Why is Ethereum Classic a lot cheaper than Ethereum?

A quick look at any cryptocurrency price list shows two different types of Ethereum, one being Ethereum (ETH) and the other being Ethereum Classic (ETC).

The two cryptocurrencies not only share the same name but also share an interesting story that is one of the most pivotal events in all cryptocurrency history. The battle between Ethereum and Ethereum Classic is one of ethics and ideologies.

Before there were two different Ethereums, there was only one Ethereum. Since then, $50 million was stolen by an unknown hacker or hackers, and this resulted in two distinct camps of people in the cryptocurrency world being formed.A quick look at any cryptocurrency price list shows two different types of Ethereum, one being Ethereum (ETH) and the other being Ethereum Classic (ETC).

Click for bitcoin to euro

 converters

The two cryptocurrencies not only share the same name but also share an interesting story that is one of the most pivotal events in all cryptocurrency history. The battle between Ethereum and Ethereum Classic is one of ethics and ideologies.

Before there were two different Ethereums, there was only one Ethereum. Since then, $50 million was stolen by an unknown hacker or hackers, and this resulted in two distinct camps of people in the cryptocurrency world being formed.

ETC vs ETH – The Differences

Ethereum (ETH) functions on a brand new blockchain, and the vast majority of miners, users, and protocol from the previous version of Ethereum use this new version.

Ethereum Classic (ETC) runs on the same protocol doing a similar function, but it does have some distinct differences in its community. The 10% or so people from the original Ethereum are relatively in the shadows and are loyal to the concept of the immutable ledger. ETC primarily has value because of the speculator market, much like many of the other alt-coins out there.

Ethereum (ETH), on the other hand, is more like a software company that wants to grow and could possibly have more hard forks in the future. The leaders of the ETH community are far more public in nature than those in the ETC world. ETH primarily has value due to a mix of the speculator market, but more so due to its use of case scenarios and community support. The Ethereum Alliance, for example, consists of billion-dollar firms such as Accenture, JP Morgan, Microsoft, and UBS. This support, in turn, has added credit to ETH over ETC.

It can be argued that both ETH and ETC have some distinct strengths and weaknesses, but the power largely rests with ETH as it has a market cap of roughly $15 billion, whereas ETC has one of around $1.5 billion.

ETC vs ETH – The Ideological Split

By this point in our discussion, you should have a fairly in-depth understanding of the differences between Ethereum and Ethereum Classic.

To explore further, we start to reveal some of the ideological differences between both communities. These ideological points are important to understand because ideologies attract communities, and the community support behind most cryptocurrencies is what ultimately determines their long-term value.

It’s important to distinguish that Ethereum had no blame in what happened with the DAO, as the DAO ran completely independent of Ethereum. However, the $50 million hacks dismantled the public belief in Ethereum and the price dropped from $20 to $13.

The decision to fork was ultimately based on the fact that the missing $50 million of Ether was still on the hacker’s child DAO, and it couldn’t be accessed for 28 days due to the DAO smart contract. The Ethereum community had one of three options:

1. Inaction – Do Nothing: The “code is law” approach was an integral component to many of the immutable blockchain believers that supported Ethereum. These supporters were largely the group that stuck around for ETC. The majority of people weren’t happy with $50 million disappearings, so they decided to take action and cast their votes elsewhere.

2. Soft Fork: A soft fork essentially gave holders the choice of whether to update or not. Whatever decision they chose, updated and non-updated holders could still interact. The concept behind the soft fork was to isolate and segregate all the blocks that contained the hacker’s transactions with the goal of stopping them from moving their stolen ether. The Soft Fork posed a problem, as it would result in a “Denial of Service” attack vector.

 The DoS attack essentially was a manipulation of how miners are rewarded in the Ethereum ecosystem, and for this reason, the community chose to go with the Hard Fork.

3. Hard Fork: The main distinction between soft and hard forks is that hard forks did not allow updated and non-updated holders to interact. If you didn’t join the upgraded blockchain, you would not be able to interact with users of the new system.

The community chose the Hard Fork…

The way the hard fork worked is that the ETH we know today split off from the main blockchain at a particular point. This particular point was around block 1,920,000 – right before the DAO hack.

So, how did this solve the DAO attack issue?

The hard fork helped to refund everyone who had invested into the DAO, using what is referred to as a refund smart contract. For every 100 DAO, token holders were given 1 ETH.

Gavin Wood, the co-founder of Ethereum, called this moment “the single most important moment in cryptocurrency history since the birth of Bitcoin.”

By now, you should have some idea of how this event split up the Ethereum community.

Ethereum was first created as a stance against financial corruption. The immutable blockchain was meant to be free from the human tendency to corrupt. The DAO hack (which had nothing to do with the integrity of the Ethereum platform) split the Ethereum community because the decision to hard-fork – and essentially manipulate the blockchain – went against the original purpose of Ethereum in the first place.

Ideologists that were unshaken in their beliefs stuck with ETC, whereas others split off into Ethereum for the sake of the survival and flourishing of the community. There is a natural antagonism between the two groups for this reason. Additionally, many anti-Ethereum people jumped into the ETC camp to further cause disruption in the Ethereum community.