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Understanding Ethereum And Ethereum Classic

 

  • Ethereum Classic can be referred to as the older version of Ethereum.
  • Following the ‘merge, Ethereum has shifted from PoW to PoS consensus mechanism.

What is Ethereum?

Ethereum, founded in 2015 by Vitalik Buterin, is a well-known open-source blockchain network with a native token called Ether. Ethereum (ETH) is the world’s second-largest cryptocurrency by market cap. 

It works as a crypto platform that allows other blockchain projects to leverage its blockchain. It also facilitates the work of decentralized smart contracts. In 2013, Vitalik Buterin and his co-founder described Ethereum in a whitepaper and also secured funding for the project through a public sale in 2014, after which they finally launched Ethereum on July 30, 2015. 

The blockchain network has gone through multiple upgrades for its blockchain, with the most recent being Ethereum’s Shanghai update, otherwise known as the Shapella upgrade, which went live on April 12, 2023.

What is Ethereum Classic?

It might be surprising that there is more than one type of Ethereum in circulation. Ethereum Classic came into existence after a hard fork on Ethereum’s blockchain after a Decentralized Autonomous Organization (DAO) was hacked in 2016. 

Following this, the older and original chain that contained the details of the hack of that DAO was renamed Ethereum Classic, whereas the newer chain that was retrieved from the hack was named Ethereum.

In simpler terms, the Ethereum Classic is the older version of Ethereum that works on the proof-of-work (PoW) consensus mechanism and the new version has adopted the Proof-of-Stake consensus mechanism after it went through the “merge” in September last year.

Ethereum Classic uses the same consensus algorithm (the Et-hash algorithm) as Ethereum. This allows Ethereum Classic to function like the previous version of Ethereum. On the contrary, Bitcoin uses the SHA-256 consensus algorithm, which makes it incompatible with GPUs built on Ethereum’s blockchain. 

Ethereum Classic also employs smart contracts that are contained in a distributed ledger. This allows Ethereum Classic to host decentralized apps and transact value with the help of a blockchain network with decentralized governance. 

The Current and Future Scenario of Ethereum

Gavin Wood, Co-founder of Ethereum, described it as ‘one computer for the entire world.’ The ultimate goal of Ethereum is to become the go-to platform for the development of decentralized applications around the world. Additionally, it aims to provide an uncensored and fraud-free platform for developers and coders from all around the world to run and write software that is free from fraud and malice.

Ethereum pioneered the concept of smart contracts, which currently ease blockchain operations. The execution of contracts through the blockchain was the fundamental innovation of Ethereum.

Following the ‘merge’ that happened in September last year, the proof-of-stake (PoS) consensus mechanism was merged with Ethereum’s mainnet, reducing its reliance on energy-intensive mining. This gave birth to a new form of Ethereum called Ethereum 2.0.

Ethereum has its own proprietary token standard called the ERC-20 token standard that allows the blockchain to host other crypto tokens as well. This is the most commonly used function of this platform. The price of Ethereum at the time of its launch was $3, whereas at the time of writing it is at $1654.99. This shows Ethereum’s tremendous growth since its launch.

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