Authentic ETH: Explaining the Ethereum Classic Blockchain 

Ethereum (ETH) is one of web3’s greatest success stories, but it wasn’t always smooth sailing for the world’s second-largest cryptocurrency. At one point, there were serious questions over Ethereum’s security, and some developers doubted the blockchain’s long-term survival. This period in Ethereum’s past was so pivotal and controversial that it resulted in the birth of a separate blockchain: Ethereum Classic (ETC).

Although Ethereum Classic hasn’t grown as large as Ethereum, it remains a popular cryptocurrency protocol with a passionate community of developers and crypto traders who actively follow the Ethereum Classic coin price.

Ethereum Classic’s history

Technically, Ethereum Classic’s backstory begins with Ethereum’s launch in 2015, as Ethereum Classic is based on the original version of Ethereum. Ethereum Classic was never meant to be a separate decentralized network, but a momentous hack in 2016 led to its creation. That year, the Ethereum Network raised $160 million in the first experiment in a community-run, onchain treasury called the “decentralized autonomous organization” (DAO). Shortly after the DAO was in operation, a hacker noticed a flaw in the protocol’s code and used this info to steal $60 million from traders. 

Due to the DAO heist’s high profile, some Ethereum developers proposed creating a separate blockchain (aka a “hard fork”) to undo the hack data and restore the crypto funds to affected users. On the other hand, some Ethereum programmers argued that any outside intervention went against the “code is law” ethos of blockchain technology. If Ethereum patched up the DAO hack, what precedent would it set, and how was cryptocurrency different from centralized institutions? 

Instead of reaching a unanimous decision, the first camp splintered off to launch the Ethereum hard fork, which created the Ethereum Classic blockchain. The primary difference between Ethereum and Ethereum Classic is the former rewrote the payment data and code surrounding the DAO hack, while the latter still has the hack data on its payment ledger. 

How does Ethereum Classic work?

Ethereum Classic runs using the same Proof-of-Work (PoW) algorithm the Ethereum blockchain used before it switched to a Proof-of-Stake (PoS) algorithm in 2022’s “Merge” update. Similar to other PoW blockchains like Bitcoin (BTC), the computers (aka nodes) on Ethereum Classic’s blockchain compete non-stop to solve math puzzles and post the latest batch of transactions on the blockchain. The first node to solve these algebraic equations receives newly minted (or “mined”) ETC coins and a portion of trading fees as compensation for their efforts. 

The Ethereum Classic blockchain welcomes third-party developers to create decentralized applications (dApps) on top of its blockchain using automated commands known as “smart contracts.” Each smart contract has pre-coded instructions and automatically fulfills its task when it recognizes a specific “state” on the blockchain, making it possible to create an intermediary-free web-based experience. Programmers interested in decentralized finance (DeFi), web3 gaming, or non-fungible token (NFT) collectibles have the tools to build their projects using Ethereum Classic as a base layer. 

Ethereum Classic FAQs

What is the purpose of the ETC coin?

ETC is Ethereum Classic’s native cryptocurrency, and it serves all the same functions as Ethereum’s Ether coin (ETH) on the Ethereum blockchain. Namely, crypto traders use ETC to pay for transaction fees (aka gas fees) when making transactions, which then go to node operators as an incentive to secure the network. Crypto traders also use the Ethereum Classic price for speculation using real-time Ethereum Classic price charts to monitor its exchange rate.

Are Ethereum wallets the same as Ethereum Classic addresses? 

Although Ethereum and Ethereum Classic share the same root software, they’re separate blockchain networks. If a crypto trader tries to send ETC to an ETH wallet—or vice versa—the receiving network won’t understand the incoming message, resulting in lost cryptocurrency. 

Is Ethereum better than Ethereum Classic? 

Whether Ethereum is “better” than Ethereum Classic is subjective, but in terms of market cap and developer activity, Ethereum is the more influential of the two blockchains. However, many passionate supporters of the Ethereum Classic blockchain believe its commitment to “code is law” and PoW mining make it a superior option for developers. Whether traders or programmers favor Ethereum versus Ethereum Classic largely depends on their technical requirements and preferences. 

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