Guides to Cryptocurrencies
Ethereum Classic (ETC) Blockchain Guide
What is Ethereum Classic?
Ethereum Classic is a public, open-source, blockchain technology based ecosystem with smart contract functionality and uses Proof-of-Work (PoW) consensus algorithm to regulate transactions and creation of data blocks. The native cryptocurrency of Ethereum Classic is called “Classic Ether” and can be traded on cryptocurrency exchanges under the “ETC” ticker symbol.
A Russian-Canadian writer and programmer by the name of Vitalik Buterin came to the conclusion that Bitcoin ecosystem was too limited functionality and it lacked of a scripting language to develop applications. He came up with the idea to develop a new blockchain operating system called Ethereum that can allow any developers to build decentralized applications (dapps) with its smart contract platform. Vitalik wrote his idea on a white paper, released it to the blockchain community and began to develop Ethereum with other developers. The Ethereum network was eventually launched and went live on 30th July 2015.
In June 2016, 3.6 million Ether coins (worth approx. $50 milion USD) were stolen from accounts in The DAO (a venture capital fund built on Ethereum) by unknown criminals who exploited one of the vulnerabilities that were made known to the community roughly one month ago. The Ethereum community and The DAO members debated if they should execute a coding hard fork for the purpose of shifting the stolen Ether coins to a new smart contract and then restore the tokens back to the rightful owners.
Those who were against the hard fork were members partly from the Ethereum community with a firmly held belief that "code is law" and that blockchain should be immutable. On the other side, the pro-fork members argued instead for conflict resolution via decentralized decision-making. A vote was initiated in July 2016 and the majority decision was to implement the hard fork.
The anti-fork members refused to accept the verdict and continued to use the unforked Ethereum version, hence Ethereum Classic came into existence and became independent with its own blockchain. The first Ethereum Classic block (block number 1,920,000) was mined by Classic miners on 20th July 2016 and was not included in the forked Ethereum blockchain. The majority pro-fork members proceeded to implement the hard fork, restored the stolen tokens and retained the name of Ethereum for the blockchain. Ethereum and Ethereum Classic blockchains are hence similar in every detail up until block 1,920,000.
Ethereum Classic’s native cryptocurrency token is called Classic Ether and is commonly used to purchase gas for transactions as well as rewarding participating nodes for their computational roles in the ecosystem. Classic Ether can be purchased or sold on cryptocurrency exchanges under the ticker symbol “ETC” and can alternatively be obtained via mining.
The block reward is 4 ETC, meaning ETC miners will be rewarded 4 ETC tokens when they validate a new block successfully. Total supply of ETC will never exceed 210.6 million tokens according to the reward formula of mining. You can learn more on Classic mining with the following Proof-of-Work (PoW) consensus protocol guide.
Similar to Ethereum, Ethereum Classic uses Proof of Work (PoW) consensus algorithm to regulate the chronology order of its blockchain transactions, create and validate new data blocks via mining, and to reward miners with newly created native tokens (ETC tokens for the case of Ethereum Classic) for their work. Although there are plans for the Ethereum camp to replace PoW with Proof of Stake (PoS) on the ETH blockchain, it is unlikely that the ETC ecosystem will ever undergo the same change since the preference of its community is to continue using PoW for the foreseeable future.
Ethereum Classic based programs are commonly referred to as smart contracts. Users will need to submit transactions to generate and utilize smart contracts. Gas is used to pay for transaction fees on the Ethereum Classic ecosystem and is used to prevent network spamming. Gas exists only inside of the Ethereum Virtual Machine (EVM) and is not an actual token, meaning no one can own, for example, 100 or 500 gas. When a user initiates a transaction, he/she pays for gas units in terms of ETC by specifying how much ETC tokens to pay per gas unit.
Do note that ETC token fluctuates in price but price of various services in terms of gas units does not. You may wonder why the ecosystem does not measure the cost in Classic Ether directly. This is because ETC token, similar to all other cryptocurrencies, fluctuates in price rapidly. Separating the computation price out from the ETC price will remove the necessity to change the operation cost every time the price change.
Users who are willing to pay for higher gas price will be prioritized by miners and their transactions will be completed earlier. Miners need to make a living too, so they will logically select the transactions with the highest fees first. If a user set a transaction price too low, his/her transaction may not be included in the blockchain.
Smart Contract Languages
ETC reached cryptocurrency market cap of more than $722 million USD, which is the 17th largest cryptocurrency market cap in the world and has a total coin circulating supply of around 113 million as of 31st August 2019.