What Is Ethereum Classic and How Does It Work?
Ethereum Classic (ETC) is an open-source, decentralized, blockchain-based distributed cryptocurrency platform. The outset of the smart contract executing platform occurred in 2016 due to a hack of the network where users exploited a vulnerability in the DAO (decentralized autonomous organization) code to siphon off one-third of its funds to a subsidiary account. Consequently, the Ethereum community decided to split the Ethereum project into two: Ethereum (ETH) and Ethereum Classic (ETC), with the former being the newer blockchain and the latter being the original. But, how does it connect to the workings of the blockchain network? Let’s find out how does Ethereum Classic work. Also we will elucidate on how to buy Ethereum Classic.
Connecting your Ethereum Classic Address to ZenLedger For Your Crypto Tax Forms
- To import your Ethereum Classic transactions into ZenLedger for your crypto tax forms, all we need is your public address.
- Select the proper blockchain or wallet from the dropdown list.
- Paste your address into the address field in ZenLedger.
- Select if the wallet is based in the USA or not.
- Then hit ADD COIN button
How Does Ethereum Classic Work?
Speaking of how to buy Ethereum Classic, let’s first understand the goal of ETH and ETC. The infrastructure and the objective of both ETH and ETC are the same: to offer a public platform that runs smart contracts and at the same time allows developers to develop decentralized apps or dApps. The philosophy of ETH supporters is to maintain the integrity of the original code and prioritize it above anything else. Even if the code is compromised, a hard fork mustn’t be used as it corrupts the originality of the code.
As we have established, Ethereum Classic is a decentralized smart contract running platform. Simply put, third-party involvement such as a lawyer is redundant while enforcing contracts. These smart contracts run on if-then statements.
How? If the concerned party fulfills the required actions within the contract, then the responding party will complete the contract parameters. If the contract parameters are not fulfilled on time, then there might be a penalty involved or the contract may get voided. It all depends on the terms and conditions at the beginning of the contract. For instance, in a real-estate deal, if the contract required an upfront deposit and the concerned party failed to do so, then the contract could get voided.
The self-executing smart contract contains the agreement between the buyer and the seller which is written in lines of code. Therefore, a central authority is not required to externally monitor or censor the execution of the contract. Moreover, the platform allows Turing Complete programs, which means developers and programmers can develop automated and conditional outcome supervised apps.
As it is a blockchain network, Ethereum Classic uses a shared database to document and maintain a thorough record of the transaction history. The network uses the ERC-20 token for the activities and the token is mineable through the Proof of Work (PoW) process. Ethereum Classic will not receive the awaited ETH 2.0 update due to the split.
Now that we have understood how Ethereum Classic works, let’s find out how to buy Ethereum Classic.
How to Buy Ethereum Classic?
Thanks to its shared name with the largest smart contract platform available today, Ethereum Classic is one of the most easily accessible tokens. There are two ways you can grab these tokens. One is through crypto exchanges such as Kraken, Binance, and Coinbase, and others. The second is with other cryptocurrencies. Here’s how you buy your first ETC token:
1. Buying through Crypto Exchanges:
- Open an Online Account: It is important to open an online account on any of the above-mentioned crypto exchanges and verify your identity via KYC. It is an SEC regulation, which requires your name, SSN, and your driver’s license or any other government-issued ID.
- Purchase your ETC: Once you have your account and wallet in place to store your ETC safely, transfer your funds to the crypto exchange and buy your first ETC.
2. Buying With Other Cryptocurrencies:
If an investor or a trader owns coins such as Ethereum or Bitcoin, they can go to Binance and swap these coins for ETC.
After understanding how to buy Ethereum Classic, let’s move on to comprehending more about the blockchain network.
What are the Benefits of Ethereum Classic?
Now that we have established what Ethereum Classic is, let us understand its benefits. As a blockchain network, it offers a lot of advantages, but a few particular advantages of its technology are as follows:
- Decentralized: An intermediary or a central authority is unnecessary as it relies on Proof of Work consensus. Smart contracts are self-executing and third parties are not needed for a transaction.
- Immutability: Once a transaction is recorded on the network, it cannot be altered, removed, or reversed. This results in highly decentralizing the network and maintaining security and code integrity.
- Fast and Affordable Transactions: As third-party involvement is redundant and the process verification is automated, the transactions are verified and processed quickly. The transactions are cost-effective as well.
- Programmable: The Ethereum Classic blockchain is programmable and allows users to develop decentralized apps and create smart contracts.
To Sum it Up
Even though both Ethereum Classic and Ethereum target the same market and offer smart contracts, Ethereum is more popular as it is more legitimate than the two. What ETC needs is a serious redeveloping of its code and software to stop any future hacks. However, the fact remains that Ethereum Classic is one of the purest decentralized, blockchain-based cryptocurrency platforms.