Ethereum or Ethereum Classic? Analyzing the similarities, differences, and challenges

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Ethereum is the second cryptocurrency by market capitalization after Bitcoin, but their ways of mining coins are considerably different. While Ethereum relies on staking, which doesn’t require extensive hardware, Bitcoin leverages the power of worldwide miners and mining farms in order to continue the scarcity process. Additionally, each project has different coin supplies, as Bitcoin is capped at 21 million tokens, whereas Ethereum’s supply is not limited.

However, despite their distinctions, these two cryptocurrencies rule the market and have established themselves as secure and safe investments for traders. According to the latest ETH price prediction, the following five years will show an increase of at least 5% in value, so the asset won’t be overpowered by other altcoins. 

But Ethereum is much more complex than its prices. Besides the Ethereum we know of, there is also Ethereum Classic, a side project that aims to execute smart contracts. But why was it needed in the first place? Let’s find out more.

On Vitalik Buterin’s initial Ethereum project

Programmer Vitalik Buterin, along with his co-founders, launched the Ethereum project in 2013 as an alternative to Bitcoin, aiming to set the tone for creating decentralized applications and expanding the ecosystem. It succeeded by providing access to non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and token standards, enabling developers to create unique cryptocurrencies.

The most notable aspect of the Ethereum timeline is its adoption of a changing consensus mechanism, making it the first blockchain to implement such an update. The increasing number of users on the blockchain has caused network congestion and high transaction fees, resulting in difficulties using the platform. The reason was the Proof-of-Work consensus, which became obsolete, and the solution was the transition towards the Proof-of-Stake mechanism. However, before the Merge, another solution was deployed to manage Ethereum’s issues.

Ethereum Classic is an edited version of the original blockchain

Ethereum Classic originated as a result of a hack on the Ethereum ledger. In 2016, a hack infiltrated third-party applications on the blockchain, resulting in the theft of millions of ether. The immediate action was a hard fork to reverse the hack, which resulted in the separation of the ledger into two blockchains: one became Ethereum Classic.

The blockchain is a copy of the original protocol, but its primary purpose revolves around enabling the creation of decentralized and smart contracts with the aid of a Turing-complete virtual machine, similar to Ethereum’s EVM (Ethereum Virtual Machine). The blockchain also relies on a cryptocurrency, allowing people to invest in it; however, its value is not comparable to Ethereum’s when it comes to trading.

What are the differences between ETH and ETC?

There are several aspects that help people distinguish between the Ethereum-based projects. For instance, while both platforms are scalable, Ethereum is superior and can handle more transactions at higher speeds. The same applies to security, but decentralization is at relatively the same levels on both ledgers.

When it comes to immutability and censorship resistance, both blockchains struggle to achieve these goals while maintaining decentralization, given the blockchain trilemma in cryptocurrency. Therefore, Ethereum Classic is a less developed version of the original blockchain. However, it remains useful in terms of development and innovation.

The challenges present within the Ethereum technology

Ethereum and Ethereum Classic are part of an extensive ecosystem within the cryptocurrency industry, but they’re relatively new in the tech timeline, so the developers behind them struggle with several aspects. Interoperability, for example, is one of the most pressing issues, as bridging Layer 2 solutions is difficult but necessary to merge operations and transactions.

Improving the usage of decentralized apps and wallets is also an issue, since the user experience can hinder accessibility and expansion. While there have been attempts to settle this matter through updates like EIP-7702, implementation takes time to occur.

Scalability and gas fee reduction are also important to handle. As the network expands and more users become present and active on it, ensuring security and performance at the same level while withstanding a growing number of transactions becomes increasingly difficult. Hence, making Ethereum more affordable while limiting load is a priority.

What is the future of Ethereum?

Ethereum is the second most well-known and biggest cryptocurrency on the market, surpassing many other successful projects due to its impressive audience and technologies. Therefore, it will be a crucial component in the process of Web3 adoption and the acceptance of crypto and blockchain, as it supports the development of innovative solutions.

If Ethereum can outperform its competitors, including Solana, it can demonstrate its value. Still, they can both go through rough patches as assets, according to Binance.com Research, “The launch of ESK marks a milestone for institutional crypto access in the U.S., combining Ethereum exposure with staking rewards in a regulated ETF format. This product simplifies yield generation and signals rising mainstream demand for crypto-integrated financial products.”

The last decade of Ethereum has been foundational to its growth, and the next decade is just as important. Ethereum will focus on decentralization by bringing it closer to the worldwide population, while becoming a valuable investment in terms of tokenization technology.

What about Ethereum Classic?

Ethereum Classic is not a prominent investment or trading item, so its future may be limited to supporting the main network’s efforts to achieve decentralization, scalability, and security. Smart contracts are expected to become more widely used by companies that can benefit from faster transaction times and improved collaboration, as well as participate in technological innovations.

Ethereum Classic is only one of the many pillars on which Ethereum was built; therefore, it is essential to the underlying system. Layering solutions, hard forks, and ERC-20 tokens are all essential to Ethereum, so they might merge within the ledger or continue operating independently to help other blockchains as well.

Final considerations

Ethereum is a well-known cryptocurrency and blockchain revolutionizing the market, while Ethereum Classic is a crucial smart contract solution for maintaining functionality within the main ledger. Both have several things in common, but the difference lies in the level of tradability between the two coins and their future roles in bringing decentralization closer to worldwide adoption. Perhaps there would be no Ethereum as we know it today without the Ethereum Classic fork.