• Niranjan

The differences between Ethereum, Ethereum Classic, and Bitcoin

If you've read this far, you should have a good understanding of what Ethereum is and how it operates. Ethereum, as opposed to Bitcoin and Ethereum Classic, will be discussed in greater detail in this chapter.

Bitcoin vs Ethereum: Which is better?

As previously discussed in the book, Ethereum is a computer platform and programming language that enables developers to create smart contracts and decentralised applications on the Ethereum blockchain (dApps). For the purpose of running these dApps and smart contracts, developers can take advantage of a global decentralised network of computers on the Ethereum platform, which provides a massive amount of computing power. Despite the fact that Bitcoin is supported by a global decentralised network of computers, the computing power is mostly used for transaction processing. Bitcoin, in contrast to Ethereum, does not have a programming language or a computing platform. Bitcoin and Ethereum each have their own blockchains, which are used to store data. Every 10 minutes or so, Bitcoin adds a new block to the Bitcoin blockchain, which is known as the blockchain. Each time a new block is added to the Ethereum blockchain, it takes approximately 30 seconds for the new block to be visible.

The currency of Bitcoin versus the currency of Ethereum

The additional capabilities of Ethereum over Bitcoin may lead some to believe that Ethereum is superior and, as a result, will eventually supplant Bitcoin as the most dominant cryptocurrency. Ethereum, on the other hand, was not intended to be a replacement for Bitcoin. In contrast to one another, Ethereum and Bitcoin were created for entirely different purposes and are not in competition with one another. Bitcoin was the first cryptocurrency and blockchain network, and it is still the most popular. The cryptocurrency used on the Bitcoin network, referred to as "bitcoin," was created specifically for use in financial transactions. Bitcoin is a global currency that exists outside of the control of governments and financial institutions, and it is decentralised. The Ethereum network's currency, denoted by the symbol "Ether," was created with the intention of being used to pay for computing power on the Ethereum platform. In order to run an application on the Ethereum platform, a developer must pay for the computing power required. This payment is made in Ether.

Ether is another cryptocurrency that exists outside of the control of governments and financial institutions; however, it is intended to be used as a local currency on the Ethereum platform rather than a global currency. Bitcoin has a limited supply of 21 million bitcoins, which is fixed in time. This is done in order to avoid devaluing the value of bitcoin by creating an excess supply of the cryptocurrency. Because Ethereum has no limit on the number of Ether that can be created, the price of Ether may fall as the supply of Ether continues to grow. There are a large number of websites and shops all over the world that accept Bitcoin as a payment method. As Bitcoin's popularity grows, it will become more widely accepted as a payment method alongside other popular options such as credit cards, PayPal, and cash. Bitcoins can be used to pay for goods and services both online and in physical stores. Ether is not intended to be used as a payment method in physical stores or on websites. The popularity of Ethereum will increase as time goes on, and it will be more widely accepted as a platform for developing applications that run on competing programming languages, operating systems, and computing servers. Developers and businesses will purchase Ether in order to use it as a form of payment for the computing power that they consume on the Ethereum network.

Ethereum vs Ethereum Classic: Which Is Better?

While Bitcoin and Ethereum were created for entirely different purposes, Ethereum and Ethereum Classic are derived from the same source code and are very similar to one another in their functionality. There are significant differences, which we will discuss in greater detail in this section. The book previously discussed the disagreement within the Ethereum community that resulted in the creation of the two Ethereum chains. Although there was originally only one Ethereum platform and currency, the community split into two separate blockchains and currencies due to a code error in a smart contract referred to as the DAO. The DAO was one of the most successful crowdfunded projects ever, raising more than $1 billion in total. The DAO held more than 150 million dollars worth of Ether, which accounted for 15 percent of the total supply of the cryptocurrency. The code error in the smart contract was not caused by a vulnerability or issue with Ethereum, as was previously believed. Although there was nothing wrong with the Ethereum platform, a flaw in the smart contract was discovered and exploited, resulting in the theft of 50 million dollars' worth of Ether. The error in the DAO smart contract was analogous to a contract that contains a poorly worded clause, which allows one party to take advantage of the situation. If something like this happened with a contract, lawyers and the courts would be called in to argue that this was not the intention of the clause in question.

There are no lawyers or courts in the case of a smart contract; the code of the contract serves as the law. It was a valid code; however, it was poorly written, much like a poorly worded legal contract. By taking advantage of this poorly written piece of code, the "hackers" were able to steal 50 million dollars in Ethereum. They did not hack the system; rather, they discovered a section of code that allowed them to transfer the funds to themselves while still complying with the terms of the smart contract they were using. The Ethereum community voted that the contract should be reversed because it was not intended to work in this way by the code. Some members of the community maintained that this was not a hack and that the smart contract was valid. When transactions are reversed, the community is essentially acting in the role of judges and courts, determining which contracts and transactions are valid and which ones are not. When they reverse transactions, they would be acting as a third-party intermediary, making decisions on whether or not to make changes to contracts that are currently running on the platform. This was in direct opposition to the original intent of the Ethereum platform, which was to be decentralised and free of interference from any government, company, or third-party entity. It should not be possible to reverse the terms of a smart contract if the terms are valid; instead, the smart contract code should be the law. Because of the large amount of money stolen, the community voted to reverse the transactions, which resulted in everyone receiving their money back.

This is essentially the same as allowing one of the parties to a contract to act as a judge over whether or not the contract was legally binding. Many of those who voted had lost money, and so they voted not necessarily on the basis of what was right, but rather on the basis of getting their money back. In order to undo the transactions, the blockchain was essentially reset to the time before the funds were stolen, according to the report. This was supported by the vast majority of people, including the original Ethereum developers. The Ethereum community viewed this decision as a clear violation of the network's ideology and design, so they continued to use the Ethereum platform and blockchain without reversing the transactions, which was supported by the Ethereum Foundation. Due to the fact that there were now two Ethereum blockchains and currencies in use, this caused confusion. Ethereum Classic is the name given to the original blockchain, and Ether Classic is the name given to the currency. Founded on the principles of immutability, neutrality, decentralisation, and the belief that code is law, Ethereum classic has grown into a global phenomenon. The community believes in developing the platform while remaining neutral to how it is used and refraining from interfering with contracts or transactions that take place on the network, as outlined in the white paper. Ethereum classic has all of the features and functionality of Ethereum, but it is supported by a much smaller community and has access to significantly less computing power. Currently, Ethereum classic is a version of Ethereum that is similar to, but less supported than, the original Ethereum. Ethereum is currently trading at $300 USD, with a market capitalization of $28 billion dollars at the time of this writing. In the current market, the price of Ether classic is $15, and the cryptocurrency has a market capitalization of $1.5 billion. Ethereum classic seeks to distinguish itself from the competition; however, it is unclear whether it will garner enough support to survive against Ethereum. The main Ethereum platform has received a great deal of support from developers, as well as interest from the government and major corporations.