When Ethereum hard-forked to resolve the hack from the infamous DAO error, two brands of Ethereum emerged: Ethereum and Ethereum Classic. Ethereum Classic continued to mine the old Ethereum chain so as to not compromise on immutability. The battle of Ethereum vs Ethereum Classic has died down in recent years, with Ethereum Classic struggling to keep up with the Ethereum backed by Vitalik Buterin.
Here is what you need to know about the two competing chains.
How the battle began
The creation of the two chains was the result of a hack on Ethereum’s Decentralised Autonomous Organisation (DAO) that resulted in 11.5 million Ether being stolen. Ethereum was still in its early stages, and to be faced with such a huge scandal at the time led to many questions being asked. First and foremost, how did this happen and what should they do now?
One of the strengths of blockchain technology is supposed to be immutability – that the chain cannot be changed and keeps a track of all records. When the hack happened, many believed that the fix was to perform a rollback on the chain to reverse transactions. This would mean that those who invested in the DAO could receive their initial investment back as if it never happened.
The issue with this solution is that it would remove the immutability of Ethereum. If the developers rolled back the blockchain, what is to stop them rolling it back in the future if another disaster strikes? Buterin and the Ethereum community argued that because Ethereum was still relatively young, it was necessary to proceed with a rollback.
The two teams
Ethereum Classic’s main backer is Digital Currency Group CEO Barry Silbert, with some mockingly referring to Ethereum Classic as Silbert’s coin. There are also two other development teams working on Ethereum Classic called IOHK (although they also work on another competitor called Cardano) and Ethereum Classic Labs.
Much of Ethereum’s development comes from the Ethereum Foundation headed by Vitalik Buterin. Vlad Zamfir is also part of the Ethereum Foundation and is best known for helping introduce Casper, an upgrade to the Ethereum protocol that will eventually help Ethereum move to a Proof-of-Stake consensus mechanism.
As the two chains are obviously similar, it will be difficult for Ethereum Classic to bring about revolutionary upgrades considering these could then be added later on to the Ethereum chain anyway. How Ethereum Classic will reverse the battle they are currently losing looks extremely difficult.
The ICO phase
During the bull run of 2017, hundreds of ICOs were announced. Many of these ICOs were run through the Ethereum platform, which helped to increase the price of Ethereum (as to participate you had to buy Ether tokens).
As this idea soon caught on, many new platforms emerged with similar ideas such as Cardano and EOS. This was detrimental to Ethereum Classic as not only did it have very few ICOs, but it also found itself competing with the newcomers on the block as well as Ethereum.
Since the fork, the price disparity between the two chains has widened greatly. Whilst Ethereum managed to reach highs near $1,000, Ethereum Classic could only reach double figures. Indeed, Ethereum is still trading more than double Ethereum Classic’s all-time high.
Ethereum Classic’s price is currently in single figures, highlighting that Ethereum is currently winning the battle between the two forks. Considering both chains are competing for the same market, one could expect the price disparity to be closer.
Whilst the Bitcoin and Bitcoin Cash fork created a lot of vitriol within the two communities that continues to this day, the Ethereum split has turned out to be a lot more civil. Most likely this is because there appears to be a clear winner in Ethereum that has moved on dramatically since then, whilst Ethereum Classic has struggled to gain momentum.
Although the battle is not quite over yet, Ethereum looks to be the cryptocurrency with the price action, momentum, and future developments, whilst Ethereum Classic looks very much to be struggling to stay afloat.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.