Ethereum (ETH) and Ethereum Classic (ETC) both sound similar and have a lot in common. But how did Ethereum Classic come into being and how does the digital currency differ from Ethereum?
Ethereum Classic (ETC) is not a new crypto currency, but one created by a spin-off, a so-called „hard-fork“. Ethereum and Ethereum Classic share a blockchain up to block 1920000, after which the paths split.
The reason for the spin-off was a refund of DAO Token.
The DAO „Hack“
What is DAO?
The decentralized autonomous organization (known as DAO) should bring together decentralized investors to invest in (decentralized) projects. The investors would have participated in participations, dividends, etc. could earn money and the projects would have gotten a sponsor.
The DAO would also have become an experiment on the thesis „The Wisdom of the crowd“. Unfortunately, this experiment turned out to be nothing.
The DAO of Bitcoin Code
The DAO, programmed as a smart contract at the Ethereum Blockchain, Bitcoin Code was announced in May 2016. Interested parties could participate by sending Ether to an address and receiving DAO tokens in return. In total, the DAO consisted of more than USD 150 million.
The back door
The DAO was equipped with a kind of back door for investors, a „split function“ that investors could use to leave the DAO.
On 18 June, this back door became a disaster. One „attacker“ managed to get 3.6 million ethers via this backdoor.
After this disaster for the developers of the DAO and the investors, several plans for further action were discussed (sometimes violently).
From Soft- to Hard-Fork
At first a soft fork was planned. This would have prevented the hacker from paying out the 3.6 million ethers. However, it was not possible to perform this soft fork.
From Soft- to Hard-Fork to Bitcoin Trader
That’s why we needed a hard-fork. The smart „DAO“ contract would be changed into a „payout contract“ by Hard-Fork. Investors got their initial investment back and the DAO chapter would be ended. But the hard-fork was controversial. Both sides call it scam had their Bitcoin Trader arguments:
Some arguments against a hard-fork:
„Code is law.
Once you change something on the blockchain, you have to do it again and again.
The blockchain is unchangeable and should always remain so
Some arguments for a hard-fork:
Too many ethers would be in the hands of a harmful stranger
A hard-fork offers the government and judiciary no reason to intervene
This block can be seen as a kind of „Genesis block“ for Ethereum Classic. The hard-fork took place with this block and about 89% support the hard-fork. The remaining 11% refused to participate in the hard-fork. ETC was born.
Ethereum vs. Ethereum Classic | The Differences
Ethereum Classic vs Ethereum is more than just the DAO incident.
For example, Ethereum Classic has three independent, decentralized teams working on ETC
ETC remains with proof-of-work algorithm, i.e. ETC can be mined longer
There will be a maximum of 230,000,000 ETC
ETCDEV works on „sidechains“ and the Internet of Things
ETC is particularly popular in South Korea and China
Buy Ethereum Classic
Ether and Ether Classic addresses are similar, so be careful where you send your Ether Classic.
The best place to go for Ether Classic shopping is the Anycoin exchange office*. In just a few minutes you can create a user account there – but of course always with a secure password and two-factor authentication!
The German-speaking exchange office lets you buy Ether Classic quickly and easily.
Alternatively, you can purchase Ether Classic from Binance*. The good thing about Binance* is that you don’t need verification if you want to pay out less than the equivalent of two bitcoins.
Once you have created an account with two-factor authentication and strong password, you can deposit Bitcoin, Ether or any other currency offered. Binance offers the pairs BTC/ETC and ETH/ETC, i.e. you can buy ETC with Bitcoin or Ether.
When making a Bitcoin deposit, you should be aware of the transaction fee. Save on transaction fees and transfer a faster and cheaper digital currency to Binance. You can then convert them to bitcoin or ether on Binance and then purchase ETC.