Although Ethereum Classic is a well known Ethereum fork, there are a number of things that are making this project stand out in its own right.
There are benefits to Etheruem Classic from being a fork. Given the similarities to Ethereum, exchange integration is that much easier and this is what has spurred a widescale adoption of Ethereum Classic and its native ETC token.
However, is it really worth considering?
In this Ethereum Classic review I will attempt to answer that. I will also analyse the long term adoption and price potential of ETC tokens.
What is Ethereum Classic?
Ethereum Classic is a blockchain-based decentralized cryptocurrency platform, and the oldest to run smart contracts, although it isn’t the most well known to include these self-executing autonomous applications.
The Ethereum platform, which is the blockchain that forked to create Ethereum Classic, is probably the best known smart contract platform, but many don’t know it isn’t the oldest.
Etheruem fork from Ethereum Classic. Image Source
Smart contracts on Ethereum Classic are used to give the benefit of a decentralized governance system. Through the use of smart contracts, Ethereum Classic guarantees that there is no possibility of any censorship, manipulation, monitoring, or external interference in its governance system.
This was the original intent for smart contracts, and Ethereum Classic held to it after the June 2016 split in the Ethereum blockchain that created Ethereum Classic. That split occurred as a response to the DAO hack that saw $70 million stolen in a matter of minutes.
Ethereum Classic Fork
The group that championed the fork had as their intention to roll back the blockchain to a point prior to the hack, thus restoring the lost funds. Those championing Ethereum Classic, which is the original Ethereum blockchain all the way back to the genesis block, felt that while it initially seemed right to restore the stolen funds, there was a very good reason not to do so.
According to the ETC Declaration of Independence, there were several grievances held against the founding members of Ethereum, most of which revolved around actions taken that were against the principles of decentralization.
Most importantly though they claimed that a hardfork to restore the lost DAO funds violated two key aspects of what gives peer-to-peer cash and smart contract-based systems value: fungibility and immutability.
History of the DAO Hack. Image Source
Fungibility is the feature in any money whereby one unit of the currency is equal to any other unit of the currency. So, one dollar is equal to any other dollar, and one Bitcoin is equal to any other Bitcoin.
In the case of Ethereum, the Ethereum Classic backers claim that by rolling back the blockchain one ETH is no longer equal to one ETH. The rollback made the $70 million in ETH stolen not as good as other ETH, and deemed worthy of censorship.
Immutability means that a blockchain in unchanging and inviolable. The transactions that have been deemed valid are those which have been accepted by the network through the mathematical cryptographic protocol.
This allows transactions to be unquestioned, and if this is broken we have to consider that all transactions are now questionable, since a mutable blockchain means any transaction might be modified. This leaves the blockchain open to fraud, and calls into question all of the distributed applications running on top of the blockchain.
Why Ethereum Classic
Despite being overlooked by many, Ethereum Classic consistently has some of the largest blockchain network activity. The activity is on-par with that of Litecoin, and is greater than what we see from Bitcoin Cash.
Why Ethereum Classic. Image via website
In addition to the network activity, Ethereum Classic also has a large number of commited developers. In fact, there are three different developer teams committed to the long-term vision of Ethereum Classic.
Added to all of this are numerous outside funding sources, and a commitment to creating a secure network anyone can use, which helps Ethereum Classic continue to grow a little more each day, each week, and each month.
Guiding Principles of Ethereum Classic
Ethereum classic is run on the principles of immutability, community, and technology. As the longest running smart contract blockchain in existence, you can have confidence that the Ethereum Classic blockchain will continue to exist as a store of value, not be swept away by some errant developers vision.
Ethereum Classic Technology
Ethereum Classic runs on the mathematically verified Ethereum Virtual Machine (EVM) and is a highly efficient means for transferring value and running Internet of Things (IoT) applications. All together this makes Ethereum Classic a highly efficient means of exchange that is capable of connecting all the world’s IoT devices.
In addition, Ethereum Classic has several developer teams working on improving the technology and creating partnerships that will spread Ethereum Classic usage to every area where blockchain technology can be beneficial.
Ethereum Classic Immutability
Any Ethereum Classic account cannot be modified by anyone but the owner. This is a philosophy shared by cryptocurrencies such as Bitcoin and Litecoin. Other blockchains use another philosophy known as governance whereby the holders of the cryptocurrency are able to use economic or social power on the blockchain to vote on changes that affect everyone’s account.
Ethereum Classic’s developers don’t believe in this model. Imagine if banks allowed account holders to vote on account changes based on how much money each person had in their account. It means the richest account holders could vote for changes that effectively took the money from the smaller account holders.
Governance is a system where the rich and powerful, those who have the most fame and notoriety, are the ones who have the final say over the monetary system. Ethereum Classic has been designed so that this will never happen.
Ethereum Classic Community
Even though blockchains are predominantly known as decentralized ledgers, the truth is that many have centralized communities and leadership. This means there are a relatively few number of people making decisions for everyone.
Ethereum Classic has been purposefully structured so this cannot happen. Development responsibilities are spread out among many different parties, which avoids the hidden centralization that other blockchains fall victim to.
The Atlantis Hardfork
Ethereum Classic completed the Atlantis Hardfork on the 12th of September 2019.
As we’ve seen earlier in this article a hardfork is a radical change, and can be done to reverse transactions. Hardforks are also used to fix security holes, and to implement changes or add new features. In the case of the Atlantis hardfork, it is being undertaken to add both security fixes and new features to Ethereum Classic.
According to Ethereum Classic Labs, the Atlantis hardfork is a no-rush update meant to expand functionality and improve compatibility with Ethereum, thus leading to easier collaborations with other blockchains. The hardfork will also improve the stability of the Ethereum Classic network in an effort to avoid the type of 51% attack suffered by Ethereum Classic in January 2019.
The Atlantis Hardfork. Image Source
Basically, the hardfork is being undertaken to implement a number of Ethereum Improvement Proposals (EIPs) that have been agreed to by the community. Some of these have been around for years, and with the hardfork, Ethereum Classic will be pulled up to the latest Ethereum protocol, which will allow for better interoperability between the two blockchains.
Overall there will be 10 EIPs implemented by the hardfork, including enhancements to security, improvements to performance, contracts to improve zkSNARKs, operational code upgrades, and improvements to the stability of the Ethereum Classic network.
The proposal for the hardfork can be viewed on GitHub, but the Simple Summary is:
“Enable the outstanding Ethereum Foundation Spurious Dragon and Byzantium network protocol upgrades on the Ethereum Classic network in a hard-fork code-named Atlantis to enable maximum compatibility across these networks.”
The Atlantis fork is expected to allow for wider interoperability between blockchains and off-chain scaling protocols. It is important to provide this interoperability between blockchains because it is necessary if the traditional banking and payment systems are to be disrupted.
Unlike many other blockchain projects, the development of Ethereum Classic is not under one single team. There is a core team under Ethereum Classic Labs, but there are other groups undertaking parts of the Ethereum Classic ecosystem. All these groups work together to further the growth and adoption of the Ethereum Classic protocol.
Ethereum Classic Labs (ETC Labs)
The team at ETC Labs is where the Core development team resides, and itprovieds the office space for projects as well as developing industry connections, and providing funding for the Ethereum Classic project.
Image via Ethereum Classic Labs
The ETC Labs has office space in San Francisco and Singapore and operates with the long-term goal of accelerating the development of all Ethereum Classic projects as well as supporting the Ethereum Classic ecosystem and community.
The ETC Labs Core team does the bulk of development for Ethereum Classic projects. It is also involved in supporting the needs of the blockchain and providing the necessary tooling for dApp development, mining and blockchain services. The ETC Labs Core team works under a mission statement that values backward compatibility, decentralization, and state immutability.
ETC Cooperative (ECC)
The ECC was created as a financial support for the development of Ethereum Classic. It provides funding for three key aspects of the Ethereum Classic ecosystem, namely marketing, development, and community.
To achieve their objectives they also act as a liason between the different teams, as well as maintaining some of the community-based software, and also reaching out to other Ethereum-based communities.
This branch of the Ethereum Clssic development team is focused on creating a strong Ethereum Classic ecosystem, with immutability as the core foundation of the blockchain. The team primarily consists of math and science driven developers and engineers, some of whom have been with Ethereum Classic since the beginning.
The primary focus of the team’s development is the node client Mantis, which provides a simple connection to the IOHK Daedalus Wallet UI, so that users may easily manage their ETC tokens.
As a fork of Ethereum, the second largest cryptocurrency, and with a history going back to 2016, it’s not surprising to see the size of some of the communities based around Ethereum Classic.
The largest of these is their Twitter presence, where they have 230,000 followers. They participate heavily on Twitter as well, with multiple daily tweets and re-tweets from other notable cryptocurrency projects.
The sub-Reddit for the project is also pretty impressive, with just under 25,000 followers. There is also quite a bit of activity here, with several posts on most days, and numerous replies to many of those posts. It is definitely a vibrant and active community.
A less active space is the Ethereum Classic forums, but that’s likely because people tend to gravitate towards the well-known sub-Reddit for their questions and discussions. Still, the forum has activity on a daily basis, and is far from defunct.
The ETC Token
When ETC launched in July 2016 it was just under $1. The day after it launched it hit its all-time low of $0.452446 and hasn’t looked back. It quickly jumped higher, and reached $3.53 within a week. It couldn’t hold that level though, and slowly crept lower until trading back under $1 by October 2016.
It remained between $0.80 and $2 until March 2017, and then began a rally that saw it climbing in leaps and bounds over the coming months. By May it was over $7 and by the end of that month, it had topped $20. It continued around the $20 level for most of the summer of 2017.
ETC Price Performance. Image via CMC
By September it had cooled somewhat and spent the next two months trading between $10 and $12 for the most part. The rally resumed in November and ETC quickly climbed through the $20 level, then the $30 level, and the $40 level, finally hitting an all-time high of $47.77 on December 21, 2017.
After struggling to maintain higher levels, and briefly topping $40 again in February 2018 the token dropped, spending most of the next six months trading between $15 and $20.
From there it continued to trade lower, not bottoming until it got below $5 in early 2019. It was able to recover by June, nearly tapping $10 again. It slipped in July and August and as of September 2019 is trading at $6.30.
Buying & Storing ETC
If you’re looking to purchase ETC it is available on nearly all the major exchanges, and most of the smaller exchanges as well.
Taking a look at the broader market volume, it appears to be quite high and well spread out across the range of exchanges. This means that the liquidity is not dependent on a single exchange which bodes well for the trading of the token.
Taking a bit of a closer look on the individual exchange order books, they appear to be quite healthy. For example, on Binance the ETC / BTC order book appears to be quite deep and there is strong turnover here. Hence, there is unlikely to be a great deal of slippage on the orders.
Once you have bought your ETC you are going to want to take it off the exchange and keep it in a secure offline wallet. There are a number of wallets that support the token. We have previously covered a list of the best Ethereum classic wallets which will no doubt have the right wallet solution for you.
While there has been a great deal about the development of Ethereum Classic in the press, are the actual results borne out?
One of the best ways to determine raw development output on an open source project is by taking a look at their public code repositories. Hence, I decided to move on over to the Etheruem Classic GitHub.
In their GitHub I took a look at the number of code commits that have been pushed over the past year. Below are the total commits to three of their most relevant repositories.
Commits over 12 months to Select repos
As you can see, there has not been that much activity in these repositories. This is only a mere fraction of the code that is being pushed in the Ethereum GitHub. Admittedly though, there are way more developers working on Ethereum.
You also have to consider that a great deal of the Ethereum Classic development is taking place in other repositories like that of ETC labs for example. You also have a whole host of development that is being done on top of the Ethereum Classic protocol. You can head on over to their website and see all the projects building on it.
Ethereum Classic was created by a group of developers and community members who felt that Ethereum wasn’t staying true to the principles of decentralized cryptocurrencies when the leadership decided to roll the blockchain back in order to return stolen funds to users from the DAO hack.
While it seems noble on the surface, it undermines the very qualities of fungibility and immutability that cryptocurrencies are valued for.
Since the split from Ethereum the Ethereum Classic project has continued to grow and prosper, showing that it wasn’t just a whim that led the founding members to split from Ethereum. Whether it can continue to grow and expand its reach remains to be seen, and such a question is always a big unknown in the new frontiers of blockchain development.
While we aren’t certain Ethereum Classic brings anything new, other than its “Code is Law” philosophy, it brings enough that it can be one of the surviving blockchains once the inevitable consolidation in the space begins.
Featured Image via Fotolia