Ethereum was a platform driven by blockchain technology split into Ethereum (ETH) and Ethereum Classic (ETC) in 2016.
Before reading this article, look at our Ethereum article to better understand the difference between the two.
To understand the riven between ETH and ETC, we should know about DAO (Decentralized autonomous organization).
What is DAO
DAO (Decentralized autonomous organization) is a DAPP created on the Ethereum platform.
It is an ambitious venture capitalist project where people worldwide would invest their money into autonomous organizations. In return, they would get tokens of voting rights.
In simple words, DAO is a crowdfunding organization with the most sensational start. DAO was able to collect 150 million dollars within a short time.
Now its function is to find the right company and provide funding during the nascent stages.
The developing companies which require funds will approach DAO, and the blockchain network would check their eligibility and dispose of funds.
Unlike traditional venture capitalist companies, the DAO is an autonomous organization running with smart contracts. The entire selection process is an independent task assisted by the voting system.
It is way more democratized than conventional venture capitalism, which is filled with human errors and emotions.
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Irrespective of the type of company, if a company gets more than 60% votes, they become eligible to earn the fund. There is no central authority to approve the funding process. It is fully automated.
The problem with DAO
In 2016, a few hackers coded into the smart contracts of DAO and stole 3.6 million ethers, which were worth 50 million dollars at that time.
It raised concerns regarding the security flaws in the smart contracts of DAO. Hence the mission was stopped abruptly. But later, many DAPPs similar to DAO emerged, modifying the security protocols.
The Split in Ethereum
Fifty million dollars is a significant amount. The Ethereum community met in 2016 to discuss the future of Ethereum.
There are two options left before the community regains the lost funds. Either the community can vote for a Soft fork, where partial funds can be retrieved, or vote for a Hard fork, where complete funds can be regained.
Unfortunately, the entire community split into two groups. People who voted for a soft fork are now using the Ethereum Classic.
On the other hand, people who voted for Hard Fork are using Ethereum. The present Ethereum is a hard-forked version of the previous Ethereum where the entire ledger was reversed to recover the lost money.
Conclusion
One DAPP has shaken the entire Ethereum network and has given rise to new versions of Ethereum. Today, Ethereum stands next to Bitcoin in market capitalization.
Moreover, scalability is a bit concern for Ethereum classic compared to Ethereum. The Ethereum classic can handle 15 transactions per second. On the other hand, Ethereum (2nd version) can handle 1 lakh transactions per second.
Security concerns still prevail with the Ethereum classic, which is a significant drawback. So, by now, I think you got an idea of the two brothers, the ETH and ETC.
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