Hard fork sets stage for ethereum classic's second major departure from ethereum

For any casual readers on cryptocurrency, one of the first things khổng lồ note with Ethereum Classic (CCC:ETC-USD) is not to lớn confuse it. That’s because casual readers might conflate Ethereum Classic with the more well-known, more valuable, Ethereum (CCC:ETH-USD).

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And that’s probably a good place to lớn start when discussing Ethereum Classic. There was an sự kiện called the hard fork which occurred in năm nhâm thìn. And it’s important lớn understand what happened in order to lớn underst& both Ethereum Classic & Ethereum today.

There are actually two hard forks which have occurred, & this article looks at the original hard fork and the more recent hardfork.

Initial Hard Fork

Ethereum Classic, as the name hints, is the granddaddy of the Ethereum blockchain. If not for what happened in năm 2016, it may still be the only Ethereum in existence today. But that was not khổng lồ be.

It all started with something called the Decentralized Autonomous Organization, or DAO. The DAO was created to act as a sort of decentralized funding community and platform. The DAO was built on the Ethereum blockchain with the purpose of funding blockchain applications. It acted as a sort of venture fund in which successful blockchain applications would return gains lớn investors. Token holders could vote on which projects to fund, with those receiving more than 20% approval moving on lớn development.

Investors in the DAO also needed a function by which they could withdraw their support for a given project. This is where the trouble started. A so-called split function was created which enabled investors lớn get their Ether back. The investor would get their Ether bachồng & the ledger would update. But the Ether holder wouldn’t be able lớn use their Ethereum for 28 days.

Cryptos Are Vulnerable

This splitting function was identified as vulnerable in May và June of năm nhâm thìn until it was finally exploited on June 17, 2016.

On that day “The hacker or hackers stole 11.5 million of Ether, worth approximately $50 million at the time, by repeatedly triggering the splitting function. The network continued to refund Ether for the same DAO tokens without registering the transaction on the public ledger. However, the stolen Ether was still subject to lớn the 28-day holding period. Because the Ether was technically recoverable, the Ethereum community could either create a fork to reverse the illegitimate transactions or vị nothing.”

The community was split between those who wanted the blockchain to remain immutable, and those who wanted the hachồng reversed. Of course, the hard fork occurred and the rest is history.

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That was the first major hard fork between Ethereum Classic và Ethereum. But another happened not long ago. Fortunately this was proactive rather than reactive sầu.

Proof of Work và Proof of Stake

Ethereum Classic remains a proof of work blockchain. Baông xã in 2020 Ethereum switched lớn proof of stake marking another hard fork between the two.

The point here is that blockchain projects & cryptocurrencies are becoming increasingly concerned with efficiency and environmental impact. The choice to lớn remain a proof of work blockchain may indeed be a costly one for Ethereum Classic as it relates to price.

It’s clear that Bitcoin’s (CCC:BTC-USD) proof of work model is not en vogue with investors currently. The mention of a proof of work Mã Sản Phẩm is going to lớn conjure up images of excessive sầu electriđô thị use và environmental degradation.

It’s probably another reason that ETC is going to have sầu trouble garnering much attention in the broader crypto lớn world of 2021.

On the date of publication, Alex Sirois did not have sầu (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject khổng lồ the hozo.vn Publishing Guidelines.

Article printed from hozo.vn Media, https://hozo.vn/2021/06/understanding-ethereum-classic-hard-forks-that-limit-its-progress/.