Ethereum Classic and EthereumPoW: The Tale of Ethereum’s 2 Most Prominent Forks

Ethereum Classic and EthereumPoW: The Tale of Ethereum’s 2 Most Prominent Forks | PRECOG FINANCE

Most blockchains act as a public ledger that goes all the way back to the genesis block — the first block ever produced in the network. Contained within these blocks are all the transaction details that anyone can dig up and explore, and more importantly, save on their devices. After all, most nodes require saving and continuously updating the entire copy of the blockchain on the device upon which they run, and this is a fundamental aspect of how the vast majority of blockchain networks operate.

This may lead some to believe that there can only be one version of a blockchain network running as long as all the participants are in agreement, and, that bad actors are punished for malicious and dishonest attempts. While the latter is true for many networks, how blockchain networks run is a little more complex than that.

In essence, blockchain networks are a long string of blocks (a history of all transactions if you will) that all the nodes and miners agree upon as being valid. However, network participants can also choose to diverge from the direction the blockchain is heading and establish their own set of rules, and fork off and form a separate network that at one point was part of the original.

This is aptly referred to as a fork and doesn’t necessarily occur when there’s a disagreement among participants. In fact, a fork occurs anytime an update is introduced to a blockchain network; backward-compatible updates are called soft forks, whereas those that are incompatible with previous versions are called hard forks. It is up to the nodes and miners to decide which versions they wish to run, but in most cases, the majority tend to agree with one another.

But sometimes, a sizeable portion of the community — albeit a minority — may express disagreement, and it’s highly likely that a fork follows afterward. This may pertain to updates, but may also pertain to certain kinds of events as we’ll soon see below.

Forking Ethereum

Ethereum is no stranger to forks, and throughout its existence has seen at least 2 major forking events that have raised some interesting questions regarding both consensus on dire events and pivotal upgrades. While these are notable events, it should be noted that technically speaking anyone can run their own version of most public blockchain networks.

This is because public blockchains are often regarded as public digital infrastructure, and their code tends to be open-source. With enough technical know-how, even a single individual can run their own version of a network with sufficient hardware. This, of course, does not mean that anyone besides that person will use the network, as most will automatically deem it invalid.

All of this is to highlight the fact that forking a network doesn’t inherently give it any validity whatsoever, and that there needs to be a set of coherent, rational and grounded ideas behind the act to make it practical, sensical, and somewhat legitimate. The reality is that each major fork is uniquely complicated and that a broad brush of judgment is not an appropriate response to certain scenarios. It’s also worth underlining the fact that in both of the cases we will explore below, the overwhelming majority chose to adopt the version Ethereum we know today.

With that being said, let’s take a look at two of Ethereum’s most prominent forks: Ethereum Classic and EthereumPoW.

Ethereum Classic (ETC)

In 2016, Ethereum suffered a major hacking event to the tune of around 3.6 million ETH tokens, which amounted to $150,000,000. The sum was raised as part of an ICO for a project called The DAO, and this event would go down as one of the biggest hacks in the industry’s history — certainly the biggest in Ethereum’s.

This naturally sparked a debate about whether or not to revert the chain and return the stolen funds to investors. The majority were in agreement with a reversion and thus, the Ethereum network that we know today was reverted to a previous state, granting the victims of the hack their stolen funds.

The chain that carried on from that point came to be known as Ethereum Classic, a network that identifies itself as a ‘censorship-resistant’ and ‘truly decentralized’ chain. The extent to which that’s true is beyond the purposes of the article, but what is important is to highlight the differences that have emerged throughout all these years. For instance, while Ethereum transitioned to a Proof-of-Stake consensus chain just last month, Ethereum Classic remains a Proof-of-Work chain for the unforeseeable future.

In recent news, Charles Hoskinson, the co-founder of Ethereum, and later, Cardano, recently found himself in some controversy as he renamed the Ethereum Classic Twitter account (@eth_classic) to one for Ergo (@Ergo_Platform), another smart contract blockchain. The account in question had over 670,000 followers but was under the ownership of Charles, who after a few heated exchanges on Twitter, decided to alter the Twitter account for good.

EthereumPoW (ETHW)

EthereumPoW is a different matter; it is a hard fork not on account of a hack, but rather, due to Ethereum’s transition to PoS. EthereumPoW, as the name implies, is the fork that decided to remain a Proof-of-Work consensus blockchain. It consists mainly of some of the original Ethereum miners that decided to stay, as opposed to a large portion that moved on to other PoW chains.

What mainly differentiates EthereumPoW from Ethereum Classic is the point at which both chains forked. Since ETHW is a newer fork, it closer resembles today’s Ethereum more than ETC, and since it took place years after The DAO hack reversal, EthereumPoW differentiates itself distinctly from its Classic counterpart. While both forks are PoW, that’s perhaps one of the only major similarities that they share.

However, being newer also comes at a cost, as EthereumPoW has not yet developed itself to become as distinct as Ethereum Classic, which has had years to diverge and stand out in its own way. In fairness, uniqueness doesn’t necessarily mean a forked project is legitimate or trustworthy, but it’s a useful indicator nonetheless.

But EthereumPoW isn’t free of any criticism or flaw, as it has been accused of being a dumping scheme led by miners who wish to either minimize their losses or continue the profitability of their rigs by selling newly-minted coins to retail investors. It, therefore, goes without saying to always exercise the utmost caution and thorough research prior to making any token purchases.

More Forks to Come?

It’s difficult to say whether or not the Ethereum network will see another major fork in the future, but given the chaotic and unpredictable nature of this space, it’s more than likely that we’ll witness such occurrences at some point down the line. Regardless of how often these events occur, it’s important to remember that they wouldn’t have been possible without adequate decentralization and open participation — two invaluable aspects of a good blockchain.

Have you ever used any of these forks? What chains do you think could see a part of it split into its own separate being? Let us know your thoughts!

WebsiteWhitepaperDiscordTwitterTelegramYouTubeLinkedInFacebookInstagram

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Precog Finance

Decentralized Derivatives trading ecosystem powered by AI, governed by community.