an offshoot of the original Ether. After the attack, the decision was made to hold a hardfork, which made the affected transaction invalid and formed a new blockchain model. But not all users agreed with this decision, so some customers continued to work on the original basis. That is, the project discussed in this article uses the same old blockchain.

The platform is designed for the creation and development of new open source applications. The resource produces cryptocurrency, due to which users have the opportunity to create their own tokens based on the information blocks of the classic Ether. The project is inferior to the original Ether in its scale. And to some extent, this is its advantage, which is beneficial for application developers who choose the platform for work.

As for the mining organizations, they help maintain the independence and decentralization of the Classic version. Also, importantly, they help to stabilize the value of the coin on the market. The project is among the ten largest sites in the field according to the size of the market capitalization. Cash turnover to date is about 97 million tokens. At the same time, to get the asset is as easy for everyone as Bitcoins, which are popular all over the world. 

Several teams are currently working on the network:

  1. ETC Dev Team – this group is headed by Igor Artamonov. It works on the main client of the Classic Geth system. In addition, the team is creating several other projects from scratch – Emerald Platform, Emerald Wallet. It’s also busy developing a virtual machine called SputnikVM.
  2. IOHK is a team headed by Charles Hoskinson. The group has been working on the further development of classic Ether since December 2016.
  3. Ethereum Commonwealth – This organization raises funds and assets for product development to improve and modernize the project. The activity is carried out with the use of ICO. The team itself was founded by a confidential individual under the nickname Dexaran. The same team develops the DexNS smart agreement system and token standards.

That is, in principle, there is no single leader in the company. The leader’s responsibilities are evenly divided among the core development teams, each contributing in their own way. This configuration of the leadership department was created for a reason. After all, the main idea of the project as a whole is the embodiment of independence and decentralization, and this arrangement means being a truly decentralized movement. At the same time, any user can become a member of the project development department. Customers have the opportunity not only to join the work on the modernization of the software, but also to help in the preparation of documents, financial materials, conducting traders’ events, the development of mining farms, and the like. 

History of Ethereum Classic

When choosing and researching a cryptocurrency as a candidate for a resource to work with or invest in, it is important to know where any project came from in the market in the first place. The history of Ethereum Classic does not begin with it at all, but with the preceding platform.

Ethereum was originally proposed by Vitalik Buterin, the man who founded Bitcoin Magazine, known to all traders. The first idea was put forward in late 2013, and already on July 30, 2015, the network was fully ready for operation and launched. From the moment of entering the market, the resource showed itself on the positive side, causing interest not only from new startup projects, but also from large investors. 

However, in June 2016, an extremely unpleasant incident occurred. A bug was found in the software code of The DAO. On June 16, a vulnerability in the platform for autonomous investment wealth management led to a hacker attack. Unknown people moved more than a third of all assets worth $50 million to the vaults under their control. But the design of the wallets and the system itself did not allow for immediate withdrawal of these funds. The transfer wasn’t available until a month later.

The management of Etherium was thinking about how to return the invested capital to investors and resolve this unpleasant incident in general. As a solution to the problem and to preserve funds in the future, the developers and founders of the platform decided to change the blockchain and return the stolen money. But not everyone was on board with this course of action. Some felt that the information chain should remain unchanged and secure.

As a result of the bifurcation of opinion, the platform underwent a division. That is, two projects were born from the original Ethereum – Ethereum Classic and Etherium. Adherents of the Classic resource continued to mine coins based on the old blockchain, while others began working on the new one created as a result of the hardfork. But it is worth noting that each investor’s capital doubled during the fork, so many continue to use both platforms.  

The distinctive features of Ethereum Classic

To the features of this asset, the crypto market specialists refer the following characteristics:

  1. Smart contracts are an agreement to sign and comply with the terms, which are regulated and controlled by specialized software. The digital mechanism clearly follows the instructions, so there is no interference in the process. This guarantees the transparency of the transaction between traders and the honesty of the parties.
  2. The Solidity DApps programming language is a standard type of programming used to create Ether. It is used to develop self-executing contracts and was created as part of the project.
  3. Intact Transaction History – Generally, this metric is responsible for the reliability of the blockchain. Such an information chain is considered “untouchable,” that is, something that will remain unchanged. But forking can lead to adjustments. That’s exactly what happened after the 2016 hacker attack. However, the transaction story was still intact, except for one point: the forking took the stolen investment money from the hacker and placed it in a refund deposit.
  4. Well-established infrastructure – the data center is located in Europe, America and Asia. It is a real physical server that is protected against DDOS attacks.
  5. Nicehash support – integrating a dedicated port, full compatibility with the Nicehash version of the stratum protocol, and being on the list of recommended pools.
  6. Email and Telegram notifications – the system notifies users by sending notifications about new blocks. Also, the results of monitoring the state of workers, which is free for any number of farms, are sent via channels of communication.

To summarize, it is worth saying that the digital coin is a decentralized platform, on the basis of which intelligent contracts work. At the same time, they function absolutely freely, without censorship and are accurately executed by the prescribed software without delays or anyone’s participation (interference). That is, the human factor is 100% excluded and has no effect on the network performance. This is the main idea of using the system.  

Also, it is noteworthy that in its work, the cryptocurrency resource uses the postulates, which are listed on the main page of their site, where each user can find them. The principles of activity include such qualities as immutable and not censored. That is, the site embodies the idea of complete freedom. But the classic Etherium differs from the others in several other features:

  1. Security – the level of security of the resource is high, as despite numerous hacking attempts, the network continues to work steadily without failures or delays.
  2. High trading volumes – the index is quite high in comparison to other participants in the stock market. In addition, in some periods the turnover grows even more than that of the main competitors.
  3. Limited emission – the issue of assets is limited, which does not allow the coins to depreciate.
  4. Ether Classic is easy to exchange to fiat money, because there is no need to convert it to BTC.

So due to these parameters Ethereum is a special asset, which is firmly rooted in the sphere and according to analysts’ forecasts, will be among the leaders for many years to come.

The difference between Ethereum Classic and Ethereum

Ethereum Classic vs Ethereum

After the platform split into two platforms in 2016, the resulting resources are actively used by a large number of users. But whether there is a difference between them at all and what exactly it consists of is not clear to everyone. Therefore, when studying a coin, it is important to understand which one is better.

Let’s start with the common criterion for both cryptocurrencies – it is a blockchain. In principle, it is identical. That is, the informative blockchain of the Ethereum Classic is the same as the Ethereum blockchain, but until the specific block number 192000, in which the hardfork was conducted after the hacker attack. The Classic version is a continuation of the original blockchain of the first Ether with its transaction history intact. This explains one of the main principles of the project. The founders pride themselves on the fact that the resource is completely free of extraneous interference.

Also the similarity of both platforms is in the mechanism of work, which is identical, namely the activation of decentralized applications based on its own digital machine. And the uses of tokens are the same – for cryptocurrency coins you can buy other assets and pay for the formation of smart contracts.

As for the difference between the two resources, it lies in the very ideology of functioning. All the differences can be divided into several groups:

  1. Interference with the informational blockchain. In Ethereum, the blockchain can be changed. That is, if adjustments need to be made, a vote is taken, and if there is a majority “For” vote, a change is written into the registry regarding any nuance. As for the classical version of Ether, it is the opposite, that is, the blockchain is not changed. It is not possible to edit information from the registry.
  2. Decision making. The original Ether worked through decision making from the Ethereum Foundation developers with initiative from the network users themselves. But that’s not how the Classic branch is arranged. Decisions in it are discussed by community members and the development managers themselves. That is, collective problem solving prevails in this project.
  3. The vector of development and modernization. The original Etherium attracted a large number of developers to the project, which ended up outnumbering the users who created the applications themselves. But the Ethereum Classic is aimed specifically at creating secure smart agreements. The number of users is not important. The main thing is the security of launching the application (the higher the protection the better).
  4. The policy of the digital coin. In the first version of the resource, the total issue of cryptocurrency was unlimited, that is, the number of assets was not limited by the creators. This arrangement of the platform led to inflation (3% annually). As for the classic version of the platform, the issue has a limit, namely 210 million ETCs. Every year inflation will be about 3%, but from 2025 extra coins will be withdrawn from circulation.

There are a few other minor technical differences. For example, Classic has a higher throughput. That is, the resource can process up to 25 transactions a second, unlike the first Ether, the indicator of which is 15.  

The projects also differ in the level of complexity of coin mining. Ethereum Classic is mined much easier, because the process does not require large computing power or large farms. A good computer with a high-quality video card is enough.

Projects on the Ethereum Classic network

Ethereum Classic hardforks are not splitting the network as some believe, they are just new projects being created to improve the current version of the system. On January 13, 2017, developers were able to eliminate the so-called “complexity bomb” that was envisioned for the transition to PoS mining. On December 11, 2017, a limited coin emission was introduced.

But one of the most promising projects is the Callisto Network, activated in March 2018. The name means the name of one of the satellites of the planet Jupiter. But the project itself is not just a fork, but a whole sidechain (a blockchain for modernization). The new platform has its own CLO token. When creating the asset, the developers used the source code of Classic Etherium, but Calisto itself is an independent blockchain, which is simply integrated with the main information chain ETC. But it also has its own genesis blockchain.

Another more modern project, created as a result of the January 11, 2019 fork, is called Ethereum Classic Vision. The resource is a blockchain platform for creating decentralized applications. The project provides for its own currency ETCV.

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