Why are there two Ethereums? And are they similar? The answer lies in a contentious hard fork that led to a disagreement within the Ethereum community. For starters, Ethereum and Ethereum Classic share a common history—and a common founder— but have evolved into separate blockchain networks. 

Ethereum has become more widely adopted, boasting a much larger market capitalization than Ethereum Classic.

Read on to learn more about this development, including the differences, similarities, and implications of choosing between Ethereum and Ethereum Classic.

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Key takeaways:

• Ethereum and Ethereum Classic diverged due to a hard fork in 2016 following a DAO hack.
• Ethereum has a larger ecosystem, uses PoS consensus, and is more focused on scalability, while Ethereum Classic maintains PoW, is more conservative, and has a niche focus on immutability.
• Ethereum dominates the market with wider adoption and more diverse use cases, while Ethereum Classic has a smaller market presence and is primarily focused on decentralized finance.

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Historical background

In late 2013, Vitalik Buterin proposed Ethereum as a platform for decentralized applications, addressing limitations he saw in Bitcoin—the only cryptocurrency at that time — scripting language. 

In 2014, Buterin and his co-founders launched a crowdfunding campaign, raising $18 million, which spurred Ethereum’s development. The Ethereum mainnet launched on July 30, 2015, introducing smart contracts that allowed developers to build complex blockchain applications.

The DAO hack and the hard fork

The Decentralized Autonomous Organization (DAO) launched in 2016 as a venture capital fund on Ethereum. It raised $150 million in Ether, showcasing the platform’s potential.

On June 17, 2016, an attacker exploited a vulnerability in The DAO’s code, draining $50 million worth of Ether. Following this event, the Ethereum Foundation proposed a hard fork to recover the stolen funds. This controversial decision split the community, with some arguing it violated blockchain immutability.

What led to the birth of Ethereum Classic?

The hard fork to reverse The DAO hack occurred on July 20, 2016. Most users and miners adopted the new chain, which retained the name Ethereum (ETH).

A minority group rejected the fork, choosing to continue the original chain. This group named their blockchain Ethereum Classic (ETC).

Ethereum Classic upheld the ‘code is law’ principle, refusing to alter transaction history. It attracted users who valued immutability over centralized intervention.

Both chains continued to develop separately. Ethereum focused on scalability and ETH 2.0, while Ethereum Classic maintained its original proof-of-work consensus mechanism.

What are the technical differences between Ethereum vs Ethereum Classic?

Post fork, Ethereum and Ethereum Classic diverge in several key technical aspects, such as:

Consensus mechanisms

Ethereum uses Proof-of-Stake (PoS) consensus, transitioning from Proof-of-Work (PoW) in September 2022. This shift aims to improve energy efficiency and scalability.

Ethereum Classic maintains the original PoW consensus mechanism. Like Bitcoin, it relies on miners to validate transactions and secure the network.

The difference is that PoS offers faster transaction times and reduced energy consumption compared to PoW. However, PoW proponents argue it provides better decentralization and security.

Blockchain protocols and upgrades

Ethereum developers regularly implement protocol upgrades to enhance functionality and address scalability issues. Major upgrades include the Beacon chain, London fork, and the Merge.

Ethereum Classic is more conservative, prioritizing stability and immutability. It implements fewer upgrades and maintains a philosophy of “code is law.”

This difference in approach affects each network’s ability to adapt to new technologies and market demands. Ethereum’s frequent upgrades allow for rapid innovation, while Ethereum Classic focuses on maintaining a stable, unchanging platform.

Smart contract and DApp support

Both Ethereum and Ethereum Classic facilitate smart contracts and decentralized apps. (DApps). Ethereum boasts a larger ecosystem with more developers, DApps, and tools.

Ethereum’s upgrades have introduced new features for smart contracts, such as improved gas efficiency and new opcodes. This attracts more developers and complex applications.

Ethereum Classic maintains compatibility with the original Ethereum Virtual Machine (EVM). This ensures stability for existing applications but may limit the adoption of cutting-edge features.

The difference in ecosystem size and development activity impacts the variety and sophistication of DApps available on each platform.

What are Ethereum vs Ethereum classic use cases and applications?

Ethereum and Ethereum Classic offer distinct capabilities for decentralized applications and smart contracts as follows:

Ethereum’s use cases

Ethereum is the foundation for numerous decentralized finance (DeFi) applications, including lending platforms, decentralized exchanges, and yield farming protocols.

Non-fungible tokens (NFTs) have found a home on Ethereum, enabling digital art marketplaces and collectibles. Gaming platforms utilize Ethereum for in-game assets and virtual economies.

Enterprise solutions leverage Ethereum for supply chain management and digital identity systems. Ethereum can handle complicated smart contracts, like those used in DeFi and NFTs.

Ethereum Classic’s use cases

Ethereum Classic maintains a focus on immutability and decentralization. It attracts users who prioritize these principles in their applications.

ETC supports basic smart contracts and decentralized applications. Some projects choose ETC because it has lower transaction fees than Ethereum.

Ethereum Classic finds use in cryptocurrency trading and as a store of value. Its consistent blockchain appeals to those seeking long-term stability in their transactions.

What are the Security and risks of using both? 

Ethereum and Ethereum Classic face distinct security challenges and have implemented various measures to protect their networks and users.

Security challenges

Both Ethereum and Ethereum Classic are susceptible to 51% attacks, where a malicious actor gains control of over half the network’s mining power. This risk is more pronounced for Ethereum Classic due to its smaller network size. Smart contract vulnerabilities pose another significant threat, as seen in the 2016 DAO hack that led to the Ethereum-Ethereum Classic split.

Phishing attacks and private key theft remain ongoing concerns for users of both networks. The increasing complexity of decentralized finance (DeFi) applications on Ethereum has introduced new attack vectors, such as flash loan exploits and oracle manipulation.

What are the mitigation measures?

Ethereum has implemented several upgrades to enhance security, including transitioning to Proof-of-Stake consensus with Ethereum 2.0. This change significantly reduces the risk of 51% of attacks. The network also employs formal verification techniques for smart contracts to minimize vulnerabilities.

Ethereum Classic has introduced MESS (Modified Exponential Subjective Scoring) to increase resistance against 51% attacks. Both networks encourage using hardware wallets and multi-signature wallets to protect user funds. Regular security audits of smart contracts and DeFi protocols help identify and address potential vulnerabilities before they can be exploited.

Moreover, education initiatives by both communities aim to improve user awareness of best security practices and reduce the risk of phishing and social engineering attacks.

Market performance and adoption

Ethereum and Ethereum Classic have experienced divergent trajectories in the cryptocurrency market. Their performance and adoption rates reflect distinct differences in investor sentiment and ecosystem growth.

Market capitalization and trading volume

Ethereum consistently ranks as the second-largest cryptocurrency by market capitalization, behind Bitcoin. As of September 2024, Ethereum’s market cap exceeds $200 billion

Ethereum Classic, in contrast, maintains a significantly smaller market presence. Its market cap hovers around $2 billion, placing it outside the top 20 cryptocurrencies. 

The price of ETH has shown greater volatility and growth potential than ETC’s. Ethereum’s all-time high reached $4,800 in November 2021, while Ethereum Classic peaked at $176 in May 2021.

Adoption and popularity

Ethereum boasts a vast ecosystem of decentralized applications (dApps), DeFi protocols, and NFT marketplaces. Over 3,000 dApps run on the Ethereum network, attracting millions of active users daily. Major companies and financial institutions have embraced Ethereum for various blockchain projects.

Ethereum Classic has a smaller developer community and fewer active projects. Its ecosystem includes around 100 dApps, primarily focusing on decentralized finance and gaming. ETC has gained traction among cryptocurrency miners, especially after Ethereum transitioned to Proof-of-Stake.

Social media metrics and search trends indicate higher interest in Ethereum than in Ethereum Classic. ETH consistently generates more discussions on platforms like Twitter and Reddit.

How do you buy Ethereum on Paxful?

To buy Ethereum on Paxful, follow the step-by-step instructions:

1. Create a Paxful account in seconds using your phone number or email address. Verifying your account adds an extra layer of security. You’ll also get a free Paxful account to store your crypto, and you can access Paxful on the web, iOS, or Android.
2. Once your account is set up and verified, click “Buy Ethereum” from the Paxful main menu.
3. Browse through the list of ETH sellers. Before proceeding, we recommend reviewing the vendor’s terms and reputation.
4. Click the “Buy” button on the seller’s offer to review their requirements. Sellers have special instructions depending on the payment method.
5. If the terms are fair, initiate a trade by entering the amount of Ethereum you want to purchase and clicking on the “Buy now” button.
6. Talk to the seller using the chat box and ask for the next steps. Once you get the signal, you will send the payment to the seller’s account.
7. Mark the transaction as “Paid” to lock the seller’s ETH in escrow temporarily. Then, give the seller a few minutes to confirm the payment. Paxful will release your ETH to your wallet afterward.
8. For added security, consider transferring the purchased Ethereum to a safe cryptocurrency wallet you control, such as a hardware or software wallet with private critical ownership.

Can you buy Ethereum Classic on Paxful?

No. Paxful does not support Ethereum Classic (ETC) anymore. However, you can get your hands on other cryptocurrencies like Ethereum (ETH) as we’ve mentioned earlier.