Choosing Ethereum or Ethereum Classic can be confusing for crypto noobs. Use this guide to make sure you're buying the right Ethereum.
When talking about Ethereum with friends, I've found myself having to just double-check that we're both talking about the same market.
You see Ethereum (ETH), is not the same as Ethereum Classic (ETC) and with both ripping higher for different reasons, it can certainly be confusing.
When it comes to answering which is better between Ethereum or Ethereum Classic, there are a few key points that you need to understand.
This guide goes over the background behind Ethereum's chain splitting hard fork, examines the advantages of each and then offers a final verdict.
Spoiler alert: Ethereum is better than Ethereum Classic
Why did Ethereum hard fork?
First things first, we have to talk about why Ethereum hard forked in the first place.
Back in July of 2016, Ethereum underwent a hard fork, splitting into the two blockchains we see today.
These of course being Ethereum and Ethereum Classic.
Confusingly, while Ethereum (ETH) is considered the main chain… it's actually the fork.
But due to its backing from the Ethereum Foundation and general community consensus, it retained the original name while the old chain was rebranded to Ethereum Classic (ETC).
The fork came after hackers exploited flaws in the code of Ethereum’s DAO smart contract.
After much community debate about what to do, it was decided by the Ethereum Foundation that they would hard fork the Ethereum blockchain in order to wind back any malicious transactions, patch the exploit and essentially allow the stolen funds to be recovered.
While the Ethereum hard fork was supported by the Ethereum Foundation and a majority of the community, not everyone agreed.
In crypto, there’s an argument to be made that “code is law”, meaning what happens has been allowed to happen by the code and therefore is correct.
They view any changes as against this law and thus have continued to work on the Ethereum Classic blockchain as is.
With the difference between Ethereum and Ethereum Classic now explained, let’s take a look at the merits of buying them both.
Why buy Ethereum?
We've actually been talking about buying Ethereum on the blog, for quite a while.
Just last week for example, I published a crypto market analysis post saying just that when Ethereum ripped through the $3000 psychological resistance zone.
With Ethereum still on an absolute tear, you’ll see on the updated daily chart below, that price has already ripped through the $4000 psychological resistance zone too.
ETH/USD Daily:
Wild moves, right?
But there are a number of reasons to still buy Ethereum, mostly revolving around the chain’s utility when it comes to smart contracts.
If you look at the numbers, Ethereum is the developers’ blockchain of choice when it comes to developing dApps.
For example, the latest boom in the red hot defi space, has been led by platforms built on Ethereum.
Ethereum’s most recent rise has been as much about people buying ETH to actually use decentralised applications built on the network as it has been about pure speculation.
If people are actually using your blockchain, then they’re going to be buying the chain’s native currency in order to interact and that’s certainly driving the price.
The fact that even with Ethereum’s insanely high fees, it’s pretty telling that the blockchain is still being used.
With the planned Ethereum 2.0 upgrades designed at fixing scaling and cost issues for users, you have a number of clear reasons to buy Ethereum
Why buy Ethereum Classic?
The rise we’ve seen in Ethereum Classic on the other hand, has been driven by an entirely different beast.
While the ETH has been bought to use dApps on the blockchain, we can’t say the same for ETC.
How do we know that?
Well, there is literally no dApps of note currently running on, let alone being developed on the Ethereum Classic blockchain.
This pump has been purely thanks to speculators riding the overall wave of momentum we’re once again seeing in cryptocurrency markets.
But if nobody is actually using the Ethereum Classic blockchain, then where is all this demand coming from?
Well, namely its coming from the retail stock investment app, Robin Hood.
I’d go as far as saying that we’re now seeing retail traders buying Ethereum Classic as an alternative to DOGE, after coming to the conclusion that Dogecoin has possibly gone as high as it will go.
It might seem crazy, but speculation is a part of financial markets whether you like it or not.
I’m not saying that you shouldn’t buy Ethereum Classic, because in the short term it’s pumping like crazy.
But with a lack of dApps and no long term value in the blockchain, I just wouldn’t want to be the one left holding a bag of ETC after the retail crowd inevitably gets dumped on.
Just something for you to consider.
Ethereum is better than Ethereum Classic
The verdict is in and the decision is unanimous: Ethereum is better than Ethereum Classic.
Due to Ethereum Classic’s extremely low hashrate (combined computing power of the miners that secure the network), they've actually been hacked three more times in 2021 alone.
As a reference point, due to Dogecoin’s unlimited supply, its network has a hashrate 10x higher than Ethereum Classic.
(Don’t let anyone tell you that Dogecoin doesn’t have value!)
So as you can see, not only is development on Ethereum Classic non-existent, but the network itself is also extremely insecure.
Doesn’t sound like it has much going for it, right?
Well…
You’re going to think I’m crazy saying this, but retail demand for Ethereum Classic could actually see it outperform the more expensive Ethereum in the short-term.
Just make sure you know which Ethereum you’re buying and why you’re making that decision.
If you still have more questions, check out our beginner's guide to Ethereum.
Best of probabilities to you.
Direct from the desk of Dane Williams.
This blog is exclusive to leofinance.io
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This Ethereum vs Ethereum Classic blog is exclusive to leofinance.io.