{"id":10338,"date":"2022-08-04T23:34:00","date_gmt":"2022-08-04T20:34:00","guid":{"rendered":"https:\/\/alfacash.blog\/?p=10338"},"modified":"2024-02-19T21:50:34","modified_gmt":"2024-02-19T18:50:34","slug":"two-ethereum-etc-eth-why-there-may-be-more-year","status":"publish","type":"post","link":"https:\/\/alfacash.blog\/sk\/2022\/08\/04\/two-ethereum-etc-eth-why-there-may-be-more-year\/","title":{"rendered":"Two Ethereum: ETC vs. ETH and why there may be more this year"},"content":{"rendered":"

Once upon a time, there was only one Ethereum blockchain, with only one native token (ETH). Ethereum was the first big smart contract chain, and it\u2019s still the leading one. However, in case you didn\u2019t know, there\u2019s another blockchain with his name and the same origins: Ethereum Classic (ETC). What happened there? What\u2019s up with ETH, ETC, and probably others?<\/strong><\/p>\n\n\n\n

Ethereum was launched seven years ago, on July 30, 2015 \u2014we recently passed its anniversary. Ethereum Classic was part of this network until a year later when the chain was split. A bad and big event was responsible for this back then. But, if very unlikely, it could happen again this year. Let\u2019s explore what happened and what\u2019s going on now.<\/p>\n\n\n\n

The DAO incident<\/strong><\/h2>\n\n\n\n

In 2016, the landscape inside Ethereum was very different. No Decentralized Finance (DeFi<\/a>) apps or Non-Fungible Tokens (NFT<\/a>) yet, and only some Initial Coin Offerings (ICO<\/a>) around. Only ETH, and not a clue of ETC. We currently have an awful lot of interesting projects running on this network, but back then there were just a few. The most notable was, probably, The DAO.<\/strong><\/p>\n\n\n\n

We\u2019re not meaning just a Decentralized Autonomous Organization (DAO<\/a>), that it was, but \u201cThe DAO\u201d was the name of the project itself. Developed by the startup Slock.it, this was a m\u00fadra zmluva<\/a> platform designed to raise funds for different projects. If these projects could thrive, then the profits in ETH would be distributed among all investors.<\/p>\n\n\n\n

\"ETH-ETC-DAO-Slock.it\"
Screenshot from the old The DAO website.<\/figcaption><\/figure><\/div>\n\n\n\n

In May 2016, their ICO raised 12.7 million ETH \u2014around $150 million at the time <\/strong>and $20.6 billion today. It was the higher-grossing ICO of the time, surpassing Ethereum itself (which was also born from an ICO in 2014). There was a lot of enthusiasm around it, and a lot of eyes on it.<\/p>\n\n\n\n

Several of those (expert) eyes warned about certain vulnerabilities<\/a> that could be exploited on The DAO by malicious hackers. Slock.it didn\u2019t listen on time, and the worst happened.<\/p>\n\n\n\n

The hack and the split<\/strong><\/h3>\n\n\n\n

A black hat hacker took advantage of an exploit during the withdrawal process. The latter wasn\u2019t so easy for investors, indeed. It could<\/a> last up to 48 days after the creation of a \u201cChild DAO\u201d, which was a copy with the same rights as the original.<\/p>\n\n\n\n

The issue inside the code was that the funds in ETH were transferred to the Child DAO before updating the balance. So, the hacker made the same request again and again to the Child DAO, until they siphoned 3.6 million ETH (around $60 million at the time).<\/strong> Ako Laura Shin<\/a> described, \u201cIt was as if the attacker had $101 in their bank account, withdrew $100 at a bank, then kept the bank teller from updating the balance to $1, and again requested and received another $100.\u201d<\/p>\n\n\n\n

\"Greatest-DeFi-hacker-Poly\"<\/figure><\/div>\n\n\n\n

The amount ($60 million) doesn\u2019t sound amazing now when we\u2019ve had hacks of over $600 million<\/a> on Ethereum platforms. However, it was scandalous in 2016. Enough for everyone to panic, even the Ethereum Foundation itself. That\u2019s why Vitalik Buterin navrhnut\u00e9<\/a> to carry out a hard fork (chain split) to recover the stolen funds.<\/p>\n\n\n\n

This, put more simply, meant cloning Ethereum, erasing the history of the theft<\/strong> from the new blockchain’s record, and starting a new virtual history of transactions with only the “legit ones\u201d included. New chain, clean slate.<\/p>\n\n\n\n

Certainly, the proposal generated great controversy because it seemed to go against the ideals on which this platform was built: to modify what in theory cannot be modified. The fact that a centralized authority<\/a> was able to change the network to that extent looked unacceptable. But everything was fixed with votes by the community, and this option won with 97% acceptance \u2014at least from the 5.5% of ETH addresses that participated.<\/p>\n\n\n\n

And ETC vs. ETH was born<\/strong><\/h2>\n\n\n\n

After the split, the chain was divided into two, with their respective coins: the new Ethereum (ETH) and Ethereum Classic (ETC).<\/strong> Or the new chain and the original blockchain in which the terrible theft had occurred. At first, everyone was waiting for the second network to quickly die, since the miners would move to the new one. But that didn\u2019t happen<\/a> completely.<\/p>\n\n\n\n

\"ETH-ETC-Classic-website\"
Ethereum Classic main website.<\/figcaption><\/figure><\/div>\n\n\n\n

Instead, a lot of miners chose to stay on the old chain, keeping it alive. Several crypto exchanges joined soon. The old ETH users gained new ETC coins in a 1:1 ratio from their previous balances, thanks to the split. So, for example, if they had 50 ETH before the hard fork, they obtained an additional 50 ETC after the event. At a much lower price per token, though, since ETH is still considered more valuable. Something very similar to what happened more recently with Terra<\/a> (LUNA and LUNC).<\/p>\n\n\n\n

The new Ethereum is still maintained by Vitalik Buterin and the people behind the Ethereum Foundation. Meanwhile, Ethereum Classic is now maintained by several investors and miners worldwide, in a decentralized fashion. For instance, just recently, AntPool (one of the largest mining pools) invested $10 million in ETC.<\/p>\n\n\n\n

\n

The initial $10M USD investment goes toward the development and exploration of applications on the #EthereumClassic<\/a> mainnet, promoting the overall performance of the network.#AntPool<\/a> Supports Ethereum Classic Ecosystem With $10M Investment https:\/\/t.co\/pjMayui06n<\/a> via @coindesk<\/a><\/p>— Ethereum Classic (@eth_classic) August 4, 2022<\/a><\/blockquote>