Ethereum has its own Turing-complete programming language for smart contracts.
Ethereum has gone through many developments over the course of its life since its introduction. A major development is the ‘forking
’ of Ethereum into two currencies.
Ethereum started out as a single token following the same consensus rules. There was a smart contract called the DAO which received large amounts of investment
, and around 12% of all ether at the time was tied in this contract.
A hacker discovered a flaw in this contracts code to allow draining of the ether into a child contract, by which they would cash out after some time had elapsed.
Due to the substantial investment in the DAO
running into the multi millions, all of which stood to be lost to a hacker, the community was divided on the solution. Some wanted to leave the network running as it was, their nodes would become the Ethereum Classic coin
. The network had not malfunctioned and in their opinion, the blockchain should be left alone and not edited or altered in any way.
A note that most hashing power is run by very few nodes, as many people mine in mining pools, so a large proportion of miner’s mine on a single node.
Most full mining nodes chose the second option, where there was a divide in opinion. To update their nodes to ‘hard fork’ the block chain, that is change the consensus rules. These new consensus rules would prevent the hacker taking money out and move all the stolen funds to a ‘holding wallet’ to return them to the investors. This required most of the network nodes to agree to do this to allow the changing of events that had happened on the chain. This approach didn’t modify the blockchain much but made adjustments to the code of nodes to bar access to the hacker of the funds and to move them to the holding wallet.
Nodes forked at over 80% consensus, although the community and many investors are divided. Many feel it was the right thing, but others feel that modifying the blockchain in such a way so as to change a record of what happened damages the credibility of ether.
Ethereum Classic maintains the original Ethereum blockchain
and consensus rules. This was the unmodified blockchain, it allowed the hacker to withdraw their funds, but kept the immutable system which had no flaws running perfectly as it was. Ethereum Classic stands as of 02-09-2016 at $1.44 USD. It made up 10% of network hashing power at the time of the fork, but this increased afterwards, especially after a major Ether pool owner threatened to use his pool’s mining power to 51% attack
the coin, the attack was foiled by the increase in honest hashing power.
This fork has received criticism for allowing the hacker to profit from his hack, but the divide on being able to modify a blockchain or not has created a rift in opinion between the two communities.
Ethereum is the forked Ethereum which modified the blockchain and consensus rules after the bug in the DAO contract resulted in the stolen funds
. This was met with joy by some, but criticism by others due to the modifying the immutable record of what had happened and trying to reverse it, when the problem was in the poorly coded smart contract rather than Ethereum itself. The change penalized the attacker by preventing them from withdrawing funds on this version.
The fork achieved at the time 90% hashing power consensus from major mining pools, although Ethereum classic increased in its power. The price of Ethereum
is $11.30 at the time of writing on 02-09-2016.
Which is better?
This is a hard question due to the nature that surrounds the reasons for the fork. If you believe in an immutable blockchain not to be modified under any circumstances when nothing was wrong with the blockchain, currency or protocol, Ethereum Classic is suited to you in terms of ethical considerations. In monetary and investment situations Ethereum Classic is priced lower than Ethereumand its current market should be considered before investing. It works to execute smart contracts as the system was intended to do. This followed the rule of the blockchain being immutable no matter what happens, as there was no fault with the blockchain or the Ethereum protocol.
Ethereum is good if you feel that the fork was the right thing to do to deprive the hacker of his funds, at the expense of modifying the blockchain based on consensus decision. Its current investment price stands higher than Ethereum Classic. It functions as intended for smart contracts, and potentially with a higher security margin due to more hashing power, but the community is more likely to potentially try forking again in the future should a similar situation arise, so is the blockchain immutable in this case? (if it grew with plenty of separate nodes with large hash power, it would be much harder to manipulate, at the time of the fork over 90% of the mining power was from major mining pools so only a few nodes, even though the number of miners was much higher). The fork did, however, return lost money to investors, so this aspect should be considered in your decisions. Would they bail a large contract out again? Or is it just a one-off? Not enough information exists on this issue, but this should also be considered.
Based on the above, careful research should be done when you decide which coin to invest in. Both are present for their own reasons, and you should consider both your financial and ethical stance and beliefs and then choose the version of Ethereum you would like to support. The forked Ethereum holds the higher price so looks like the more promising investment at present, but there are many factors which should be considered, and due to the volatile nature of such a market, never invest what you cannot afford to lose and the situation is liable to change with little notice. This article has been written from an impartial stance. Both Ethereum and Ethereum classic nodes have different views on what the consensus rules should be and act accordingly. Ethereum nodes reject Ethereum Classic blockchain entries, and vice-versa.
Can a blockchain be immutable apart from when the system does not work properly? Or should consensus come to the agreement to implement such a hard fork during times like the DAO hack? This is the question bought up in this article. With information on both sides, only you as the reader can make the decision of which version of Ethereum you wish to support, or if you even want to invest at all. Make your decisions with proper research, and never invest what you cannot afford to lose. And happy investing! If you are a developer of a contract for the Ethereum platform, decide accordingly and good luck!