Ethereum Classic (ETC)
What Is Ethereum Classic?
Ethereum Classic is a decentralized, open-source blockchain-based distributed currency that runs smart contracts. In 2016, a hack on the network resulted in the creation of Ethereum Classic. Ethereum was split in two, with Ethereum Classic being the original and Ethereum being the newer blockchain.
Smart contracts are self-executing autonomous digital applications that run on their own as programmed and are able to enforce themselves. Automated teller machines (ATM) and the Bitcoin system are two examples of such apps.
The benefit of decentralized governance provided by Ethereum Classic allows for the execution of smart contracts. In other words, a lawyer is not necessary to enforce the contracts, as is the case with Ethereum. A smart agreement is a computerized contract that specifies the actions required by its terms. It’s similar to an if-then statement, in which case, if the conditions stated within the contract have been met, the responding contract variables will be completed.
If the contract conditions have not been satisfied, there may be a penalty, cost, or the contract may be voided, depending on the terms agreed upon at the start of the agreement.
The history gets quite technical and complex. A quick explanation of the alternative currencies could go something like this:
- The DAO, or decentralized autonomous organization, was created on Ethereum by developers with the goal of funding the future development of decentralized apps on Ethereum.
- The DAO had its own digital coins, which were convertible to ETH coins and could be used to execute contracts using Proof-of-Work.
- The community decided that the network would create a hard fork as a solution to the security difficulties after hackers utilized a hole in the DAO smart contract and stole $50 million worth of ETH.
- Ethereum would be a new blockchain built as a result of the fork, and it would use Proof-of-Stake to execute contracts. The old blockchain would be known as Ethereum Classic.
How Does Ethereum Classic Work?
ETC uses a Proof of Work (PoW) consensus mechanism to authenticate transactions, much like Bitcoin. Miners validate transactions and create blocks using their time and computing power. When using the network, transactions must occur in the order they are made. Miners accomplish this by solving computationally difficult puzzles to create blocks, which serve as a safeguard against corrupt actors attempting to tamper with or attack the network.
Ethereum Classic’s most distinguishing feature is that it enables users on the network to create smart contracts. These smart contracts include agreements or if-then conditions set out in lines of code that are self-executing. Because the procedure is entirely self-contained, there is no requirement for a third party to handle any trade between a buyer and a seller.
Ethereum Classic has stated that it will continue to use Proof of Work mining to safeguard its blockchain, and the original Ethereum network’s updates will not be used. ETC has also implemented a set monetary policy.
Pros and Cons of Ethereum Classic
Knowing the advantages of investing in ETC is critical to making an informed decision. Although ETC isn’t as popular as ETH, it offers a number of benefits.
Some of the more appealing features are:
- Payments and transactions are accomplished without the requirement of expensive third parties or restrictive governments.
- ETC is the original form of ETH, as it is the originally published version. Some cryptocurrency enthusiasts refer to it as “original” or “genuine” Ethereum since it’s an untouched replica of the blockchain. This strong faith in platform immutability has inspired the formation of a separate group of blockchain users and fans.
- ETC, like other cryptocurrencies, uses smart contracts and decentralized applications. As a result, it can be used in a variety of sectors.
- ETC is less expensive than ETH. However, ETC is in the TOP-30 of all cryptocurrencies by market capitalization. Furthermore, because ETC is far cheaper than ETH, it’s a great investment for novices.
ETC has a number of appealing benefits, and it’s worth taking into account some drawbacks before purchasing it.
Here are some of the perils that come with investing in Ethereum Classic:
- Ethereum Classic (ETC) is not backward compatible with Ethereum.
- Ethereum Classic (ETC) has very little community attention and limited development activity. Meanwhile, Parity Technologies’ projects on the platform are almost entirely controlled by the state of ETC, which raises concerns about its centralization.
- Ethereum Classic (ETC) is considered risky. The level of confidence in Ethereum Classic (ETC) has dropped following several 51% assaults. And it can lead to token interest rates and prices falling.
- ETC has a poor reputation. There are rumors that ETC fraud has damaged the value of cryptocurrencies.
Ethereum Classic vs. Ethereum — How Do They Differ?
Both platforms allow software developers to utilize smart contracts to create centralized apps.
While ETH is often more expensive than ETC, it has a larger market capitalization and user base. This lowers the volatility of ETH overall, gives the coin greater liquidity, and makes it more popular on exchanges. As a result, ETH has less investment risk than ETC.
ETH has the additional purpose of being a decentralized application (dApp) fuel or “gas.” Many developers create decentralized finance (DeFi) protocols on top of Ethereum. Users must have ETH tokens in order to use those sorts of apps. Users may sometimes only be able to exchange one type of cryptocurrency for another, which is required for using the platform. Other times, decentralized applications need only a tiny amount of ETH to run procedures.
The Enterprise Ethereum Alliance is a nonprofit organization that works with Fortune 1000 companies to advance Ethereum standards, technological innovations, and corporate adoption. This group has more than 200 members, including some of the world’s largest firms such as Microsoft, VMware, Intel, Citibank, JP Morgan Chase Bank, and many others.
ETC has a market cap of just over $5 billion. By comparison, Ethereum (ETH) is the second-largest cryptocurrency with a market cap of about $212 billion. Both tokens can be traded as speculative assets, and both are listed on many of the most popular crypto exchanges.
Is Ethereum Classic Worth the Investment?
Ethereum Classic is a smart investment for blockchain enthusiasts who think blockchains shouldn’t be tampered with and investors looking to diversify their holdings, especially during economic chaos.
Ethereum Classic Labs announced its collaboration with the original project, which aims to simplify gathering digital signatures and fight fraud across borders, allowing local and international procedures to improve during a pandemic.
Furthermore, Ethereum Classic has a cap. This can raise scarcity and demand, which will lead to higher prices.
Ethereum Classic has also worked to strengthen ties with Ethereum by launching the Agharta and Phoenix forks. These forks have made Ethereum Classic more compatible with Ethereum.
Investing in Ethereum Classic is still a risky activity because of its lack of security. Despite its promise, Ethereum Classic has been subjected to several 51% assaults, which has eroded public confidence.
It’s certainly the most prominent worry about ETC, especially given that a 51% assault resulted in its creation.
At the end of the day, there’s no such thing as a completely risk-free investment; therefore, investors should do their homework and only invest what they are comfortable with losing.
The idea of sending money online using a digital currency is not particularly difficult. After all, most will be familiar with transferring money from one online bank account to another.
Bitcoin is decentralized digital money that works similarly to traditional currency but without the fees charged by banks. There is no tangible version of the currency, unlike regular money.
A code, which is a sequence of numbers and letters, is used to generate each bitcoin. The same algorithm that generated the code may also be used to “unlock” it (similar to a virtual key).
Bitcoins are extremely volatile, but if you’re willing to take the chance, make sure you know what you’re buying and have a strategy in place.
- Accessibility and Liquidity
- User Anonymity and Transparency
- Independence From Central Authority
- High Return Potential
- No Government Regulations
- Limited Use
Dogecoin is a decentralized, peer-to-peer virtual currency with an easy and approachable logo designed in December 2013. Dogecoin was created shortly after major players such as Bitcoin and Litecoin.
Dogecoin was created in 2013 as a more memorable cryptocurrency project to assist the general public in understanding blockchain technology. Since then, Dogecoin has established itself as an icon of our internet-powered retail investor era. The logo for Dogecoin, the Shiba Inu dog, has been difficult to ignore in 2021.
The technology behind Dogecoin is the same as that of other cryptocurrencies such as Bitcoin. DOGE, on the other hand, makes a few modifications to Bitcoin’s technology to enable users to make quicker and less expensive payments.
Other cryptocurrencies, on the other hand, provide better and more innovative ways to reduce transaction costs.
- Growing Community of Users
- Decentralized Exchange Compatibility
- Positive Side of Volatility
- Has No Supply Cap
- Criticisms of Dogecoin
- Poor Technical Support
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Cardano is a public blockchain designed for smart contracts. The native cryptocurrency of Cardano is ADA. It can be exchanged on several major cryptocurrency trading platforms. The Foundation in Switzerland is in charge of and keeps an eye on Cardano’s development.
Cardano is a large blockchain that has successfully used the Proof-of-Stake (PoS) consensus mechanism, ensuring that technology development goes through a peer-reviewed research process.
It is working on new and revolutionary technologies related to product identification and tracking, which are based on the Daedalus wallet.
Cardano is the third generation of cryptocurrency, following Bitcoin and Ethereum, with one of Cardano’s aims being to provide banking services to people who do not have access to it.
- Research-First and Peer Review
- Proof-of-Stake Consensus
- Resemblances with Ethereum
- Supply Cap on Ada Cryptocurrency
- Considerably Slow Progress
- Remains Not as Popular as Others
Ethereum Classic is one of the most popular cryptocurrencies in the world, and it’s getting more attention as time goes on. As more and more people learn about blockchain technology, the number of Ethereum Classic investors is likely to grow. For those who believe that blockchains shouldn’t be altered or for those who want a new investment opportunity in times of economic turmoil, Ethereum Classic may provide an excellent return on your investment.