Ethereum (ETH) is a payment blockchain system that has borrowed heavily from Bitcoin; however, it has taken a ground up architectural model. It is a smart contract centralized platform to keep the user from experiencing downtime, fraud, censorship and interference from third parties.
Ethereum Classic (ETC) is on the other hand forked from Ethereum. This resulted from the Hard Fork solution to the controversy to prevent hacking by project DAO sympathizers. It also operates on a decentralized platform just like Ethereum. It is in real sense a continuation of the original ETH. It is important to note that, after the split, the technology has been maintained in both platforms.
The DAO Story
The Decentralized Autonomous Organization (DAO) was a new organization meant to run solely on Ethereum blockchain, it was meant to use Tokens Holders for implementing various projects. Token holders contributed to the Ethereum organization and therefore the management processes were to be run solely on the original Ethereum platform.
The DAO project aimed at constructing virtual reality laboratories, physical Ethereum computer, and charity based blockchain, easy to carry storage wallet and robotics. In the event that the token holders did not approve the project, a refund of their token could have been affected.
A bug in one of the Solidarity code was used to swindle Ethereum and the DAO project $50 million worth of ETH. The stolen amount was isolated from entering the network for 28 days, thanks to a DAO feature code. The Etheruem community helped in preventing the stolen ETH from being accessed by the hacker.
Defensive measures were put in place and the hard fork was the only method to prevent the stolen ETH from conflicting with ‘clean’ contracts. The hard fork resulted in core Ethereum software updating and the stolen ETH isolated in a contract that owners can access them.
After Ethereum software modification, users had the option to stay put or leave. Majority of users were for the Hard Fork to be effected and this led to the Ethereum blockchain split and two blockchains started to compete. This led to the emergence of Ethereum Classic.
The Hard Fork was more than psychological; but technical as well, thanks to the public blockchain technology. The resulting clone competing with real blockchain meant competition on the delivery of the projects transaction records.
Back to the Market Place
As of March 2017 Ethereum market capitalization stood at approximately $3.9 Billion while that of Ethereum Classic at $0.2 Billion. This meant that the Ethereum Classic after the Hard Fork was still a force to reckon with in the global market. However, the Ethereum market is valued 20 times that of Ethereum Classic.
It might not be accurate to predict the superior Ethereum between the two, but it is clear that Ethereum has the largest user base and keeps increasing every other day. Although most of its affiliates act as Ethereum Classic agents, the growth still remains at par for now!
The Ethereum Foundation still supports Ethereum and a very close associate. This means that Ethereum rides on the credibility of the foundation. This makes the currency look more investor friendly when it comes to ICOs. However, it is a wait-and-see scenario whether the relationship thrives over the years.
After the split, Ethereum Classic undertook a system upgrade and most of the active Decentralized Apps (DAPPs) focuses more on Ethereum. This gives the original currency an upper hand; it will take some time for Ethereum Classic to reach its full ‘independence’ and actualize its full potential and vision.
On the other hand, Ethereum Classic took a different approach after the Hard Fork; it has attracted a very small but highly committed community. Although it is gaining inroads to other cryptocurrency markets, their growth is well articulated. This could be a calculated move to put its house in order before it reaches out to the masses and the corporate world.
One of the indicators that that Ethereum Classic was taking a different approach was after changing the original codebase in January 2017. This is the first step to divert from the original Ethereum vision. This also could be another way of rebranding and selling new ideas to the public.
One of the glaring differences between the two currencies is that Ethereum Classic has brought on board former Ethereum CEO. Charles Hoskinson. Secondly, ETC is being run by four developers. This has given Ethereum classic an upper hand to come up with a very strong mining base. Their miners are dedicated to earn that extra Ether.
Investing Opportunities
Ethereum have has the public goodwill and rides on its former popularity and glory. It is also the most profitable among the two.It has partnered with the corporate world through their blockchain technology. This has left the clone with limited options in the corporate world.
When it comes to investing, Ethereum Classic has his coat cut already. It has over the last month made a lot of money for the investor. If you want to invest, choosing ETC is the best decision to make this year and beyond.
If you have been following digital currency trends, you will realize Ethereum is trying to get out of the rough waters. It tries to straighten itself up from panic selling that has seen ETH value start to rise and currently the currency is hovering around 200 dollars.
So, what has prompted this sudden interest for users to get back the sleeping giant? This is the China connection and a new visibility strategy. One of the largest exchanges in China, the Huobi has agreed to offer Ethereum. Huobi is also among the largest Bitcoin traders across the globe. This is seen to push ETH buying to a higher level.
This is a win-win situation for Ethereum and Huobi; Huobi is looking at the profitability of ETH while Ethereum is looking at the Huobi reach and appeal to the Chinese market and beyond. Remember the exchange outfit was behind the Chines success of Ripple and Litecoin.
Ethereum is playing the global digital currency bet; they are hoping the demand for ETH in China will be sustainable. Their bet is based on the success of the currency in South Korea that account to about 17% of the entire Ethereum market. With the user base in South Korea, making inroads in China seems possible.
When you look at the Ethereum market approach to the Chinese user, you realize that the currency is looking at a spender who has not been overly exploited. However, investors around the globe are investing in Ethereum because of the anticipated demand in China.
On the contrary, Ethereum classic is more inclined towards the corporate world. Their small but dedicated community is setting their eyes on institutions and companies for investment with their bottom line being making profits. Their system upgrade and shift in focus have eased the pressure exerted by Ethereum.
The current Ethereum classic profitability is backed by investor confidence; they believe in the project. Getting listed in exchanges is another way of keeping users whether speculating or not. As a replica of the original currency blockchain, Ether holders got their dues once they moved to ETC.
Pros and Cons of Ethereum Classic and Ethereum
The good thing with Ethereum Classic is its commitment to the immutability of the blockchain. This has seen it get backing from major industry players. These have come onboard to inject some life to the system. The downside is that ETC it is restricted to accessing any updates on the Ethereum chain especially the migration from Proof of Work (PoW) to proof of Stake (PoS).
Another problem is that most of the major players in the original Ethereum have disserted Ethereum Classic to ETH and have been painted ETC a ‘bunch of scammers’; as a result of the ETH community assault; a picture that does not go well with the prospective investor.
When it comes to Ethereum, one of the positives is its exponential growth after the Hard Fork. This is in addition to the original investors it inherited; majority of big shareholders have kept trust on Ethereum. It has been able to reverse the DAO hack and paid back Ethers to the rightful owners creating more confidence.
Ethereum continues to invest heavily on latest technology. It has recently achieved the highest Has-rate compared to Ethereum Classic. Ethereum has brought together the Enterprise Ethereum Alliance composed of 200 corporations. This is a spring board to using the blockchain to host Fortune 500 companies that will include Toyota, ING, Microsoft and JP Morgan among others.
Ethereum major downside is their resistance to the immutability policy; obviously the split went against immutability policy irrespective of whether justice was done or not. Those who were opposed to the Hard Fork argue that Ethereum is anti- ETC people. However, this perception could be based on individual interest and not of the actual investor.
Whatever differences that exist between Ethereum (ETH) and Ethereum Classic, the unanticipated split was unavoidable and could be the beginning of more Hard Forks in the cryptocurrency market. The comeback of ETH is a clear indication that the growth of digital currency lies in the masses and not the platforms.