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What is Ethereum Classic?

Ethereum Classic (ETC) is a platform for building distributed applications (DApps) and smart contracts.

Similar to Bitcoin, Ethereum Classic adopted Proof of Work (PoW) as its consensus mechanism, which builds a consensus as a community. Ethereum Classic is functionally the same as Ethereum, but the issuance cap and reduction periods are different.

While Bitcoin takes about 10 minutes to mine a block, Ethereum Classic takes about 15 seconds. The smallest unit of ETC is the Wei, which is 0.000000000000000001 ETC.

Features of Ethereum Classic

Ethereum classic provides a platform for building decentralized applications (DApps). DApps provide services by using a technology called smart contracts which can execute contracts automatically without any complicated procedures and without the intervention of third parties.

You can make transfers on the Ethereum Classic platform, but you may pay a fee when doing so. While this fee uses ETC, it is referred to as Gas since it is used to power the platform.

Gas is similar to the fees used when remitting Bitcoin, and is a necessary part of keeping the decentralized operations running. These fees are paid to the miners who are recording blocks on the blockchain.

Ethereum Classic and Ethereum (ETH) were once the same currency, so the two have similar features and each have helped to build many decentralized applications.

The DAO Incident: The History of Ethereum classic

The DAO incident occurred in June 2016 and led to a split in the Ethereum community, resulting in the creation of Ethereum Classic.

The DAO project was created with the intention to operate as a venture capital fund through smart contracts on the Ethereum platform. By investing in Ether, it was possible for anyone to participate in the project as a venture capital investor and thereby earn dividends on the ETH funds.

Generally raising investments require complicated procedures and audits by third parties, but THE DAO has a unique mechanism which automates these procedures using smart contracts.However, hackers found loopholes in the DAO and exploited them. They drained a large amount of ETH before the project was kickstarted.

Multiple proposals were raised among the Ethereum community on how to deal with this exploit. A majority of the community favored the proposal to unwind the theft and return all the ETH to the owners and ensure that all token holders could receive their lost funds.

On the other hand, many objected to this measure as it ignored the very nature of the Ethereum philosophy which supports immutability. Objections were raised that this would make the currency less reliable. Eventually, the DAO incident was resolved with this upgrade.

The upgrade survived the situation by evolving into the current Ethereum with the flexible response from the Ethereum community.On the other hand, those who opposed it proceeded with the existing Ethereum network without any updates.

In order to carry out the base philosophy of “the code is Law”, the Ethereum community split into two separate blockchains. In this way, Ethereum classic was born in July 2016.

Future of Ethereum Classic: Entry to the IoT Field (Internet of Things)

The application of Ethereum Classic in the IoT field is expected to expand in the market in future.

IoT (or the "Internet of Things") refers to the technology that enables device to device communication via the internet, thereby making life much easier, has gained a lot of popularity in recent years.

In the present situation, due to the centralization and over-concentration of data, where it is difficult to protect privacy and ensure the validity of records, questions have been raised whether the evolution of the IoT will be secure enough to ensure safety in our lives.

On this point, taking a cue from the DAO incident, it is understandable that the Ethereum Classic is standing true to its code and is safeguarded by a community with high awareness for immutable transactions (value record protection) and a decentralized platform.

This kind of development stance for Ethereum Classic is expected to be recognized as an important factor for its application in the development of the IoT Field.