A better look at Ethereum Classic
Here at Crypto Caverns, we’re researching a variety of coins as we look toward expansion. And as we research, we’ll be keeping you in the loop on some standouts, and telling you a bit about them.
Next up is Ethereum Classic (ETC). Ethereum Classic is an open-source, decentralized, blockchain-based distributed cryptocurrency platform that runs smart contracts — which are autonomous self-executing code blocks that trigger certain actions based on predefined conditions.
Ethereum Classic supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a public Ethereum Virtual Machine (EVM).
The ETC network was formed in 2016 following the infamous DAO attack, an ideological and technical split within the Ethereum community. In 2016, German startup Slock.it launched its DAO project on the Ethereum blockchain, raising $150 million from more than 11,000 investors, which made it one of the largest crowdfunding campaigns in history at the time.
But hackers found a loophole in its smart contract. A flaw in the code allowed the attackers to slowly drain funds from the main platform into other newly created DAOs.
This resulted in the transfer of 3.6 million Ether, valued at the time around $50 million. The funds were moved into an account subject to a 28-day holding period under the terms of the Ethereum smart contract, which meant they were not actually gone.
Members of The DAO and Ethereum community debated over what to do next. Some called the attack an unethical but valid maneuver. Others called for the Ether to be re-appropriated, and some even called for The DAO to be shut down.
On July 20, 2016 — in a move supported by Ethereum founders Vitalik Buterin and Gavin Wood — the Ethereum network was hard forked to move the funds in The Dao to a recovery address. Here, they could be exchanged back to Ethereum by their original owner. This resulted in the formation of the new Ethereum (ETH) chain.
But a section of the community remained opposed to the fork, referencing the “Code is Law” principle, which supported the idea that blockchains cannot be bent according to human wills and whims. So, this section remained on the old chain, which was then renamed Ethereum Classic, or ETC.
Because Ethereum Classic preserves the old code of the Ethereum blockchain as it was until The DAO attack, it is often viewed and described as the “original” Ethereum crypto. In September 2016, Poloniex de-listed DAO trading pairs, followed by Kraken in December 2016.
Ethereum Classic uses a proof-of-work mining algorithm, where miners are rewarded with new coins for validating the blockchain in competition with each other. The ETC block reward decreases with time.
Ethereum Classic has a total of 210.7 million tokens and 134.9 million in circulation. When Ethereum first debuted in 2015, it had around 72 million tokens. ETC can be purchased on most popular crypto exchanges — from Binance and Bitpanda, to Coinbase, WazirX and AtomicDEX.