When Was Ethereum Classic First Proposed?

This content has been reviewed and edited by an Investment Advisor Representative working for Global Predictions, an SEC-registered Investment Advisor.

Ethereum Classic came into being after a significant split, or “hard fork,” from the original Ethereum network. Its story ties back to one of the blockchain world’s most debated moments: The DAO hack of 2016. Let’s take a closer look at what happened, why it mattered, and how Ethereum Classic has evolved since then.

Key Takeaways

• Ethereum Classic was officially proposed and launched in July 2016 following a disagreement within the Ethereum community about handling The DAO hack.
• The split was a philosophical debate about immutability versus intervention on the blockchain.
• Ethereum Classic preserves the original Ethereum blockchain, including the consequences of The DAO hack.

The DAO: A Turning Point for Ethereum

Before Ethereum Classic, there was just Ethereum. Back in 2016, something revolutionary called The DAO (Decentralized Autonomous Organization) was introduced. It was a bold experiment in decentralized venture capital, quickly raising over $150 million worth of Ether (ETH). However, a critical vulnerability in The DAO’s code allowed an attacker to exploit a reentrancy flaw, siphoning off approximately $60 million worth of ETH. This technical flaw revolved around how the smart contract handled recursive calls, exposing a gap in Ethereum’s early security practices. This event shook the Ethereum community, sparking a heated debate about how to respond.

The Community Debate: Immutability vs. Intervention

The Ethereum community faced a tough choice: Should they step in to reverse the hack and recover the stolen funds? Or should they stick to the idea that blockchain records should remain untouched, no matter what happens?

1. The Case for Intervention:some text
   • Proponents argued that reversing the hack would protect investors and uphold trust in the Ethereum network.
   • A hard fork was proposed to create a new version of the blockchain, essentially erasing the hack from Ethereum’s history.
2. The Case for Immutability:some text
   • Critics of the hard fork believed in the principle of immutability—the idea that the blockchain’s history should remain unaltered, regardless of errors or hacks.
   • They argued that intervening would undermine the fundamental trust and decentralization of blockchain technology.

When Was Ethereum Classic Proposed?

After weeks of intense debate, the idea of Ethereum Classic was put forward in July 2016 by a group within the community who believed in keeping the blockchain’s history intact—flaws and all. The hard fork decision initially divided the blockchain community, leading to debates about the impact on trust in decentralized systems. In the short term, Ethereum Classic faced skepticism from many in the blockchain world, with its market value lagging significantly behind Ethereum. However, its supporters saw it as a necessary step to preserve the integrity of blockchain immutability.

• On July 20, 2016, the Ethereum network executed a hard fork, creating two separate blockchains:some text
  1. Ethereum (ETH): The new chain, which reversed The DAO hack.
  2. Ethereum Classic (ETC): The original chain, preserving the hack and all its consequences.

Why Ethereum Classic Matters

Ethereum Classic’s existence highlights a philosophical divide within the blockchain community. It serves as a reminder of the trade-offs between:

• Immutability: Ensuring the blockchain remains unaltered.
• Flexibility: Allowing intervention to correct mistakes or injustices.

Ethereum Classic maintains the original Ethereum vision while continuing to evolve independently. It still supports smart contracts and dApps, much like Ethereum, but with a firm commitment to immutability.

The Current State of Ethereum Classic

While Ethereum has grown to dominate the blockchain space with innovations like Ethereum 2.0, Ethereum Classic continues to attract supporters who value its adherence to the original principles of blockchain technology. Key points to consider:

• Development: Ethereum Classic has undergone upgrades to improve scalability and security. Current projects include dApps focused on decentralized finance (DeFi) and gaming, showcasing its ongoing relevance.
• Adoption: While smaller in scale, Ethereum Classic’s community remains active, with projects like Ethercluster providing infrastructure for developers.
• Challenges: One of the major hurdles for Ethereum Classic has been its vulnerability to 51% attacks, where malicious actors gain control of more than half the network’s computational power. These attacks have resulted in double-spending incidents, which damaged its reputation and limited its broader adoption. Despite these challenges, Ethereum Classic’s community has implemented measures to enhance its resilience, such as network upgrades and hash power collaborations.

Comparison with Ethereum: While Ethereum boasts a higher adoption rate, greater transaction volumes, and a larger market capitalization, Ethereum Classic continues to appeal to those who prioritize immutability and a purist approach to blockchain technology.