It may not come as a surprise that Ethereum has gained so much global prominence after its launch on May 2015. Its global acceptance as a medium for creating smart contract and also building decentralized services, also referred to as DApps. Before 2016, Ethereum was just one single unit until the DAO attack, the community behind Ethereum, as well as the coin itself, had to split. The majority of the community was in support of a hard fork that would erase the attack, while the minority stayed true to the original chain.
The question is: What exactly is “DAO Attack”? Let’s start out by first explaining that the DAO (Decentralized Autonomous Organization) was a massive project on Ethereum’s platform. It utilized smart contracts to essentially create a sort of mutual fund that would give funding to other potentially successful DApps. People who bought DAO tokens would be a part of this collective fund. For a DApp to be approved on the DAO, it needed an approval from the board (this board consisted of the most prominent faces in the Ethereum community) and then at least a 20% approval from the token holders.
The DAO project was undoubtedly the biggest project back then in 2016. In a matter of 28 days the DAO raised around $150M in Ether, which at this point accounted for roughly 14% of all the Ether in circulation.
However, the DAO’s protocol had some fundamental flaws in its code. The part which became problematic was its policy that allowed participants to opt out of the DAO, called the “Split Function”. In the perfect world, people could get back their Ether if they no longer wanted to be a part of the DAO, or create their own “Child DAO” (their own fund), but because of a fundamental flaw in the code, one person (or a group of people) was able to steal $50M from the DAO (equating to 1/3 of the funds). This singular act resulted in what we today refer to as Ethereum classic.
Now what are the major difference between Ethereum and Ethereum classic?
- Market value: One of the major index used in ranking of digital currencies, is the dollar value on https://coinmarketcap.com .Whereas Ethereum is valued at $211.72USD per ETH, Ethereum classic is sold at $10.65USD per ETC
- Market Cap: One of the several ways to rank the relative size of a crypto currency is via calculating the Market Cap. It’s calculated by multiplying the Price by the Circulating Supply. Market Cap= Price of coin or token X Circulating Supply. Ethereum for example has a market cap of $21,680,954,065USD while Ethereum classic is struggling with a market cap of $1,115,886,723USD
- Ethereum is a Blockchain platform created in 2015 by Vitalik Buterin, while Ethereum classic is an alternative Blockchain maintained by a wholly new team
- Ethereum still has an uncapped total supply with a fixed yearly supply, something that Ethereum Classic has changed the new monetary policy sets a limit for the total ETC issuance
- In terms of ICO launching and DApp building, ETH seems to be way ahead of ETC and enjoys much more confidence of investors.