Ethereum Classic is a cryptocurrency like Bitcoin. Not to be confused with the cryptocurrency Ethereum, Ethereum Classic functions independently. Ethereum Classic operates using the blockchain and consensus rules that originally governed Ethereum. While Ethereum Classic is among the top cryptocurrencies by market capitalization, its market cap is far smaller than that of Ethereum.
Keep reading to find out how Ethereum Classic works, how it differs from Ethereum, and if it would be a good addition to your cryptocurrency portfolio. Ethereum Classic, like every cryptocurrency, may or may not be suitable for you.
What Is Ethereum Classic?
Ethereum Classic (ETC) is a cryptocurrency that launched in 2016 as a hard fork—a permanent split— from Ethereum (ETH). The Ethereum Classic blockchain, like the Ethereum network, is capable of supporting smart contracts and decentralized apps and maintains its own Ethereum Classic tokens.
Ethereum Classic forked from Ethereum in response to a major hacking incident, a rare but not impossible occurrence for cryptocurrency blockchains. The hack resulted in 3.6 million Ethereum tokens lost. The main Ethereum blockchain responded by updating the blockchain to remove the incorrect transactions. There were many in the original Ethereum community that disagreed with that approach, which led to the fork. Ethereum Classic was created using the unaltered Ethereum ledger that contains the transactions from the hack.
Special Features of Ethereum Classic
Ethereum Classic is distinct because it maintains the original Ethereum blockchain. The Ethereum Classic blockchain uses the proof-of-work protocol to validate transactions, which requires vast computing resources to mine ETC. While both Ethereum Classic and Ethereum currently use the proof-of-work method, Ethereum also uses a different consensus mechanism known as proof of stake (and is gradually transitioning to using only this protocol).
The Ethereum Classic blockchain differs from many cryptocurrencies by enabling developers to use smart contracts and launch open-source apps.
|Already Mined / Total Supply (as of Nov. 22, 2021)||131.15 million ETC / 210.70 million ETC|
|Special Feature||Maintains original Ethereum ledger|
Mining Ethereum Classic
The process of mining Ethereum Classic is the same as the mining process for other cryptocurrencies. A network of computers, operated by crypto miners, competes against each other to verify blocks of Ethereum Classic transactions and mint new ETC.
Ethereum Classic miners earn rewards paid in the Ethereum Classic currency. Those rewards are generated in the form of transaction and network fees, which are charged to users who transact in Ethereum Classic or use the Ethereum Classic blockchain.
Network fees are referred to as “gas” in the Ethereum network and they are often paid in very small amount of ethereum tokens called “gwei.”
Total Supply of Ethereum Classic
As of Nov. 22, 2021, the current circulating supply of Ethereum Classic already accounts for more than 62% of the total available supply of 210,70 million ETC. Once all Ethereum Classic is mined, no new ETC will be minted. Miners will continue to earn rewards, but only in the form of transaction fees.
Mining Time for Ethereum Classic
The blockchain analytics company Blockscout reports in real time how long it takes to mine a new block of Ethereum Classic. This number continually fluctuates, with the average mining time being 11.6 seconds at the time of writing.
How to Buy Ethereum Classic
You can buy Ethereum Classic through many popular cryptocurrency exchanges and some retail brokerages. You can also use a cryptocurrency wallet that you own to purchase cryptocurrency through a decentralized exchange such as Exodus.
Ethereum Classic Wallets
Buying Ethereum Classic requires having a cryptocurrency wallet that is compatible with Ethereum Classic.
Supported wallets for Ethereum Classic include physical hardware wallets from Trezor and Ledger, and software wallets from Exodus and Coinbase.
Ethereum Classic Transaction Times
The time it takes to process an Ethereum Classic transaction can vary based on how busy or congested the Ethereum Classic network is. A cryptocurrency’s transaction time refers to roughly how long it takes for a newly submitted transaction to record on the Ethereum Classic blockchain.
Due to hacks, most exchanges require a long time to process ETC transactions. For example, Kraken requires 40,000 confirmations that would need nearly 6.5 days to process, whereas Coinbase requires 20,000 confirmations, which in August 2020 meant close to two weeks to complete the transaction.
Fees for Ethereum Classic
Like transaction times, network and transaction processing fees can vary based on Ethereum Classic’s network congestion. Fees also vary based on the platform or exchange used to purchase Ethereum Classic.
Notable Happenings for Ethereum Classic
The founding of Ethereum Classic was contentious among the developer community behind Ethereum, since Ethereum Classic was created in response to a major hack of the main Ethereum blockchain. TheDAO, a smart contract utilizing the Ethereum blockchain, was corrupted when a hacker took advantage of a vulnerability in the DAO’s software. Because TheDAO was such a large part of the total Ethereum in circulation in 2016, the Ethereum developer community debated and ultimately took action to create Ethereum Classic as a hard fork—complete split—from Ethereum. The hard fork was successfully completed in July, 2016.
In January, 2019, a group of hackers took majority control—known as a 51% attack—of the Ethereum Classic blockchain. The group ultimately returned the funds. The Ethereum Classic network again fell victim to 51% attacks in July and August of 2020.