What is cryptocurrency Ethereum Classic (ETC) and how does it work?

What is Ethereum Classic (ETC)?

Ethereum Classic was originally developed by Vitalik Buterin and his colleagues as software to allow developers to create new cryptocurrency tokens and decentralized applications (dApps) that would run on the new Ethereum blockchain network. Ethereum Classic uses smart contracts, contained within a distributed ledger, to host dApps and transact value while also offering a blockchain network with decentralized governance.

However, due to disagreements between the mining community and the developers over immutability, the Ethereum network underwent a hard fork in June 2016. Ethereum Classic is currently maintained by an active group of miners who have elected to pursue a different technical roadmap for the development of the chain. Ethereum Classic has refused to fork and has resisted changes from the developers since its inception.

How does Ethereum Classic (ETC) work? 

Like Bitcoin, Ethereum Classic uses a Proof of Work (PoW) consensus mechanism to validate transactions. Network security is handled by miners who, using their time and computation power, process transactions and produce blocks. When using the network it’s important that transactions occur in the order that they are made. Miners make this happen by solving computationally difficult puzzles in order to produce blocks, which serves as a way to secure the network from bad actors.

Ethereum Classic ETC

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An important feature of Ethereum Classic is that it allows users on the network to run smart contracts. These smart contracts contain agreements, or if-then conditions, that are written in lines of codes that are self-executing. Since the process is entirely self-contained there does not need to be a 3rd party handling any transactions between a buyer and seller, such as a lawyer. 

Ethereum Classic has vowed to continue using Proof of Work mining to secure its blockchain and will not be including updates from the forked Ethereum network. ETC has also adopted a fixed monetary policy.

Who Are The Founders of Ethereum Classic?

The Ethereum Classic mainnet was originally released via Frontier on July 30, 2015 by the Ethereum Foundation, a Swiss non-profit founded by Vitalik Buterin and the core Ethereum team. The team’s primary focus was to realize the idea of putting executable smart contracts on the blockchain.

In June 2016, a popular dApp called the DAO was exploited and $50 million was stolen from users. The attacker exploited a bug in the code that allowed them to recall additional DAO tokens beyond the user’s actual deposit, draining over a third of the DAO’s core funds. This sparked a contentious debate as to how the developers should respond and if the chain should fork. 

On the 15th of July 2016, a short-notice on-chain vote was held for the proposition of the DAO hard fork. Of the 82,054,716 ETH in existence, 5.5% of the supply voted. 3,964,516 ETH (87%) voted in favor, with 1/4 of that coming from a single address, while 577,88 ETH (13%) opposed the DAO Fork. There was some criticism of the hastily held vote but as of Block Number 1,920,000 the Ethereum network officially forked from Ethereum Classic. 

A mechanism called the “Difficulty Bomb” was designed to push the Ethereum chain from Proof of Work consensus mechanism to Proof of Stake in the future by exponentially increasing the difficulty of mining. The upgrade was added to the network on block 200,000 in an update called Ice Age. After the hard fork occurred, Ethereum Classic upgraded its network on block 5,900,000 to permanently defuse the difficulty bomb – thus ensuring the longevity of its PoW consensus mechanism.

What Makes Ethereum Classic (ETC) Unique?

Ethereum Classic is one of the most historically popular hard forks of any blockchain and remains popular to this day. Many of the features found on Ethereum can be found on Ethereum Classic due to using the same base code. Ethereum Classic differs in ideology from Ethereum, choosing to remain immutable, and offers a permanent Proof of Work system for users to participate in.  

What Gives Ethereum Classic (ETC) Value?

The role of the Ethereum Classic token is to maintain and operate the ETC network. Users realize value by participating in various activities on the Ethereum Classic network. Holding ETC allows users to use smart contracts, make transactions on the network, interact with dApps, and participate in governance votes. 

ETC has also adopted a fixed monetary policy. The total amount of ETC that can be created is capped at 230 million ETC.

How Many Ethereum Classic (ETC) Coins Are in Circulation?

Ethereum Classic (ETC) has a circulating supply of with a total maximum supply of 230,000,000 ETC tokens. This supply will never increase. ETC tokens can be earned by miners who maintain, secure, and manage the network. Ethereum Classic is the original Ethereum blockchain and thus distribution for the ICO was the same for both networks. There was no sale or airdrop for Ethereum Classic (ETC) as it was a hard fork event that caused the chains to split.

How Is Ethereum Classic (ETC) Secured?

Ethereum Classic uses a Proof of Work (PoW) consensus mechanism. ETC will never use another consensus mechanism to secure the network. Ethereum Classic miners secure the network by solving computationally difficult puzzles in order to produce and verify blocks of transactions.

As long as every miner or node on the network agrees on the order in which the blocks are produced (aka consensus), the state of all the information on the blockchain is recorded and the network proceeds to the next block. This consensus mechanism prevents attacks by requiring malicious actors to control a large portion of the network (51% or more). 

The objective of proof-of-work is to extend the chain and miners are incentivised to continue to do this work on the Ethereum Classic chain. There isn’t much incentive for miners to start their own chain since users will always choose the longest or “official” chain. 

Other Technical Data

Node – a computer that connects to the Ethereum Classic network.

Proof of Work (PoW) – miners compete to solve a piece of data which is difficult to produce but easy for others to verify.

ICO – Initial Coin Offering. A process or event in which a company attempts to raise development capital by selling a new cryptocurrency. 

How To Use Ethereum Classic (ETC)

Though ETC functions the same as Ethereum, currently users who want to run a node or transact on the Ethereum Classic network will need the appropriate Ethereum Classic software. 

The primary use for ETC is moving value on Ethereum Classic’s L1 network. 

Ethereum Classic is also attractive because of ETC’s ability to operate smart contracts with its native Ethereum Classic (ETC) tokens. Additionally, it can be used as a speculative investment tool and a form of payment.

How To Choose an Ethereum Classic (ETC) Wallet

The type of Ethereum Classic (ETC) wallet you choose will likely depend on what you want to use it for and how much you need to store.

Hardware wallets or cold wallets provide the most secure option with offline storage and backup. Both Ledger and Trezor hardware wallets offer storage solutions for ETC. Hardware wallets can involve a bit more of a learning curve and are a more expensive option, however. As such, they may be better suited to storing larger amounts of ETC for more experienced users.

Software wallets provide another option and are free and easy to use. They are available to download as smartphone or desktop apps and can be custodial or non-custodial. With custodial wallets, the private keys are managed and backed up on your behalf by the service provider. Non-custodial wallets make use of secure elements on your device to store the private keys. While convenient, they are seen as less secure than hardware wallets and may be better suited to smaller amounts of Ethereum Classic (ETC) or more novice users.

Online wallets or web wallets are also free and easy to use, accessible from multiple devices using a web browser. They are considered hot wallets and can be less secure than hardware or software alternatives, however. As you are likely trusting the platform to manage your ETC, you should select a reputable service with a track record in security and custody. As such, they are most suited for holding smaller amounts or for more experienced frequent traders.

Kriptomat offers a secure storage solution, allowing you to both store and trade your Ethereum Classic (ETC) tokens without hassle. Storing your ETC with Kriptomat provides you with enterprise-grade security and user-friendly functionality.

Selling and buying ETC, or exchanging them for any other cryptocurrency, is done in mere moments when you choose our secure platform as your storage solution.

Ethereum Classic (ETC) Mining

Ethereum Classic does not support staking. Instead, it utilizes a Proof of Work consensus mechanism similar to Bitcoin’s.

After the Ethereum Classic network suffered a series of 51% attacks in 2020, a fundamental change to the Ethash mining algorithm was made. The Ethash epoch duration was doubled from 30,000 to 60,000, thus solving a critical security issue. This new, customized (and optimized) Ethash is known as EtcHash or the Thanos upgrade.

Keeping it Classic

Ethereum Classic is a historical coin with a contentious history. While still in use today with over 1 billion in daily trading volume it’s overshadowed by the more mainstream Ethereum (ETH) fork and remains a speculative option for investors. Despite this, Ethereum Classic is an established cryptocurrency in its own right that has encountered and passed numerous obstacles. When we take note of the fact that Ethereum Classic is one of the oldest blockchains that can use smart contracts, along with the community’s commitment to immutability, it’s easy to see why it’s a popular platform among blockchain enthusiasts.

Ethereum Classic (ETC) FAQ

Is Ethereum Classic a competitor to Ethereum?

Yes. Ethereum Classic (ETC) is designed to compete directly against the Ethereum network by pursuing a different path of development while using the same source code. 

When will staking be released?

Ethereum Classic has disavowed Proof-of-Stake (PoS) and will never support it.

How to Buy Ethereum Classic (ETC)?

Buying ETC is as easy as visiting Kriptomat’s how to buy Ethereum Classic page and choosing your preferred method of payment.

How to Sell Ethereum Classic?

If you already own ETC and hold it on a Kriptomat exchange wallet, you can easily sell ETC coins by navigating the interface and choosing your desired payment option.

Ethereum Classic Price

Several factors influence Ethereum Classic price & market cap, including exchange inflows and outflows, sentiment, technical and fundamental developments, the news cycle, and the general economic environment.

Like Bitcoin, the price of ETC is decided at any given moment by the cumulative buying and selling of millions of participants worldwide. You can keep up to date on the latest price action and news using crypto exchanges like Kriptomat or one of the many different cryptocurrency tracking services.

The current Ethereum Classic (ETC) price is EUR.

The 24-hour trading volume of ETC is EUR. ETC is currently ranked of all cryptocurrencies by total market capitalization, with a market cap of EUR. It has a circulating supply of ETC.

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