Ethereum Classic is a twin cryptocurrency of Ethereum, which incorporates both smart contract (“Smart contract”) and decentralized applications (DApps). So what is Ethereum Classic used for? What are its strengths and limitations from the point of view of the investor and the trader? How to buy and store this cryptocurrency safely? Don’t panic, we will explain to you!
Definition of Ethereum Classic
Ethereum Classic is the original blockchain of Ethereumin other words, the chain of transaction blocks that existed even before Ethereum was created. It was named after the hard fork, that is to say the modification of the protocol that occurred in 2016 after a hack of the Ethereum network, which led to the separation of its blockchain into two versions: the original, Ethereum Classic, and a new blockchain, Ethereum.
Ethereum Classic uses an open source blockchain, that is, whose source code is free to access. The operation of its network is based on smart contracts, or smart contracts. This network, named EVM (Ethereum Virtual Machine), allows multiple scripts to be executed using a globally accessible network.
What is Ethereum Classic’s cryptocurrency?
Just like Ether is the currency issued by Ethereum, the blockchain’s cryptocurrencyEthereum Classic is thereEther Classic, whose initials on trading platforms are ETC. These Ether Classic tokens (or tokens) are also used to remunerate all the players who help make the blockchain work by solving the mathematical equations of the various transactions carried out: this is called mining.
What is Ethereum Classic used for?
More or less the same things as Ethereum: the creation of smart contracts and decentralized applications. This cryptocurrency, which is one of the best known in the sector, attracts a number of developers eager to get involved in this project. Individuals are also prime targets. Why ? Because Ethereum Classic allows the purchase and download of applications on an open source network at very advantageous prices.
How was Ethereum Classic created?
The birth of the Ethereum Classic results from a separation from the original Ethereum blockchain: a fork. This fairly widespread procedure in the world of cryptocurrencies aimed to circumvent the consequences of a hack of the initial blockchain. Back on a tumultuous and controversial arrival.
What is The DAO?
It all started in 2016 when a venture capital firm, The DAO, sold a smart contract on the original Ethereum network. The purpose of the development of this decentralized autonomous organization (DAO) was the funding of all decentralized applications developed in the ecosystem. Many investors have thus funded this project to the tune of $ 150 million.
June 17, 2016, a flaw has been located within the CAD system. A pirate manages to rush into the breach and steal 3.6 million Ethers from the ETH network, or a third of the funds devoted to The DAO project. Immediately, the Ethereum team plans to cause a hard fork (a fork in the language of Molière). The idea was to to return to invested investors their invested capital.
The controversy arose when other users simply refused the solution of reimbursing investors with a hard fork of the blockchain. Indeed, calling into question transactions that have taken place – although fraudulent – would have betrayed the immutable aspect of blockchain, the famous principle of “Code is Law” (The Code is the Law). In this sense, these users have detailed their arguments in the Ethereum Classic Declaration of Independence : “The code is the law; there will be no change to the Ethereum Classic code that would violate the immutability, fungibility or sanctity properties of the registry; transactions or registry history cannot for any reason be canceled or changed. ”
What are the consequences of the Ethereum hard fork?
In July 2016, a month after the fact, the hard fork nevertheless took place from the initial Ethereum codes. This operation did not prevent the other camp from wanting to continue on the first blockchain. Consequence: the coexistence of two projects, ETH being a new blockchain and ETC being the original blockchain. To learn more about this schism, you can directly consult this article on the Ethereum website.
Since that tumult, a new Ethereum Classic development team has continued the work. In accordance with their philosophical principle which refuses any powerful human influence, no leader emerges, so much so that he is regularly criticized for the ETC project not to have the least governance.
What is Ethereum Classic?
Concretely, Ethereum and Ethereum Classic blockchains are twins up to block 1920000. The functionalities remain identical as said previously (decentralized applications, smart contracts). However, the path separates after this key moment. This means that updates made since on ETH have nothing to do with those of ETC.
However, after months of divergence, the project incubator Ethereum Classic Lab, associated with Ethereum Classic, announced to want set up a bridge between Ethereum Classic (ETC) and Ethereum (ETH). This interoperability project between the two blockchains was carried out in close collaboration with the company Metronome, which issues the MET token. Thus, the possibility of exporting MET from a blockchain to another is an interesting first step that will allow Internet users to use one or the other depending on the handling and security. A first hard fork, called Atlantis, made it possible to set up this interoperability, which was then reinforced by the successful activation of the Agharta hard fork in January 2020.
Ethereum Classic benefits from this interoperability, since the most active developers and investors had chosen at the time to join the new blockchain, which had the immense advantage of reimbursing them.
How does Ethereum Classic work?
Ethereum Classic actors erect the code for the original project as untouchable. This immutability of the ETC project allows you to continue using the pre-existing features, that is to say those that were born before the famous block 1920000.
Ethereum Classic and smart contracts
A smart contract, or smart contract, is a computer protocol. Its function is to execute contracts automatically as soon as the conditions of said contract are respected. Defined in a programmed manner, they present a level of complexity specific to each.
For example, a smart contract can simply be based on a single condition such as “ if such a condition is true, then the contract can be executed ”. But it can just as easily contain a complex set of parameters leading to a possible partial or total execution of the contract.
While traditional contracts are limited to formalizing the terms of a relationship between several parties, smart contracts go further by ensuring that terms are fully respected. The execution of the contract is automatic as soon as the initial conditions previously drawn up are fulfilled.
Nor was its execution the result of interpretations, since only the code is decisive. Another significant asset: the costs. Indeed, a smart contract is much less cumbersome to manage than a conventional contract in terms of costs generated by the signing of the contract.
Smart contracts open up real prospects for development in the daily life of many business sectors, such as insurance, real estate and finance. And especially for decentralized blockchain applications. The big advantage of the smart contract: the electronic contract recorded in a distributed register (DLT) does not undergo any alteration, dispute or destruction. To learn more about smart contracts, do not hesitate to consult our article.
Proof of Work
Proof of work appeared with the mother of cryptocurrencies, namely the Bitcoin. For simplicity, the validation of a transaction on the blockchain requires the resolution of a mathematical equation. This work is carried out by a user, who makes available the capacities of his computer. To stimulate this functioning, the first user who succeeds in solving the equation receives remuneration. This is called mining (or “mining” in English).
Over time, the number of active users in this area has increased significantly. However, the degree of difficulty of mining continues to rise, as does the computing power required to validate a block. At the same time, and logically, the energy cost to mine increases. Another bias concerns mining pools, groups of miners who pool their computing power to grab the most ETC. This is where the proof of work accepts limits and that other mechanisms can replace it, with the objective of eliminating mining.
Proof of Work vs Proof of Stake
The principle of Proof of Stake, or in French proof of stake, is a system initiated by the blockchain DASH, and is based on the role of a masternode (a master node), which represents an interconnected computer with a copy of the entire blockchain and which is therefore chosen to validate transactions. To be a masternode, the user must have a certain number of tokens beforehand. He then earns interest on a regular basis: this is called “rewards”.
Where its twin blockchain, Ethereum, considered changing the protocol from Proof of Work to Proof of Stake, Ethereum Classic intends to stick to the Proof of Work, and recently stated this in a tweet in January 2020. As of this writing, the block creation time is 15 seconds on average and, in terms of reward, miners get approximately 3 FTEs per block. The Ethereum Classic model aims to be inflationary until 2025, the year in which the cap on the supply of money to 210 million will normally be activated.
How to get Ethers Classic?
There are several ways to get tokens from the Ethereum Classic project. Here, we will tell you about the means to buy it, but also about mining.
Where to buy Ether Classic?
To buy Ether Classic or trade Bitcoins for ETC, you need to go to buying platforms. There are many around the world. Here are the best known:
- FP Markets;
Choosing an ETC purchasing platform depends on several parameters such as reputation, security, features made available, means of payment, accessible currencies, interface ergonomics, etc. The selection mainly depends on your trading needs and expectations. So, the choice will not be the same whether you are active or not, beginner or experienced.
How to mine ETCs?
You can acquire Ether Classic by buying or exchanging cryptocurrencies, but also by mining.
To mine ETC, you must install the software Claymore Dual Ethereum or Ethinate on your system. A miner works his computer, hence the advantage of having high-performance equipment such as high-end graphics cards, or those specializing in mining such as Asics.
Other alternatives exist like the site MinerGate which provides a graphical interface without any configuration or participation in a group of typical ETC miners Nanopool.
Where to store your ETCs?
Exchanges are not the safest place to store cryptocurrencies, as these platforms can be the target of computer attacks, or they can close overnight. We advise you to transfer your tokens to a wallet (or wallet) which offers more guarantees.
The market offers two categories of ETC portfolios: hard wallets and cold wallets. It is recommended to store your virtual currencies in the latter, as they have the advantage of being offline, therefore less likely to be attacked. Hard wallets offer a range of more interesting tools for trading, but should only contain what is necessary in cryptocurrencies.
Also note the wallets as Jaxx which can use only one currency or, on the contrary, several, likeExodus. As for hardware cold wallets, brands Trezor and Ledger (Nano S and Nano X) are very popular for storing cryptocurrencies more serenely over the long term.
The Ethereum Classic development team wants to set up a desktop wallet (a portfolio in the form of PC software) named Emerald which would be the first trusted ETC portfolio. Still in development, you can still download the latest version. In addition, a project for a mobile version is also planned.
Why invest in Ethereum Classic?
No one can predict the future, especially when it comes to fluctuations in the price of a virtual currency. After the hard fork Agharta last January, the price of ETC almost tripled in value in a week, going from about 4 euros to more than 10 euros. When writing this guide, the value went down to a stable amount of more than 5 euros. And in the future? Here are the advantages and disadvantages of the Ethereum Classic to understand to form your own opinion.
The advantages of ETC
The main advantages of the Ethereum Classic project are:
- Decentralization through EVM machine (Ethereum Virtual Machine) which allows transactions to be independent of intermediary third parties;
- Technology based on smart contracts and decentralized applications;
- The seriousness of donors;
- Applications at the service of innovation in the future sector of the Internet of Things (IoT).
ETC faults and brakes
The main points of friction for the progression of the Ethereum Classic are:
- The rallying of the main developers to the ETH project;
- The choice not to make the transition from Proof of Work to Proof of Stake;
- The ever-increasing competition;
- An attack suffered in January 2019 temporarily suspending Coinbase.
If you want to invest in Ethereum Classic or another cryptocurrency, don’t forget to consult our 13 rules for investing in cryptocurrencies to get started without fear of making mistakes!
Ethereum Classic was therefore born from the hard fork with its twin currency, Ethereum. If it thus has many points in common with the latter, such as the use of smart contracts and DApps, ETC is becoming more and more detached and intends to stand out in the future, in particular by staying on a Proof of mechanism. Work. The developers of Ethereum Classic do not neglect the interoperability with Ethereum, which they installed and then reinforced thanks to the hard forks Atlantis and Agharta. These hard forks and the new 2-year funding commitment from Grayscale Investments notably tripled the value of this currency in January 2020, and which could in the long term increase it by 1000%.