~ Token issuance, Digital currency, Platform, Smart contracts, Build Apps.
The best way to understand what Ethereum Classic is and how it came into existence is to examine the history of Ethereum. The Ethereum blockchain is mainly used for smart contracts which are programmable agreements between different parties. With smart contracts, money can easily move from one party to the other without requiring intermediaries.
All parties involved in a transaction trust that the code is legitimate and it will release the funds when specific conditions are satisfied. The DAO or Decentralized Autonomous Organization was launched on the Ethereum network in April 2016. It had quite an impressive purpose but was an extremely complicated smart contract. It was one smart contract that was going to revolutionize Ethereum.
The DAO was supposed to be a decentralized venture capital fund that would fund future decentralized applications to be created in the Ethereum ecosystem. The purpose of the DAO was to provide a pool of funds that would be used for the development of DApps built on the Ethereum ecosystem in the future.
This idea was straightforward but it was not easy to create. Those who desire to have voting rights in the DAO would have to purchase special tokens. Those who desire to purchase the DAO Tokens would need to use ether which is Ethereum’s native currency. By owning DAO tokens, you also qualify to be part of the decision-making process that determine the DApps that would get the funds as well as the ones that didn’t.
So, DApps owners would need the approval from a collection of popular experts and developers on the Ethereum network before their DApp can be approved. Once a project receives a minimum of 20 percent of votes cast by contributors to the DAO, then the funds will also be released and developers can now continue with work on the project.
The truth is that the DAO was an excellent and revolutionary proposal that investors loved right from the moment it was made. The flexibility and transparency offered by the Ethereum system attracted many investors and within the first month the DAO tokens were sold, it already raised a substantial number of ETH which at the time was estimated to be $150 million — 15 percent of all ether in existence.
Also, those behind the project were careful enough to create an exit option to prevent investors from being trapped especially when ridiculous projects they don’t want to be a part of are approved by the community. This opt out option was called “Split function.” The function would enable investors to reclaim their Ether and even create something called “Child DAO.”
So, in the event that more DAO members choose to join you, then you could end up accepting ideas for DApps and also allocate funds for the developers to work on the DApps. But the members that left would only be able to spend their ETH after 28 days. Well, many developers believed this was a loophole and the issue was immediately raised. Unfortunately, the creators of the DAO failed to take their protests seriously and those loopholes were exploited in June 2016.
The DAO Attack
An enterprising hacker was able to steal about one-third of the funds that were kept in the DAO smart contract. Well, this would have been a payday for this hacker who was about to escape with about $50 million at the time. This news caused many investors to sell their ether leading to a crash in the price of the coin since they felt that this was the end of Ethereum.
Well, the 28-day clause that was programmed in the smart contract was still effective and the hacker could do absolutely nothing with the $50 million until the end of 28 days. This was all the time the Ethereum community needed to consider possible solutions to the problem and complete their solution. They were faced with three ideas:
· Embrace the survival of the fittest approach by doing nothing. Making the whole experience serve as an expensive lesson.
· A hard fork
· A soft fork
The option of a hard fork would mean that nothing can be changed once the fork is completed unlike the soft fork which is backward compatible. The proposed hard fork meant splitting the Ethereum network at some point and the point would be just before the DAO attack. The purpose of the hard fork at this point is to refund all missing funds due to The DAO attack but the idea was very controversial amongst members of the Ethereum community.
Some maintained the stance that “code is law” and that no single authority should control it and on the other hand, many simply wanted their money back. So, the members of the community who believed that “code is law” chose to continue with the old version of the Ethereum software and that’s what we now know as Ethereum Classic.
Others who were in support of a refund proceeded to mine the newly formed chain after the hard fork and this led to the creation of two currencies where one initially existed. So, we can see Ethereum Classic (ETC) as the unaltered version of the chain while the new one which has The DAO attack refund is Ethereum or ETH and it’s the one that enjoys the support of most lead developers as well as that of most members of the community.
So, what is Ethereum Classic?
It’s just the original chain that refused to change in order to allow the refund of The DAO attack money. Those who stayed with Ethereum felt that the hard fork served the opposite of what blockchain was originally designed to do since it was initiated to protect rich investors.
Those in support of ETC believed that making changes to the entire chain because of a hack means that blockchain can easily be influenced by human whims which doesn’t resonate with crypto-idealists. You can trade ETC in almost all the exchanges where ETH is listed like Binance, Bittrex, OKEX, and Huobi Global.
Although major Ethereum developers left after the hard fork, Ethereum Classic has received the support of big hitters such as the CEO of Grayscale, Barry Silbert. But as a result of the lack of backward compatibility, those in Ethereum classic won’t gain access to updates carried out by Ethereum. Many also see Ethereum Classic as a kind of attack against Ethereum. Since it’s a minority chain, ETC has suffered several 51 percent attacks with the most recent one taking place on August 2020.
When it comes to the use cases of Ethereum Classic, it is almost the same as Ethereum as the two are smart contract platforms where developers can create their DApps. It’s interesting to note that Ethereum Classic has managed to make a spectacular comeback from what we could regard as disaster. The project appears ready to fulfil all the expectations people had in it when it was first created. Learn more about various crypto projects by reading “The Digital World of Crypto Riches.” You will get to know more about over 100 different digital assets, their achievements, use cases and challenges.
~ The official website of Ethereum Classic is https://ethereumclassic.org/
