The Relationship Between Ethereum and Ethereum Classic
Ethereum (ETH) and Ethereum Classic (ETC) originated from a blockchain network fork in 2016. While connected in technical principles, they differ significantly in development paths and consensus mechanisms. Below is a detailed analysis:
I. Origin: Forked Due to the "DAO Incident"
1. Event Background
In 2016, the "DAO (Decentralized Autonomous Organization) incident" occurred on the Ethereum blockchain: The DAO, a decentralized fund, was hacked, resulting in a loss of approximately $50 million in ETH.
2. Forking Process
Ethereum (ETH): The community decided to recover losses through a hard fork (a major modification of blockchain rules), transferring stolen funds to a new address and forming the current Ethereum blockchain.
Ethereum Classic (ETC): Some developers and users insisted on the principle of blockchain "immutability," rejected the hard fork, and continued to maintain the original blockchain, establishing Ethereum Classic.
II. Core Relationship and Differences
Consensus Mechanism
Shifted from Proof-of-Work (PoW) to Proof-of-Stake (PoS) after the "Merge" in 2022, becoming more eco-friendly with 99.95% reduced energy consumption.
Still uses PoW, relying on computational power for mining, with higher energy consumption. Its security depends on hash rate scale.
Development Goals
Positioned as a "world computer," focusing on smart contracts, decentralized applications (DApps), DeFi, NFTs, and supporting Layer 2 scaling (e.g., Arbitrum, Optimism).
Emphasizes the original concept of blockchain "immutability," positioning itself more as a "decentralized ledger," with slower ecosystem development and fewer use cases.
Token Use Cases
ETH is the native token of the Ethereum network, used for paying Gas fees, staking for consensus (PoS), and as collateral in DeFi, with broad ecosystem demand.
ETC serves as the native token of the Ethereum Classic network, primarily for paying transaction fees. Its ecosystem demand is limited, with market cap and liquidity far lower than ETH.
Block Rewards
Under PoS, block rewards are distributed to staked ETH validators, with no fixed mining rewards and low inflation (dynamically adjusted by network usage).
Under PoW, block rewards go to miners, currently 5 ETC per block, with a fixed annual inflation rate of ~4.5%.
Community & Ecosystem
Active community with numerous developers, a thriving ecosystem, the second-largest cryptocurrency supporting tens of thousands of DApps, with a market cap exceeding $200 billion (as of 2025).
Smaller community with fewer developers, slow ecosystem growth, relying mainly on early supporters. Market cap is around tens of billions of dollars, with use cases concentrated in a few exchanges and wallets.
Blockchain Data
After the fork, blockchain data completely separated from the original chain (ETC). ETH's blockchain restarted recording after the DAO incident block, with incompatible transaction histories.
Retains all pre-fork blockchain data, including DAO incident transactions, adhering to "code is law" without modifying historical transactions.
III. Technical Homology and Independence
Homology: Before the fork, they shared the same codebase and technical architecture, with highly similar underlying logics such as smart contract syntax (e.g., Solidity), account systems, and block structures.
Independence: After the fork, ETH optimized its technology through continuous upgrades (e.g., "Constantinople," "Merge"), while ETC maintained the original PoW mechanism and a relatively conservative upgrade strategy, leading to divergent technical paths.
IV. Current Status and Market Positioning
Ethereum (ETH): As a mainstream public chain, it serves as infrastructure for DeFi, NFTs, Layer 2, etc. Its ecosystem expansion and technical iterations (e.g., sharding, EIP-4844) continue, aiming to become a more efficient and decentralized global computing platform.
Ethereum Classic (ETC): Positioned with core selling points of "censorship resistance" and "immutability," attracting a minority of users who emphasize original blockchain principles. However, due to a weak ecosystem and fragmented hash rate, its market influence lags far behind ETH, often seen as a "fork commemorative token" or niche investment target.
V. Summary: Sibling Chains from the Same Origin, Divergent Paths
Ethereum and Ethereum Classic originated from the same blockchain fork. The former adapted to market needs through flexible adjustments, becoming a mainstream public chain with a thriving ecosystem; the latter adheres to the principle of "immutability," developing at a slower pace. Their relationship resembles "two trees from the same root"—sharing technical origins but diverging due to ideological differences. For investors and developers, ETH garners more attention for its ecological vitality and technical prospects, while ETC's value lies primarily in upholding the original concepts of blockchain.
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