This article is going to discuss the Ethereum cryptocurrency / platform…..
What is Ethereum
Ethereum is a smart-contract platform, utilizing blockchain technology. Ethereum allows the execution of computer code for smart contracts across all of its nodes and recording the execution results in the blockchain. The idea is that a digital contract can be executed and is tamper-proof due to the consensus rules around the blockchain, provided at least 51% of the nodes are honest, tampering with the result cannot happen. It allows sending and receiving of funds in a functionally similar way to Bitcoin using public/private key pairs.
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.
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.
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.
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 withdrawing funds on this version.
Which is better?
This is 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.
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!
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