Key Takeaways
- Ethereum Classic (ETC) is a decentralized, open-source blockchain platform that runs smart contracts, similar to the original Ethereum (ETH) network.
- Ethereum Classic was launched in 2016 due to a split in the Ethereum blockchain following a hacking incident.
- It uses a Proof-of-Work (PoW) consensus mechanism, unlike Ethereum, which is transitioning to Proof-of-Stake (PoS).
What Is Ethereum Classic (ETC)?
Ethereum Classic (ETC) is a decentralized, open-source blockchain platform that supports smart contracts, similar to its more well-known cousin Ethereum (ETH). It originated from the original Ethereum blockchain launched in 2015.
In 2016, a major hacking incident occurred involving The DAO, a decentralized organization built on Ethereum. Hackers exploited a vulnerability and stole significant funds, causing a deep debate within the Ethereum community. The Ethereum blockchain was forked to rectify the situation, creating a new chain (the current Ethereum) where the hack was reversed. Ethereum Classic, however, remained on the original chain, upholding the idea of immutability and the “code is law” principle.
Today, Ethereum Classic presents itself as the original, unaltered Ethereum blockchain, encompassing decentralization, immutability, and adherence to the core blockchain principles.
How Does Ethereum Classic (ETC) Work?
Ethereum Classic (ETC) functions very similarly to its close relative, Ethereum (ETH), but with a key difference: their consensus mechanisms. Here’s a breakdown of how ETC works:
Network Of Nodes
Like most blockchains, ETC relies on a decentralized network of computers called nodes. These nodes work together to verify transactions and maintain the integrity of the blockchain ledger.
Proof-of-Work (PoW) Consensus
Unlike Ethereum, which transitioned to Proof-of-Stake (PoS) in 2022, ETC uses a Proof-of-Work (PoW) consensus mechanism. In PoW, miners compete to solve complex cryptographic puzzles. The first miner to solve the puzzle gets to add the following block of transactions to the blockchain and earn ETC tokens as a reward.
Smart Contracts
Similar to Ethereum, ETC supports smart contracts. These self-executing programs run on the blockchain when predetermined conditions are met. Smart contracts enable the creation of decentralized applications (dApps) for various purposes, such as finance, gaming, and supply chain management.
Immutable Ledger
Once a transaction is validated and added to a block, it becomes part of the permanent and immutable public ledger. This ensures transparency and tamper-proof record keeping.
Also Read: Difference Between Ethereum And Ethereum Classic
Ethereum Classic (ETC) Token And Tokenomics
Tokenomics
The ETC token is Ethereum Classic’s native cryptocurrency. It is used for:
- Transaction Fees
- Smart Contract Interaction
- Governance
Token Details
Total Supply: 210,700,000 ETC
Circulating Supply: 149,822,821 ETC
Current Price: $37.61
Market Capitalization: $5,650,485,700
This information is current as of December 5th, 2024, and the token’s price, market value, and available supply may fluctuate.
Distribution
Anyone holding ETH at the time of the fork received the same amount of ETC. This duplicated the existing ETH supply and added it to the new Ethereum Classic chain.
Where Can I Buy Ethereum Classic (ETC)?
Binance – Binance is a major exchange offering a wide range of cryptocurrencies. It offers multiple ways to buy crypto, including credit cards, debit cards, and peer-to-peer (P2P) trading.
Bybit – This exchange is known for its derivatives and margin trading features, but you can also use the platform for spot trading.
Coinbase – Coinbase is an American-based cryptocurrency exchange that allows you to buy cryptocurrencies using various payment methods, including bank transfers, debit cards, and wire transfers.
Is Ethereum Classic (ETC) A Good Investment?
Pros
- Immutability – ETC prioritizes the principle of immutability, meaning transactions and code on the blockchain cannot be altered after they are confirmed.
- Fixed Supply – Unlike Ethereum, ETC has a capped maximum supply, making it deflationary.
- Decentralization – No central authority governs the network, and decisions are made through community consensus.
Cons
- Smaller Community And Ecosystem – Compared to Ethereum, Ethereum Classic has a smaller developer community and ecosystem. This translates to fewer decentralized applications (dApps) and integrations built on the ETC network.
- Security Risks – Ethereum Classic’s reliance on Proof-of-Work (PoW) consensus makes it susceptible to 51% attacks, in which a malicious actor gains majority control over the mining power to manipulate the network.
- Limited Scalability – The Ethereum Classic network currently faces scalability challenges, which can lead to network congestion and slow transaction times if adoption increases significantly.
Final Thoughts
Whether Ethereum Classic (ETC) is a good investment depends on your risk tolerance and goals. Remember, this guide only provides a starting point for your research. Always conduct your due diligence before making any investment decisions.
