You have probably noticed two cryptocurrencies at your crypto exchange which bear the name Ethereum. There is Ethereum and there is Ethereum Classic. You can trade both or hold both, but they are not the same token. There are some distinct differences between the two, and how this disparity came to be is one of the more interesting stories in cryptocurrency. Let’s look at the difference between Ethereum and Ethereum Classic.
The DAO Creates An Ideological Split
On a cryptocurrency exchange Ethereum is given the abbreviation ETH. Ethereum Classic is designated as ETC. The reason for this is that these are two very separate platforms and digital tokens, despite both bearing the same name. One has consistently outperformed the other in terms of value. What you will find is that there are two very distinct camps who give allegiance to one or the other.
How the division between the two camps came to be is a fascinating tale. Before the split Ethereum was one platform. Much contributed to the split, and the story also involves the theft of more than $50 million in Ethereum by a still unknown group of hackers.
The story is complex but essentially begins with something known as the DAO, or Decentralized Autonomous Organization. The DAO was set up to help fund Dapps that were built on the Ethereum blockchain. Dapps and Smart Contracts are two features which are unique to the Ethereum platform. The DAO raised a lot of money through crowdfunding and achieved some success, but there were security problems from the very beginning.
A hack occurred and more than one third of the DAO’s funds were taken. At the time the hack happened the DAO controlled about 14% of the total supply of Ether, the cryptocurrency associated with Ethereum. The result was chaos. Solutions proposed included stopping the blockchain entirely or creating a fork. It was ultimately decided to create something new from scratch, and that is the Ethereum (ETH) that we know today. The original blockchain is now regarded as Ethereum Classic.
How Are ETH and ETC Different?
One of the major differences between the two platforms is that Ethereum is much more popular. It has a market cap of about $15 billion. Ethereum Classic, on the other hand, has a market cap of about $1.5 billion. Both platforms may have their own advantages and disadvantages, but the vast power of the cryptocurrency community resides with Ethereum.
Another difference can be noted in the community of users for each token. The Ethereum Classic community tends to stay more quiet and operate in the shadows whereas the Ethereum community is more transparent and public. Ethereum’s developers are more concerned with blockchain applications and developing apps on the platform. They basically regard Ethereum as a “World Computer” and have partnered with many important companies. The Ethereum Alliance is made up of firms like Microsoft and JP Morgan.
The main distinction between the two tokens and blockchains is more about the communities that support them than the tokens themselves. These communities disagree about which way is best to proceed in a situation like that with the DAO.
Of course, you can invest in either token at all major cryptocurrency exchanges. In terms of an investment, Ethereum is probably going to be a better choice than Ethereum Classic.
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