Correcting the Gemini Article About Ethereum Classic

The exchange Gemini has an article about Ethereum Classic (ETC) with the tag “A Rift in the Blockchain Community” in the following link:

https://www.gemini.com/cryptopedia/ethereum-classic-etc-vs-eth

The post has 5 sections, several of which have mistakes or misconceptions about ETC in the information.

In the following sections we will go over Gemini’s statements, we will propose corrected phrases, and add our rationale for each correction.

Section: Summary

Gemini Statement:

Ethereum Classic (ETC) grew out of an ideological and ethical rift in the Ethereum community that provokes controversy to this day. In 2016, a significant hack was carried out on a third-party application running on the Ethereum (ETH) blockchain, which resulted in the theft of millions of dollars worth of ether, or ETH. In response, the Ethereum blockchain underwent a hard fork to essentially reverse the hack from the official ledger and return the stolen ETH to its original owners.

In contrast, the other branch of this fork kept the official ledger, that included the hack, unchanged — aiming to preserve a 100% immutable ledger. In other words, the two resulting blockchains differed in only one way: One still contained the record of the hack and the stolen ETH, while the other essentially wound back the clock as if the hack had never happened. The edited blockchain preserved the Ethereum moniker, while the original/unchanged blockchain became known as Ethereum Classic.

Our Correction:

Ethereum Classic (ETC) and Ethereum (ETH) were originally one blockchain when ETH was created in 2015, but they separated when there was an ideological and ethical rift in 2016 that provokes controversy to this day. In 2016, a significant hack was carried out on a third-party application running on the Ethereum (ETH) blockchain, which resulted in the theft of millions of dollars worth of ether, or ETH. In response, the Ethereum blockchain underwent a hard fork to essentially reverse the hack from the original ledger and return the stolen ETH to its original owners.

In contrast, the other branch of this split kept the original untampered ledger, that included the hack, aiming to preserve the 100% immutable ledger. In other words, the two resulting blockchains differed in two ways: One still contained the record of the hack and the stolen ETH, while the other essentially wound back the clock as if the hack had never happened; and ETH changed its philosophy of immutability to one of “Social Consensus” while ETC kept its “Code Is Law” philosophy to this day. The edited blockchain preserved the Ethereum moniker, while the original/unchanged blockchain became known as Ethereum Classic.

Rationale:

This summary section is mostly right, but ETC did not grow out of another project or blockchain, it is the original untampered blockchain founded by Vitalik Buterin in 2015. This is why it is better to portray ETC as the same chain as ETH in the beginning so people don’t position it as a later creation, which has been a long lasting misconception in the industry.

The term “official ledger” is incorrect in a truly decentralized blockchain. Official things are created by man. A blockchain that is decentralized with proof of work is followed by protocol, given the objective “most work done” rule, and participants may even split from it as it was the case of ETH when it split from ETC!

The way ETC and ETH differed was not only in the content of the database, e.g. with or without the reversal of the hack, but perhaps the most important divergence was in their philosophies, which became “Social Consensus” for ETH and “Code Is Law” for ETC. This philosophical divide explains why ETH moved to Proof of Stake, for example, while ETC will always be a Proof of Work blockchain.

Section: The Origin of Ethereum Classic

Gemini Statement:

There are many reasons why blockchains undergo hard forks and divide themselves into separate blockchains. Sometimes forks are the result of technological upgrades. Other forks result from deep community disagreements on proposed protocol changes which ultimately split the project and its backers into irreconcilable factions. Such protocol changes can arise from forward-looking efforts to improve existing functionalities, or they can arise in reaction to damage caused by bugs and hacks. The latter instance resulted in the Ethereum fork, which led to the creation of the Ethereum Classic (ETC) blockchain.

In 2016, an application on the Ethereum blockchain (known as The DAO) was hacked, leading to the theft of around 3.6 million ether (ETH) — worth around $50 million USD in 2016 — which subsequently rose to be worth billions of dollars. To further contextualize the severity of this hack, there were around 72 million ETH in circulation at the time, so the hackers stole around 5% of all ETH in existence.

To erase the hack from Ethereum’s ledger and return the money to its original owners, Ethereum core developers chose to implement a hard fork. The newly created ledger, which reversed the hack and returned the stolen ether, became the “main” Ethereum blockchain, and the original version of the ledger was renamed Ethereum Classic as a parallel network that was not compatible with the new main branch. A majority of users, especially victims of the hack, preferred the version of Ethereum that erased the hack. However, some users who viewed immutability as paramount chose to remain faithful to the original ledger, Ethereum Classic.

Our Correction:

There are many reasons why blockchains undergo hard forks and divide themselves into separate blockchains. Sometimes forks are the result of technological upgrades. Other forks result from deep community disagreements on proposed protocol changes which ultimately split the project and its backers into irreconcilable factions. Such protocol changes can arise from forward-looking efforts to improve existing functionalities, or they can arise in reaction to damage caused by protocol bugs and hacks.

In the case of the ETH and ETC split, it didn’t happen by any of these causes but by a bug in an application, or smart contract, that was hosted in the chain. There was no bug or problem in the base protocol itself. This made the manual reversal, violating immutability, even more egregious to the ETC side of the community.

What happened was that, in 2016, an application on the Ethereum blockchain (known as The DAO) was hacked, leading to the theft of around 3.6 million ether (ETH) — worth around $50 million USD in 2016 — which subsequently rose to be worth billions of dollars. To further contextualize the severity of this hack, there were around 72 million ETH in circulation at the time, so the hackers stole around 5% of all ETH in existence.

To erase the hack from Ethereum’s ledger and return the money to its original owners, Ethereum core developers chose to implement a hard fork. The newly created ledger, which reversed the hack and returned the stolen ether, became the “main” Ethereum blockchain, and the original version of the ledger was renamed Ethereum Classic as a parallel network that was not compatible with the new main branch. A majority of users, especially victims of the hack, preferred the version of Ethereum that erased the hack. However, some users who viewed immutability as paramount chose to remain faithful to the original ledger, Ethereum Classic.

Rationale:

It is important to note that the original Ethereum blockchain (now known as Ethereum Classic) never suffered a hack or a bug. It was a bug in a smart contract, and smart contracts are not even part of the protocol, they are software programs hosted in the blockchain, but they are not the blockchain itself.

The rest of the paragraphs in this section are well written.

Section: Ethereum vs. Ethereum Classic

Gemini Statement:

The controversial divide between Ethereum and Ethereum Classic boils down to a philosophical debate which weighs two divergent choices:

1. A distributed ledger’s revised blockchain which was altered in a way that erased a successful cybertheft.

2. A truly immutable blockchain with a permanent record of the network’s entire history, including a successful cybertheft.

Ethereum remains much more popular than its unedited counterpart, indicating where most of the cryptocurrency community landed on this hotly debated issue. Further, Ethereum has the support of Vitalik Buterin, the Ethereum project’s main creator, who is widely regarded as one of the most reputable and influential figures within the Ethereum community and the entire blockchain industry.

However, proponents of Ethereum Classic argue that the ETC hard fork hypocritically enabled the very thing that blockchain technology is meant to prevent — subjective human manipulation. As a result, many idealists stand by Ethereum Classic and its associated cryptocurrency, ETC. Notwithstanding the good intentions of the edited ETH branch, ETC’s proponents categorically reject the reasoning that led to the hard fork in the first place. Many of these individuals believe that any changes to a blockchain ledger (even well-intentioned ones) go against the ethos of the “code is king” mentality that many people associated with blockchain in the first place. Ethereum Classic proponent’s argue that immutable transactions are an irrefutable tenet of blockchain technology that set it apart from the manipulations that many complained of within the traditional global financial system, asserting that immutability should not be compromised in any context.

Other cryptocurrencies, including bitcoin (BTC), have experienced similar debates. The 2017 Bitcoin Cash (BCH) hard fork from Bitcoin was hotly debated. In a more direct comparison to the ETH vs. ETC controversy, hackers stole more than 7,000 BTC (worth around 41 million USD at the time) from the Binance crypto exchange in 2019. The exchange’s founder, Changpeng Zhao, suggested that the Bitcoin community roll back the Bitcoin blockchain, just as Ethereum had done in 2016. In this instance, however, the suggestion did not materialize into community action — perhaps in part because (unlike Ethereum’s founder Vitalik) Bitcoin’s pseudonymous founder Satoshi Nakamoto ceased any public involvement in the project in 2011, and his, her or their identity is unknown. In other words, because of Satoshi’s absence, Bitcoin’s leadership is arguably more decentralized by default than Ethereum’s.

Our Correction:

The controversial divide between Ethereum and Ethereum Classic boils down to important principles that materially impact the security, thus usefulness of the blockchain.

One is a distributed ledger that has become a subjectively managed system by a community of people, just like traditional systems, and the other is a truly objective and immutable blockchain with the original security and decentralization guarantees available to anyone in the world.

Ethereum remains much more popular than its unedited counterpart, indicating where most of the cryptocurrency community landed on this hotly debated issue. Further, Ethereum has the support of Vitalik Buterin, the Ethereum project’s main creator.

However, proponents of Ethereum Classic argue that the ETC hard fork hypocritically enabled the very thing that blockchain technology is meant to prevent — subjective human manipulation. As a result, many ETC supporters stand by Ethereum Classic and its associated cryptocurrency, ETC. Notwithstanding the good intentions of the edited ETH branch, ETC’s proponents categorically reject the reasoning that led to the hard fork in the first place. Many of these individuals believe that any changes to a blockchain ledger (even well-intentioned ones) go against the ethos of the “Code is Law” philosophy that many people associated with blockchain in the first place. Ethereum Classic proponent’s argue that immutable transactions are an irrefutable tenet of blockchain technology that set it apart from the manipulations that many complained of within the traditional global financial system, asserting that immutability should not be compromised in any context.

Other cryptocurrencies, including bitcoin (BTC), have experienced similar debates. The 2017 Bitcoin Cash (BCH) hard fork from Bitcoin was hotly debated. In a more direct comparison to the ETH vs. ETC controversy, hackers stole more than 7,000 BTC (worth around 41 million USD at the time) from the Binance crypto exchange in 2019. The exchange’s founder, Changpeng Zhao, suggested that the Bitcoin community roll back the Bitcoin blockchain, just as Ethereum had done in 2016. In this instance, however, the suggestion did not materialize into community action — perhaps in part because (unlike Ethereum’s founder Vitalik) Bitcoin’s supporters understand the true purpose of these systems.

Rationale:

The divide between ETH and ETC is not merely “philosophical” which may indicate just an abstract subject with no implications in reality. It is a serious and concrete difference in first principles that actually impact the operation of the chain, significantly deviating from one another. Ethereum is a totally subjectively managed system controlled by a community of self appointed developers who believe they must be good enough to have this responsibility. Ethereum Classic is a decentralized mechanical system that will always work according to protocol rules and never make decisions about what is good or bad between humans, things which should be left to lawyers, courts, and legal systems, not C++ developers.

Vitalik Buterin is popular and has a good reputation with people with little understanding, others who are biased because they may own a lot of ETH, or noobs in the industry, but he has relatively less reputation among true and knowledgeable industry participants and OG’s.

ETC proponents are not “idealists” and don’t have a “mentality”. These words seem like pejorative terms to make them seem as persons detached from reality who pursue theoretical things of no importance. However, the truth is exactly the opposite.

Bitcoin was not reversed after the exhortation by the founder of Binance because Bitcoin supporters understand the principles and the purpose of these systems, not because Satoshi Nakamoto was absent.

Section: Structure of Ethereum Classic

Gemini Statement:

The Ethereum Classic protocol is essentially a clone of the original Ethereum protocol. Both Ethereum Classic and Ethereum are smart contract platforms that allow users to build decentralized applications (dApps) on their respective blockchains, and they remain similar from a general functional perspective, although Ethereum has subsequently developed a considerably wider array of functionalities over time. The chains are identical up until block 1,920,000 (where the attack occurred). It is only after this block that they diverge. As a result, significant updates to the Ethereum protocol after this point (including Ethereum 2.0) are not reflected in the Ethereum Classic protocol, and vice versa.

Our Correction:

The Ethereum Classic protocol follows the general Ethereum Virtual Machine (EVM) standard, therefore it is very close to parity with the Ethereum protocol, except for key differences such as the Proof of Work vs Proof of Stake consensus algorithms, and that ETC did not implement EIP-1559 which burns fees. Both Ethereum Classic and Ethereum are smart contract platforms that allow developers to build decentralized applications (dApps) on their respective blockchains, and they remain similar from a general functional perspective. The chains are identical up until block 1,920,000 (when the attack occurred). It is only after this block that they diverge. ETH and ETC share the same design and functionality although they now have different transaction histories and ledgers.

Rationale:

ETC is not a clone of ETH. Again, the one that split is Ethereum, ETC is the original chain. ETC does follow the general EVM standard, like many other chains, therefore it integrates the majority of changes that happen in Ethereum. The latest example of this was the Spital hard fork in ETC. However, ETC does not implement all the changes of Ethereum, this is because ETH has this “Social Consensus” philosophy and has abandoned its goals of true decentralization and immutability. This means that ETC must reject some of the upgrades in ETH, for example the migration to Proof of Stake and EIP-1559 that burns fees, therefore changing the monetary policy.

Users don’t build dapps, developers build dapps.

Ethereum and Ethereum Classic are practically functionally identical with regards to smart contacts and dapps and how they work.

ETH and ETC are practically the same, but with different consensus algorithms and monetary policies. They do diverge in the history of transactions since the split of 2016.

Section: The Future of Ethereum Classic

Gemini Statement:

Foreshadowing a change of heart, Ethereum Classic has recently undergone several protocol upgrades that are aimed at making the protocol more interoperable with the Ethereum protocol. Two recent Ethereum Classic protocol upgrades — Atlantis (in 2019) and Agharta (in 2020) — signal the Ethereum Classic community’s intent to build technological bridges between Ethereum Classic and other communities, including Ethereum. These updates were carried out through mandatory hard forks, which required Ethereum Classic users to upgrade their software in order to comply with the updated rules of the Ethereum Classic network. These updates may signify an ongoing shift toward increased interoperability between these two blockchains. While some have strongly opposed the various splits and forks in the overall Ethereum ecosystem, others believe that “forks are freedom,” and that they allow both blockchains to develop democratically as their respective communities see fit.

Our Correction:

Ethereum Classic will always be state of the art technology as it will always follow the EVM standard as mentioned before. It constantly upgrades the network after Ethereum’s upgrades, usually about 6 months later, but only implementing the changes that make sense for its immutability philosophy and to achieve as much parity as possible with the EVM standard.

Ethereum Classic’s history of protocol upgrades include:

• Gas reprice (2016)
• Gotham (2017)
• Atlantis (2019)
• Agharta (2020)
• Phoenix (2020)
• MESS (2020)
• Thanos (2020)
• Magneto (2021)
• Mystique (2022)
• Spiral (2024)

ETC’s work signals the Ethereum Classic community’s intent to build technological bridges between Ethereum Classic and other communities, including Ethereum. These updates were carried out through voluntary hard forks, which required Ethereum Classic users to upgrade their software in order to follow the updated rules of the Ethereum Classic network. These updates may signify an ongoing shift toward increased interoperability between these two blockchains. While some have strongly opposed the various splits and forks in the overall Ethereum ecosystem, others believe that “forks are freedom,” and that they allow both blockchains to develop freely as their respective communities see fit.

Rationale:

There was no “change of heart” in ETC! As said before, it has always followed the EVM standard and it will always be state of the art technology.

ETC has a long history of constant upgrades to stay up-to-date with the EVM standard.

Upgrades are voluntary not mandatory, if not there would be no splits.

Truly decentralized blockchain development is free, not “democratic”. There is no such thing as “voting” in blockchains.

Thank you for reading this article!

To learn more about ETC please go to: https://ethereumclassic.org