Every project has its origin story, but some stories are more interesting than others. Ethereum Classic is one such project, with an amazing history and a foundation laid on principles. It’s a project which didn’t change, despite overwhelming adversity in a hostile environment. But what is Ethereum Classic exactly?
Some call it the “original Ethereum” since it continues with the “unaltered history” of the world’s largest smart contracts platform. However, the truth is more nuanced and the devil, as always, lies in the details. What makes it “classic” by the way?
How Ethereum Classic Came to be
The Ethereum blockchain was conceptualized in 2013 but was launched in 2015 by Vitalik Buterin and a couple of other co-founders. It was funded through an Initial Coin Offering (ICO) after a pre-mined supply of Ether (ETH) was created, which was sold at less than a dollar per token.
Thus, the largest smart contracts blockchain in the world was born, bootstrapped with just $13M of funds. Shortly after the launch, the community experimented with a form of a crowd-funded investor-managed fund called the DAO, short for Decentralized Autonomous Organization.
The DAO was hacked afterwards for a hefty sum of money and the Ethereum Foundation, along with the majority of the community support, took action to rectify the situation. The blockchain was hard-forked (split into two networks) to remove the “hacker funds” from the wallet address. The incident caused significant tension within the community. That was the moment of birth for Ethereum Classic.
The new network that arose became the new Ethereum, which was supported by the founders, while the original network became what Ethereum Classic is today.
What is Ethereum Classic?
Also known as the original immutability-preserved Ethereum, Ethereum Classic is a distributed Proof of Work (POW)-based decentralized Turing-complete smart contracts platform, which is capable of running complex highly programmable self-executing code through public nodes.
The miners receive ETC tokens as rewards, for supporting the network. There are two kinds of rewards, like most POW chains. One received block subsidies for processing and the other paid by the network users for transactions as fees. The total supply is capped at 210,700,000 ETC.
Ethereum Classic operates using accounts and balances, through a process called state transition. The block resolution time is 13 seconds and the block subsidy is 3.2 ETC currently. Ethereum Classic is a pseudonymous blockchain, which can’t directly link accounts to a person. Furthermore, it allows for other cryptocurrencies and tokens, to be created on top of it.
Ethereum Classic Specifications
The ledger was started on 30 Jul 2015 and the chain split occurred on 20 July 2016. Ethereum Classic split at a 1:1 ratio with Ethereum and has since continued with ETC ticker. Unlike Ethereum, which is transitioning to Proof of Stake (POS), Ethereum Classic will continue to utilize the Proof of Work (POW) Ethash mining algorithm for the foreseeable future.
Both chains can be merged mined or mined together by miners, however, the classic team has taken steps to make it difficult. The hash function is Keccak and addresses with the same 0x prefix. It’s written in C++, Go, Python, Rust, and Scala programming languages.
The DAO Incident
Any mention of Ethereum Classic is incomplete, without discussing the DAO incident that led to its creation. In Apr 2016, the Ethereum community decided to create a sort of crowdsourced venture capital fund, which could invest in different projects for income or development purposes, as decided through an on-chain voting mechanism.
The participation and voting rights were guaranteed by allowing users to deposit Ethers (ETH) into the DAO, which then gave DAO tokens at an exchange rate of 100 DAO: 1 ETH. Such tokens could be used for the modification of platform parameters and controlling which investments to fund. It raised almost 12.7M Ether (worth $150M at that time).
However, soon after the DAO was hacked through a “recursive call exploit” which kept dispensing user’s funds repeatedly without checking the balance and stopping once the user’s share had been sent back. The DAO was hacked for 3.6M Ether (worth $50M at that time).
The Choices Dilemma and the Aftermath
For obvious reasons, the hack was quickly noticed by the community. The attacker had moved the funds to a child DAO and as per the design of the DAO, had 27 days to bring forward a proposal to transfer it to a personal wallet address.
There were three choices for the Ethereum community. To do nothing, to conduct a soft fork in collaboration with miners to destroy the child DAO and its held Ethers, and the final most contentious one is to hard fork, which would result in “reversing time” on the blockchain before the hack, effectively returning the DAO balance.
After heated discussions, the community chose to proceed with option 3, despite the hacker’s open letter arguing that the behavior was permitted by the code and thus it’s illegal to reverse code to take his balance. The chain was effectively split into two, based on fundamental differences in the community.
Code Is Law Ethics
Now, the original unaltered chain is Ethereum Classic and the hard-forked one with a different history is Ethereum, which is managed by the official Ethereum foundation. The former strictly abides by the “code is law” ethics. Ethereum stands for something completely different.
The code is law ethics strongly proposes decentralization, immutability or preservation of integrity, dogmatic devotion to the code, and continuity of the status quo no matter what. On the other hand, Ethereum leans somewhat more on decentralized decision-making, pragmatism, and looking for extreme measures to resolve situations.
Ethereum Classic continues to function today, despite many issues. Its hash rate has been stable, though the chain has suffered 51% attacks lately. Also, the DApp development on the chain has slowed down considerably, in light of recent happenings. But the fight hasn’t ended.
However, the community pushes to work past all difficulties to work for a safe and secure chain that can achieve parity with Ethereum someday. Its direction is led by relentless and non-negotiable preservation of immutability. The foundation has declared its intent to add more functionalities and assist developers with grants to develop on Ethereum Classic.