As new money floods the crypto space, an unexpected thing has happened. A hard fork of Ethereum known as Ethereum Classic has skyrocketed in price, despite having its network taken over by hackers 3 separate times so far.
It would seem that a blockchain as vulnerable and weak as Ethereum Classic’s should not be receiving this much hype from investors, but it is. In this edition of Benzinga Crypto, we’ll take a look at these 2 projects, and what May’s price action might suggest about the condition of the crypto market.
What is Ethereum?
Ethereum is a global computing network for building decentralized applications.
In English, this means that new financial markets and products can be built and run by a massive group of incentivized individuals. Instead of paying Amazon to host your exchange and not secretly steal your data, you can pay the Ethereum miners and instead rely on the trustless nature of blockchain.
To run your decentralized app (dApp) on the Ethereum chain, you’ll need to pay for the space you take up on this global computing network. This is called a gas fee in the Ethereum ecosystem, and is payable via the native token, Ether (ETH).
If you’re an investor who believes in a democratized financial future powered by blockchain you can invest in ETH, and look to make gains as demand for space on the top smart contract blockchain continues to grow. With an increase in demand for the Ethereum network, there is an equal increase in demand for ETH (and willingness to pay more for it) as it’s needed to get access.
What is Ethereum Classic?
Ethereum classic is the original version of the Ethereum blockchain. After 3.6 million ETH were stolen in 2016, the developers made a controversial decision to hard fork and return the stolen funds. The hard fork with the returned funds became Ethereum, and the original chain with the hacked funds became Ethereum Classic. Development for Ethereum has grown exponentially since then, and it takes place on the Ethereum chain we know and love today.
There is a niche group of people that think this is unfair, and claim that “code is law”. Their argument is that since the developers reverted the code, they broke the law. These people have decided to work on Ethereum Classic instead, with the goal of preserving the Ethereum (now, Classic) blockchain as they believe it should be.
Not a whole lot of exciting things have happened on Ethereum classic as far as new developments or progress towards being the better Ethereum. They have however, been hacked and robbed 3 times so far in 2021. This should not come as a surprise, as the hashrate (combined computing power of the miners) for Ethereum Classic is much, much lower than Ethereum. It’s so low, in fact, that Dogecoin beats it by 10 times. Yikes.
Similarities Between Ethereum and Ethereum Classic
Ethereum and Ethereum classic used to be 1 in the same. Now they have split and evolved new, separate aims. The main similarity between the 2 is that they are both still decentralized computing platforms. They are also both being actively developed, albeit by drastically different sized teams.
Differences Between Ethereum and Ethereum Classic
Ethereum has been working hard on converting the network to a proof of stake (PoS) consensus model. Consensus is how blockchains separate real data from fake data across a global network of miners. Currently, the network uses the proof of work (PoW) consensus model designed by Bitcoin’s creator Satoshi.
Proof of work requires the miners to compute some hard problem. This costs them money in energy, which decentivises fraudulent behavior. This system works well for Bitcoin, but much better, more eco friendly and more secure alternatives have been designed since then. Primarily proof of stake, which replaces miners with validators, who stake their crypto on the network in exchange for the right to authenticate activity and earn the network gas fee associated with it.
The Ethereum foundation has been hard at work converting from PoW to PoS for many years, while Ethereum Classic has no such intentions. While Ethereum continues to dominate the DeFi industry, Ethereum Classic will continue to process transactions, use proof of work and get 51% attacked.
Where to Buy Ethereum and Etherum Classic?
Ethereum is available on all everywhere including Coinbase, eToro, Robinhood and Gemini. If you haven’t made an account with any of these centralized exchanges, click the link below to get started. Since these companies are US-based you’ll have to follow SEC regulations, and provide basic information such as your name, date of birth, SSN and a photo of your diverse license. Ethereum Classic is available in most places where you can find Ethereum, including Coinbase and Kraken.
People Also Ask
What is Ethereum Classic?
1
What is Ethereum Classic?
asked
Logan Ross, President, Wolverine Blockchain
1
Ethereum classic is the original version of Ethereum that was almost entirely abandoned after a hack in 2016 that led to 3.6 million ETH falling into the wrong hands. A hard fork returned the stolen money and continued forward as Ethereum, while the old version left the stolen money unreturned and became known as Ethereum Classic.
answered
Benzinga
Is Ethereum Classic better than Ethereum?
1
Is Ethereum Classic better than Ethereum?
asked
Logan Ross, President, Wolverine Blockchain
1
Ethereum Classic has a much smaller and less active development team, as well as a smaller network of miners. This means that Ethereum Classic is much easier to hack, and has already been hacked 3 times this year.
answered
Benzinga
Gemini builds crypto products to help you buy, sell, and store your bitcoin and cryptocurrency. You can buy bitcoin and crypto instantly and access all the tools you need to understand the crypto market and start investing, all through one clear, attractive interface. Gemini Crypto Platform offers excellent account management options. You can manage your account at a glance, view your account balance 24-hour changes and percent changes. Get started with Gemini now.