Although they are similar blockchains, Ethereum Classic and Ethereum are quite different. With a market capital of $185.4 million, Ethereum is the second-largest cryptocurrency. With a market capital of $3.4 billion, Ethereum Classic ranks 22. What is it that makes them different?
Ethereum Classic – This is a hard fork to Ethereum
Ethereum classic was created in 2016 as a hardfork of Ethereum’s blockchain. This was in response to a major hacking attack on Ethereum. Ethereum Classic uses ETC, its native cryptocurrency to conduct transactions. Both Ethereum and Ethereum Classic have smart contract functionality. Both blockchains are decentralized and both offer privacy protection.
However, unlike most hard forks the forked blockchains have some unique attributes. Ethereum Classic is a Proof of Work blockchain. To validate transactions, miners must solve mathematical problems. These miners are then rewarded with ETC tokens. Ethereum is currently running on the PoW consensus system, but it is moving to Proof-of Stake. To become validators, users will need to stake ETH. This is a less-energy-intensive process. From September, the transition to PoS and merge will be complete.
A major difference is the fact that Ethereum has no cap on its supply. Developers have nonetheless set a base 4.5% annual increase. The supply is controlled by a burning mechanism. Ethereum Classic, contrary to popular belief, has a fixed supply. Tokens cannot exceed this limit.
In which area should you invest?
With its market valuation, Ethereum is ahead of its hard fork. It is already dominating the DeFi and NFT sectors. Due to the merger, Ethereum is tops for PoS enthusiasts. Ethereum Classic is the cheaper alternative to ETH. Both tokens show similar price trends. The investor’s interests will determine whether they want to invest in either token.