Table of Contents
- What Is Ethereum Classic (ETC)?
- Key Takeaways
- Understanding Ethereum Classic (ETC)
- Fast Fact
- History of Ethereum Classic
- Concerns About Ethereum Classic
- Future of Ethereum Classic
- Important
- Ethereum Classic vs. Ethereum
- Does Ethereum Classic Have a Future?
- Can Ethereum Classic Reach $10,000?
- Is Ethereum Classic a Good Buy?
- The Bottom Line
What Is Ethereum Classic (ETC)?
Let me explain Ethereum Classic (ETC) to you directly: it's an open-source, decentralized, blockchain-based distributed cryptocurrency platform that runs smart contracts. I want you to know that Ethereum Classic was established in 2016 after the decentralized autonomous organization (DAO), which used smart contracts on the Ethereum blockchain, got hacked. The original blockchain split into two, with most users deciding to reverse the hack and return the stolen funds. Ethereum Classic and Ethereum share the same roots in code but differ in technical and philosophical ways.
Key Takeaways
You should remember that Ethereum Classic is an open-source, decentralized, blockchain-based distributed cryptocurrency platform that runs smart contracts. It's the original Ethereum blockchain, created after The DAO hack in 2016. A dispute split the Ethereum community, with the majority choosing to reverse the hack, while Ethereum Classic rejected that reversal.
Understanding Ethereum Classic (ETC)
Ethereum Classic is a blockchain platform, and I'll tell you how it works: it facilitates smart contracts that automate actions via the blockchain. For instance, if you agree to sell an item for a specific price to someone else, the smart contract automates the payment and transfer of ownership, so you don't need to trust that either party will follow through.
As I mentioned, the blockchain split into ETC and Ethereum after a hacking incident, revealing philosophical divisions in the Ethereum community. Based on the idea that code is law, a small group of developers and miners believed DAO investors should face the consequences of a flawed project. But the majority rolled back the blockchain, basically bailing out the investors.
Since the split, there have been many upgrades to the ETC project. The goal remains to become a global payment network using smart contracts without centralized governance. Like other cryptocurrencies, Ethereum Classic aims to be a digital store of value that you can save, exchange, and retain value with.
As of June 15, 2024, the maximum supply of ETC is 210.70 million coins, with 147.5 million in circulation, and its market capitalization stands at $3.78 billion.
Fast Fact
Similar to Bitcoin, Ethereum Classic records transactions of value and can act as a distributed computer to run self-executing smart contracts.
History of Ethereum Classic
Ethereum was conceived by Vitalik Buterin and the Ethereum Foundation, launching in 2015. The blockchain used its native token ether (ETH) for transactions and quickly became popular for initial coin offerings (ICOs), where teams launched their own tokens.
One successful ICO was The DAO, a decentralized venture fund where investors voted on investments. It accumulated over 11 million ETH from more than 18,000 investors before hackers exploited a smart contract bug to withdraw about one-third of the funds.
Due to the hack's scale, many proposed reversing the Ethereum blockchain to rescue investors, while others argued it would set a bailout precedent. About 85% of miners switched to the hard fork.
This led to the Ethereum blockchain splitting into two networks. The newer one kept the name Ethereum and the token ETH. The older one became Ethereum Classic, using ETC as its symbol. After Ethereum's 2022 proof-of-stake integration, miners migrated to ETC, and developers have built several apps on its virtual machine.
Concerns About Ethereum Classic
Although Ethereum and Ethereum Classic both offer smart contracts and target the same market, Ethereum is far more popular. Its ETH is second only to Bitcoin in value among cryptocurrency networks.
One major concern for Ethereum Classic is its scalability limitations. The network handles between 10 and 20 transactions per second, much less than traditional payment networks. Despite software upgrades, scalability remains a key challenge for its payment systems.
Cryptocurrency regulations are evolving, which could affect how Ethereum Classic and other networks operate.
Future of Ethereum Classic
The future of ETC looks less promising than Ethereum's, as Ethereum dominates in popularity.
ETC hasn't gained much market traction, losing share to cryptocurrencies like Bitcoin. It continues trading on exchanges and is mined by the community, holding a solid base of traders and fans.
Like Ethereum, ETC has an improvement proposal process and has undergone upgrades, including compatibility with Ethereum's changes. Demand for ETC remains strong, so it could stay a competitor in the space.
Important
Investors can start trading spot Ether ETFs following SEC approval in May 2024, on exchanges like NYSE, Nasdaq, and CBOE BZX.
Ethereum Classic vs. Ethereum
A key difference is that Ethereum Classic kept its proof-of-work mechanism and competitive rewards from before Ethereum's merge, so you can mine ETC tokens, unlike Ethereum's.
Ethereum has no limit on token issuance, but Ethereum Classic caps at 210.7 million coins. Every five million blocks, ETC undergoes a fifthening, reducing block rewards by 20% every two years, similar to Bitcoin's halving. The last one in June 2024 dropped rewards to 2.048 ETC.
This reward reduction will continue, with 95% of ETC mined by 2059.
Does Ethereum Classic Have a Future?
Ethereum Classic has survived ups and downs since forking from Ethereum. It continues to be developed with a consistent base of traders, investors, and users. Its future depends on maintaining its position as an attractive cryptocurrency and blockchain.
Can Ethereum Classic Reach $10,000?
Predicting cryptocurrency prices is tough, just like any security. ETC could hit $10,000, but it might also collapse to zero.
Is Ethereum Classic a Good Buy?
It depends on your outlook, preferences, risk tolerance, market performance, entry point, and trading strategy. You might hold it long-term or keep it short-term in your portfolio.
The Bottom Line
Ethereum Classic forked from Ethereum in 2016, maintaining the original blockchain before the community rolled back the state after thieves stole millions from investors.
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