What is ETC and how does it work?

main page » What is ETC and how does it work?

In recent years, Ethereum has emerged as a leading player in the crypto space. This can be seen, for example, from the fact that the functioning and development of most common altcoins is based on this network. Still, few people know that there is a big brother of Ethereum called Ethereum Classic. So what made ETH a huge success that ETC couldn’t replicate? We invite you to read!

Often referred to as the older brother of Ethereum (ETH), ETC is the result of the community split around son Vitalik Buterik. But how did this happen? What were the consequences?

The emergence of Ethereum Classic

To understand ETC we have to go back to 2015 when Ethereum was founded. The goal of this project was to create a blockchain platform that would allow the programming of smart contracts. However, in 2016 there was an incident related to the DAO, which is a decentralized autonomous organization that raises funds to fund Ethereum-based projects.

The hackers exploited a vulnerability in the DAO code that allowed them to steal a significant portion of the funds collected. In response to this incident, part of the Ethereum community decided to perform a hard fork, i.e. a protocol change aimed at reversing transactions related to theft and returning the stolen funds to their owners. This new division of the blockchain became known as Ethereum (ETH).

However, part of the community refused to reverse the transaction and compromise the immutability of the blockchain and decided to keep the original chain as an independent cryptocurrency. This is how Ethereum Classic (ETC) came into being. In the case of ETC, the “code is law” principle is key, meaning that the code is immutable and the transactions performed on it are irreversible.

As for Vitalik Buterin’s stance on the whole situation, it’s worth noting that some members of the Ethereum Classic community are somewhat disappointed with his decision to intervene in the immutability of the blockchain. Therefore, some of them may feel some distance from the creator of ETH.

How does the ETC work?

ETC works on principles similar to Ethereum. It is a blockchain platform that allows you to create and run smart contracts. Smart contracts are computer programs that “run” automatically when certain conditions are met. Thanks to them, it is possible to create various blockchain-based applications, such as cryptocurrency exchanges, voting systems or crowdfunding platforms.

Like Ethereum, ETC relies on Proof of Work (PoW) for consensus and transaction verification. ETC network users can mine new cryptocurrency units and participate in the transaction verification process and network maintenance by sharing computing power.

How is ETC different from ETH?

The main difference between Ethereum Classic and Ethereum is their approach to blockchain immutability. Ethereum Classic does not allow any intervention in the transaction history. This means that no institution or group can reverse or amend transactions made on ETC.

In the case of Ethereum, which was created after a hard fork, an intrusion into the blockchain was used to recover the stolen funds. This intervention sparked controversy in the cryptocurrency community and led to a split between Ethereum (ETH) and Ethereum Classic (ETC).

Another difference between ETC and ETH is their community and development as well. Ethereum has a much larger community and developer support, which means more projects and applications are being built on this blockchain. Ethereum is also enjoying greater popularity among investors and users.

Although Ethereum Classic has not achieved the same success as Ethereum, it still has its own unique characteristics and group of supporters. The project is evolving and trying to find its place in the cryptocurrency ecosystem. As a precaution, the text was by no means intended to downplay ETC’s market share.

Mainly because Ethereum Classic has introduced various improvements, such as security and scalability fixes, in recent years to attract more users and developers. However, the competition in the decentralized finance (DeFi) space is fierce, requiring ETC managers to constantly change their design to adapt to the ever-growing needs of the crypto community.

Thank you for reading! For those who have arrived here, we have prepared the “HAJS” code, which reduces the transaction in exchange points by 0.25% (valid until July 6!).

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