Ethereum Classic does the same thing Ethereum does.
It facilitates running smart contracts by offering the benefit of decentralized governance.You don’t need a third party involved, such as a bank.
It’s an if-then scenario.
If the actions required within the contract have been fulfilled, then the responding contract parameters would be completed.
If the contract parameters have not been fulfilled, then the agreed penalty will be in order.
For example, if you buy a Tesla for $30,000, and the contract requires you have a credit score of 700, a deposit of $10,000, and comprehensive insurance, all these requirements must be put on the blockchain.
The smart contract will validate on the given date. If everything is in order, your TESLA will roll itself to your front porch at 10:48 in the morning as stated in the contract.
Ok, the last part may be an exaggeration but I am sure you get what it means.
So, is there an ethereum classic if it does the same thing as ethereum.
Here is some history.
In the beginning, there was one ethereum.
Until one fateful day in June 2016, the blockchain was hacked and $50 million worth of funds were stolen
Some wanted the stolen funds returned and some felt that that would go against the very principle of immutability.
So, those who wanted to go with the original ethereum went with Ethereum classic. Those who wanted funds returned and the reason for the hack fixed, went with Ethereum.
Ethereum Classic has since gone through a lot of upgrades but scalability is still the problem. It can only handle 15 transactions per second, but that number is far less than payment networks such as Visa, which handles more than one thousand transactions per second.
Also, security is likely to remain an issue with smart contracts, particularly since Ethereum Classic has already experienced a hack and theft of millions of dollars. These concerns could potentially prevent smart contracts via Ethereum Classic from being used in major financial and real estate transactions.
Ethereum is set to release some upgrades including moving from proof of work to proof of stake.
Ethereum classic will remain in proof of work.
This will further differentiate the two.
Again, before you invest in a crypto, it is important for you to understand what the crypto stands for and see whether that’s consistent with your belief.
Are you a purist? Or do you want refinement in the system?
Market capitalization is another thing to consider.
ETC has 116.3 million coins in circulation with a market capitalization of $3.9 billion while ETH has approximately 115.6 million in circulation and a market cap of more than $304.9 billion.
Purpose is another main difference.
Ethereum Classic is headed towards becoming a global payment network using smart contracts that can function without centralized governance.
It will also most likely become a digital store of value, meaning it can be saved and exchanged while retaining its value. The digital store of value for a crypto includes its purchasing power that can be quickly turned into cash or used to buy another asset, similar to money.
If you want to check out other cryptos you can invest in with My Digital Money, check our description box.