Ethereum Classic (ETC) is a cryptocurrency that was created in 2016 as a result of a contentious hard fork of the Ethereum blockchain. ETC is the original version of Ethereum that retained the pre-fork codebase. It operates on a decentralized blockchain platform, enabling developers to build decentralized applications and smart contracts. ETC uses a proof-of-work consensus algorithm.
ETC is a decentralized platform. Its forerunner, Ethereum, ETC is a decentralized platform that enables programmers to create smart contracts and decentralized applications (dApps). The supply of ETC is fixed, Unlike conventional currencies, which can be printed or coined as needed, the total amount of ETC is limited to 210 million, and it is created to have a fixed supply. ETC is traded on a number of exchanges. Ethereum Classic can be bought, sold, and held in a selection of cryptocurrency wallets and exchanges.
The DAO Hack
The DAO breach, which took place in June 2016, gave rise to Ethereum Classic. On the Ethereum blockchain, a decentralized autonomous organization called the DAO was developed. It effectively functioned as a smart contract that let investors pool their money and decide how to utilize it. A crowdfunding effort for The DAO resulted in ether donations totaling more than $150 million.
Unfortunately, a weakness in the smart contract was found and used by an attacker to steal more than 3.6 million ether, which was then worth over $50 million. The Ethereum community was deeply shaken and terrified by this attack, and the value of ether started to fall.
The Hard Fork
The Ethereum community disagreed on how to react to the DAO hack. While some members argued that returning the money to the investors would violate the blockchain’s immutability, others disagreed. A hard fork of the Ethereum blockchain was finally created due to the contentious discussion.
A hard fork was implemented by the majority of the Ethereum community, effectively resulting in creating a new blockchain that maintained the modified protocol. The name of this new blockchain is now Ethereum (ETH). The goal of the hard fork was to give the money back to the investors who had been hacked.
However, a small portion of the community chose to stick with the original blockchain because they were against the hard fork. This faction considered the hard fork to violate the blockchain’s immutability, which they saw as a sacred value.
Conclusion:
As a result, Ethereum Classic was created as a distinct cryptocurrency that maintained the pre-fork blockchain and used the original Ethereum source. With diverse communities and development teams, Ethereum (ETH) and Ethereum Classic (ETC) are currently two distinct cryptocurrencies.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational ideas only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/03/08/ethereum-classic-formation-of-the-hard-fork/