For outsiders, it's confusing enough to try and get their heads wrapped around the concept of blockchains and cryptocurrencies and having to absorb each technical jargon like going through a university lecture. It would certainly add to their puzzlement if they typed in “Ethereum” in Google, to find that there are TWO different shades of Ethereum. Now, they'll have to piece together which is actually the better or preferred option in a civil war of Ethereum vs Ethereum Classic.
The birth of Ethereum Classic proves that the world of the blockchain, although the idea of the technology itself claims to bring a new age or a stepping stone for the next evolution towards a better civilization, is no stranger to discourse and conflicts.
Both chains share plenty of similarities, thanks to having been born for the same purposes in being “the world's computer” and molded as one of the most versatile, powerful, and modular blockchains among them all.
They both can be adapted in any number of scenarios with the creation of decentralized applications (dApps) and powered by immensely capable smart contracts. Meanwhile, both of the Ethereum brothers have very extensive monetary systems laid out and can be the bedrock to which entire financial structures to be built on top of them. So, is there anything to make one better than the other? Well, read along our Ethereum vs Ethereum Classic comparison to learn more.
Ethereum vs Ethereum Classic Comparison Table
|Ranking: 2||Ranking: 62|
|Network Fees: Moderate to High||Network Fees: Low|
|Market Capitalization: $208,779,941,728||Market Capitalization: $1,436,909,818|
|Circulating Token Supply: 115,097,768 ETH||Circulating Token Supply: 116,313,299 ETC|
|Ease-of-Use: Easy||Ease-of-Use: Easy|
Ethereum vs Ethereum Classic – Main Difference
Both Ethereum and Ethereum Classic are smart contracts-compatible blockchains and allows developers to create a wealth of decentralized applications (dApps) or use the ether cryptocurrency to mint new tokens. As we'll learn more in our Ethereum vs Ethereum Classic comparison, later on, much of the core technology that powers both chains is similar. But there are several differences that make Ethereum Classic stand out from its original mold.
The Ethereum Classic community stands by the core philosophy of the original Ethereum code. Mainly, this is down to the nature of immutability, in the sense that what has already happened on the blockchain cannot simply be reversed, even though the community is voting. This relates to Ethereum's DAO exploit, as we'll take a deeper dive into our Ethereum vs Ethereum Classic overview. There are also other differences, such as its total token supply cap and backward compatibility.
What Is Ethereum?
Founded in 2013 by Vitalik Buterin, the Ethereum blockchain has been regarded as “the world's computer” and aims to bring the same power to the decentralized blockchain space, just as how Microsoft pioneered the desktop operating system with Windows. Besides Bitcoin for its appreciative nature, Ethereum is the world's most popular blockchain ecosystem, just as its native Ether cryptocurrency is the second most valuable crypto token in the world.
Over the years since its creation, many other centralized and decentralized protocols have adopted Ethereum, along with heavy backing from major industries and institutions pushing for Ethereum's adoption. Unlike some other blockchains that have been programmed solely for their monetary or financial usage – such as Bitcoin or Litecoin, two other chains of the era – Ethereum has moved to span a more expansive blockchain ecosystem, encompassing many different sectors.
We have seen massive growth from the wider blockchain space, and most of which are powered by Ethereum. For example, the continued resurgence in the use of smart contracts, issuance of non-fungible tokens (NFTs), decentralized finance (DeFi) platforms, creation of wholly decentralized applications (dApps), blockchain-based gaming, and more are built and run on Ethereum. This is proof of the versatility and power of the Ethereum blockchain to be used in any and every scenario.
What Are Ethereum's ETH Cryptocurrency Tokens?
Ether – or more well known by its ticker name, ETH – is the native cryptocurrency within the Ethereum blockchain network. Ethereum is categorized as a 2nd-generation blockchain, meaning it was made to be extremely modular for any application and is also compatible with innovations (for the time, anyway) such as smart contracts. Ethereum's Ether is, therefore, the main medium for transactions within this blockchain but could also be used as a store of value.
Ethereum's ETH tokens are mostly spent on “gas” fees, which are the transactional costs incurred whenever a certain action is done on its blockchain. Such actions include, for example, executing a smart contract, “minting” new NFTs like artwork or collectibles, processing trades are done on a decentralized exchange (DEX), and so on. ETH is also an acceptable form of currency to be used within decentralized applications (dApps) or decentralized finance (DeFi) services, for instance.
Owing to Ethereum's massive popularity and usage, their native ETH tokens have seen stratospheric gains in price, now valued at $1,813.94 for a single ETH as of writing this Ethereum vs Ethereum Classic review. Currently, Ethereum's market capitalization is valued at $208,779,941,728, backed by a supply of 115,097,768 ETH in circulation, making its ETH cryptocurrencies the 2nd-most valuable in the cryptocurrency space, behind only that of Bitcoin.
How Was Ethereum Classic Born?
Now, it's a good time to get a closer look into the birth story of the younger siblings in this Ethereum vs Ethereum Classic comparison and understand more about how Ethereum Classic came to be. In 2016, ‘The DAO' was founded as a namesake decentralized autonomous organization (DAO), whereby it functioned like a decentralized venture capital fund or fundraising platform, where investors and entrepreneurs can pool together their funds and invest in certain projects.
To get involved in the funding process and earn a portion of the return-on-investment from future successes, participants within the DAO needed to buy DAO tokens using Ether cryptocurrencies. It became one of the most successful crowdfunding campaigns in history, having raised more than 12.7-million ETH (valued at more than $150-million at the time). However, a flaw was found and had been exploited by malicious parties on June 17th, 2016.
The Splitting Of The Ethereum Chain
The attackers managed to drain around 11.5-million ETH (worth around $50-million then) from the DAO fund. Then came a bitter disagreement amidst the Ethereum community over what to do next and whether this could be fixed. There were 3 options that the community could choose from. Firstly, there was the argument that nothing should and could be done, as every transaction on the Ethereum blockchain was theoretically immutable, and thus the exploit could not be reversed.
But a majority of community members wanted to update the Ethereum blockchain and thus reverse the transaction and allow for the funds to be “returned.” Secondly, the Ethereum community could opt for a soft-fork, which would allow the community to choose by themselves if they want to update to the new version of the chain or not. Nonetheless, a soft-fork would still allow for cross-compatibility between all users, regardless if they choose to accept the new update.
However, it was found that a soft fork had its own technical issues. This left the community with the third option, which was a more radical hard-fork of the Ethereum chain in order to reverse the exploit, and allow all the siphoned off Ethereum to go back to the addresses of the original owners – The DAO. Following a heated debate over maintaining the irreversible immutability of the blockchain, the chain later split – with Ethereum carrying over the new updates and the old version stayed with Ethereum Classic.
Tokenomics of Ethereum Classic's ETC Cryptocurrencies
The hard-fork of the Ethereum blockchain was a highly talked about the controversy at the time, but many saw it as a necessity to maintain the integrity and the reputation of the Ethereum community. In the end, a tiny minority – around 10% of the total Ethereum users and adopters at the time – chose to stay on Ethereum Classic, while most of the community have moved on towards Ethereum as we know it today in this Ethereum vs Ethereum Classic comparison.
Although much of its core features and technologies remained the same with the Ethereum Classic chain, the tokenomics have changed. The native currency of the Ethereum Classic chain is also called Ether, or better known by its ticker – ETC. It works similarly to Ethereum's Ether. Compared to Ethereum, which has not maintained a fixed supply cap, Ethereum Classic has set a maximum token supply cap of 210,700,000 ETC, of which 116,313,299 ETC are in circulation.
Since Ethereum Classic has only managed to attract a far smaller crowd compared to Ethereum, this has reflected on its price. At the time of writing this Ethereum vs Ethereum Classic comparison, the price of one ETC is $12.35 – 150-times less than Ethereum's ETH price. Compared to Ethereum, Ethereum Classic maintains a ranking as the 62nd-most valuable cryptocurrency, with a market capitalization value of $1,436,909,818, which is tiny compared to Ethereum marketcap.
What Are The Similarities Between Ethereum And Ethereum Classic?
Over the years, up until this Ethereum vs Ethereum Classic comparison, Ethereum Classic has diverged even further from its sister in terms of updating its technology. However, the core of Ethereum Classic is similar to that of Ethereum, as it shared a similar underlying code. This means that Ethereum Classic is powered by a similar Proof-of-Work (PoW) algorithm, including a Turing-complete smart contracts execution engine known as the EVM, or Ethereum Virtual Machine.
This also means that Ethereum Classic shares the same Ethash mining algorithm, which was originally designed to be resistant to mining dominance by ASICs (application-specific integrated circuits). However, Ethereum Classic's low mining participants compared to Ethereum means that Ethereum Classic is more vulnerable security-wise to 51% chain attacks and double-spending, where four major exploits were logged against Ethereum Classic in just 2019 and 2020.
Other key similarities with the Ethereum blockchain is Ethereum Classic's ability to issue and allow developers to build their own tokens atop different cryptocurrency standards and has an extensive versatility in adapting to high-performance financial applications. For example, the Saturn Network decentralized exchange is creating its SATURN crypto as an ERC-223 token on Ethereum Classic, and how Wrapped ETC (WETC) has recently been created to give ETC token holders exposure to Ethereum-powered DeFi protocols.
The shared similarities in the monetary abilities will also theoretically allow Ethereum Classic to power stablecoins, just as how major stablecoins such as Tether or USDC are running on Ethereum. Ethereum Classic's blockchain allows for a large variety of different decentralized applications to be made and powered on it, just like Ethereum. Although it can, in theory, function similarly to Ethereum, Ethereum Classic has remained behind in terms of developer interest and user adoption.
What Are The Differences Between Ethereum And Ethereum Classic?
Although the underlying structure of Ethereum Classic is similar to Ethereum, there have been several changes to make them more distinct from one another. Here are some of the key differences that separate the two Ethereums apart for our Ethereum vs Ethereum Classic comparison:
1. Data Immutability
One of the core principles which has forced the split towards Ethereum Classic was the matter around data immutability. This is an idea whereby data cannot be reversed, and everything that has already happened stays permanent regardless of whether the community approves of it or not. Ethereum Classic's community values data immutability highly as one of their core tenets behind the project and practices a motto to affirm this, “Code Is Law.”
Essentially, they disagreed strongly against Ethereum's decision to fork their chain and return the funds to the DAO following the exploit. Ethereum Classic's users argue that if data can be rearranged to benefit one party – for better or worse – what's to stop it from happening again and again? Data immutability is one of the unique aspects of Ethereum Classic, where applications that run on its blockchain can be programmed without the possibility of censorship or tampering.
As we mentioned earlier in our Ethereum vs Ethereum Classic review, the latter has a unique tokenomics structure. Unlike Ethereum's variable monetary policy, Ethereum Classic has a limit on the total token supply for its native ETC cryptocurrencies. This is modeled after Bitcoin's deflationary economic model that is designed to reduce the supply over time and thus increase its scarcity. Although capped at 210,700,000 ETC, Ethereum Classic could increase this further up to 230-million ETC.
Following Ethereum Classic's mining algorithm, new blocks are generated every 15-seconds, and block mining rewards will eventually be reduced by 20% every 5-million blocks (around every two years). Ethereum Classic will be mineable until its total supply will deplete sometime around 2070. The major advantage of Ethereum Classic's tokenomics compared to Ethereum is that its monetary policies are more defined and predictable, along with its set inflation schedule.
3. No Backwards Compatibility
One downside to Ethereum Classic's “independence” from Ethereum is that it is not backward compatible with its sister chain. This means that future updates that have been programmed for Ethereum cannot simply be made compatible with Ethereum Classic. This is one consequence of the earlier hard-fork, which means that the two chains cannot easily interoperate or share resources with one another. This can be badly disadvantageous for Ethereum Classic.
For instance, Ethereum wishes to cut down on its carbon footprint and make its computing more efficient and scalable with the switch to a Proof-of-Stake (PoS) consensus algorithm. We'll learn more about this in the next section of our Ethereum vs Ethereum Classic overview. Ethereum Classic – if they wish to make this switch – cannot seamlessly port over Ethereum's design. This means that Ethereum Classic cannot have easy access to any future updates made on Ethereum.
What Are Ethereum's Future Roadmap Updates?
At this point in our Ethereum vs Ethereum Classic comparison, we've covered bases on the important differences that make Ethereum Classic unique from its sibling. Now, it's time to take a look at what they both have in store for the future. As for Ethereum, the most anticipated network update would be the implementation of Ethereum 2.0. This should solve some of the pressing issues around the current state of Ethereum, such as high network congestion and costly fees.
The changes made with ETH 2.0 will mean that existing and future applications will be able to have more room to grow, especially for those applications that require high throughput, such as decentralized finance (DeFi) protocols. Aside from the aforementioned change from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) algorithm to improve on speed and energy efficiency, the Ethereum 2.0 update will bring new improvements to the “sharding” mechanism of the blockchain.
This will split transactions into smaller batches and make them more efficient, thus increasing scalability and network performance. These changes will have the effect of elevating Ethereum's processing speeds to around 100,000 transactions per second (TPS). There are also some other supplementary updates in the meantime to fix Ethereum's limitations, such as the EIP-1559 upgrade to help change the fee structure, which will make transaction fees much cheaper by burning tokens used to pay for ‘gas.'
How About Ethereum Classic's Future Roadmap Updates?
In contrast to Ethereum's bold and potentially ground-breaking roadmap, Ethereum Classic's plans for the future are more modest. Its most recent network updates were implemented in late 2020 with the ‘Thanos' update. Along with other smaller iterative changes, this update includes major improvements to the mining aspect of Ethereum Classic to secure its blockchain against 51% chain attacks in the future. This is helped with a switch from the Ethash to Etchash mining algorithm.
Apart from that, Ethereum Classic's most immediate plan for the coming months of 2021 will shift more towards increasing network adoption and grow the size of its active user base. Compared to most other blockchains – including Ethereum – Ethereum Classic is lagging far behind in terms of growth and interest. Aside from this, there are also other proposals to make Ethereum Classic more self-sufficient and sovereign, such as the proposed creation of a community treasury.
ETH vs ETC – Conclusion
So, who among the two brothers-at-arms has the upper hand in our Ethereum vs Ethereum Classic comparison guide, and have we come to a conclusion on an outright winner? In this pitched battle between two blood siblings, we have nominated Ethereum as the victor of this fight, and one that it deservedly wins. Although Ethereum is in itself in the midst of heated competition with countless other blockchain protocols, there's a good reason why they're the top blockchain for utility.
Ethereum has carved itself a massive reach in the wider world of the global blockchain ecosystem, with exposure in practically every single market, from facilitating trust-less loans to helping artists mint multi-million dollar artwork. There are social network platforms, gambling sites, prediction markets, and more built on Ethereum, not to mention the many other blockchains out there that won't be able to run if it wasn't for the Ethereum blockchain powering them.
There are good merits to believe that Ethereum's status quo will be hard to challenge. That said, however, it's unfair to conclude that Ethereum Classic is an outright loser in this regard. Its strong belief in the values of data immutability gives hope that the blockchains of the world can evolve to be robust and secure in a way that no one will ever be able to manipulate or control the data within them. Combined with a hopeful roadmap, and we could certainly see more come out of the lesser-known of the two Ethereums.