This guide was created with the purpose of answering any question user may have regarding Ethereum Classic (ETC) . In order to understand why and how ETC has come into existence, it's important to understand the events that lead to its creation: The DAO hack and the hard-fork. If you haven't followed these events, click here to read a brief summary.
Part 1 - What is Ethereum Classic
Ethereum Classic is not a new cryptocurrency, but instead a split from an existing cryptocurrency, Ethereum. Both blockchains are identical in every way up until block 1920000 where the hard-fork to refund The DAO token holders was implemented, meaning that all the balances, wallets, and transactions that happened on Ethereum until the hard-fork are still valid on the Ethereum Classic Blockchain. After the hard-fork, the blockchains were split in two and act individually.
Ethereum Classic still offers the same features as Ethereum, such as the creation and deployment of smart contract and Decentralized applications, and has all the same specifications, such as average block time, size and reward.
Part 2 - Why was Ethereum Classic created
The Hard-fork has been a controversial subject, that has split literally split the Ethereum community in two. Both sides have made some valid points regarding their position on the hard-fork debate.
Users that did not support the hard fork point out that
- Code is law - the original statement of The DAO terms and conditions should stand under any circumstances
- Things that happen on the blockchain are immutable and they should never change regardless of what the outcome is
- There is a slippery slope and once you modify / censor for one course/reason there is not a lot to keep you from doing it for other contracts
- The decision to return the money is short sighted and you might reduce the value of ETH down the line based on your decision to act now
- This is a bailout
Users that supported the hard fork argued the
- Code is law is too drastic of a statement at the current time and humans should have the final say through social consensus
- The Hacker could not be allowed to profit from the exploit as it is ethically wrong and the community should intervene
- The slippery slope argument is not valid as the community is not beholden to past decisions, people can act rationally and fairly in each situation
- It would be problematic to leave such a big piece of the Ether supply in the hands of a malicious actor and it might harm the value of Ether down the line
- This is not a bailout as you are not taking money from the community, it is just a return of funds to the original investors
- It would stop an ongoing war between the white-hat hackers and the hacker that would demoralize the community
- The exploit was big enough to take action and reverse it
- If the community acts now it will make people that are unethical think twice before they use Ethereum as their platform of choice
- A hard-fork to return the funds would keep regulators and the legal system out of the debate: our mess, we fixed it.
The Ethereum Classic was, in this sense, created as a way to allow smart contracts to run exactly as they are programmed to, without the interference of a third party. The ETC community argues that the DAO smart contract did what it was programmed to do and that no action should be taken to censor the contract.
Part 3 - How was Ethereum Classic created
When the hard-fork was implemented, users that did not agree with it decided not to upgrade their software and to continue mining on the blockchain that did not have this implementation. Since the hard-fork creates an incompatibility between the new and previous versions, the users that decided to remain on the "original" blockchain, have diverged into their own blockchain that is identical to Ethereum's in every way until block 1920000.
A lot of effort was put into taking the concept forward:
- Mining pools dedicated to ETC were created
- Exchanges added ETC markets
- We have added APIs for market data information:
Simple ETC API, Advanced ETC API
- You can add widgets to your site to show your support for ETC
- You can calculate the profitability of mining Ethereum Classic (ETC)
- A community hub for ETC supporters
Part 4 - Dangers of Ethereum Classic
The creation of a "double blockchain" is a problematic situation that Bitcoin has been trying to prevent for a long time. Not only it creates confusion amongst investors and casual users, but it also opens possibilities for replay attacks on both blockchains.
If a user signs and broadcasts a signed transaction in one of the blockchain, that transaction can be replayed on the other chain without the consent of the private key holder, since the cryptographic signature for said transaction his already public on the other blockchain.
Part 5 - Ethereum Classic FAQ
"I hold some ETH with Polo and now as stated I see I hold the equivalent in ETC - does this mean if sell ETH I still hold the same in ETC? this is confusing. Does this also mean that if you buy ETH you automatically buy ETC with Poloniex?"
If you had ETH on Kraken or Poloniex at the time of the fork, you will be credited the same amount of ETC, buying and selling one will have no effect no effect on the other because they are on different blockchains
"What is the ETC, something like DAO? or is the replacement of the ETH? Or just another currency?"
Ethereum Classic can be considered a different cryptocurrency from Ethereum. They have different Blockchains and are independent of one another. But they have the same features and even shared the same blockchain (Ethereum) until the hard-fork was introduced, which caused the blockchain to split in two (ETC and ETH)