What is Ethereum Classic?

Remember, Ethereum Classic was a hard fork of Ethereum, which came into existence following the June 2016 DAO attack in which $50 million of DAO funds were intercepted. The DAO, or Decentralized Autonomous Organizations.

If this is the first time you have read about or heard about any such attack, allow us to shed some light on this very important existential event. The DAO was created as a complex smart contract which was supposed to revolutionize Ethereum, forever. In short, it was supposed to be a decentralized venture capital fund that was going to fund all future DAPPS made in the ecosystem.

If an individual wanted to have something funded, they would have to buy DAO Tokens for a certain amount of Ether, Ethereum’s native token. So, what happened?

The DAO Hack Happened

There was one condition in the smart contract, whereby after splitting off from the DAO, an individual would be required to hold onto their ether for 28 days before it could be spent. Many believed this to be a loophole and pointed it out to the DAO developers.

However, the developers did not think this to be an issue at the time. This response for this very reason was the direct cause for splitting the Ethereum protocol into Ethereum and Ethereum Classic.

Then on June 17, 2016, someone took advantage of that reported loophole in the DAO, making off with one-third of the DAO’s funds, which was the equivalent to approximately $50 million. So, how did this hacker make off with that kind of money so easily?

The image below is a good representation of what happened:


Under the loophole, if an individual wanted to exit the DAO, they could do so by sending a request. The protocol’s splitting function would then (1) give the user back his/her Ether in exchange for the total number of DAO tokens they held and (2) register that transaction in the ledger and update the internal token balance.

The hacker then created a “recursive function” in a user’s request, which would instead (1) take the DAO tokens from the user and give them the Ether requested, but (2) before the transaction could be registered, the recursive function would create code that went back to step (1) and transfer even more Ether for the same DAO tokens. This function repeated over and over until $50 million Ether were taken out and stored in a Child DAO--causing absolute chaos throughout the Ethereum community.

It is important to recognize that this loophole was due to a flaw in the DAO, not an issue in ethereum itself.

To Fork or Not to Fork?

While the hacker did take away $50 million Ether, remember, it would be sitting in the Child DAO for 28 days, giving the Ethereum community three options:

Option #1: Nobody does anything
Option #2: Soft fork
Option #3: Hard fork

Those opposed to the fork (soft or hard) chose to stick with the original protocol chain, known as Ethereum Classic. Everyone else, including Ethereum founders Vitalik Buterin and Gavin Wood move onto the new chain, known as Ethereum.

So, What’s the Difference?

What’s important to understand is that there isn’t much of a difference between ETC and ETH, as both are smart contract platforms that allow developers to create their own DAPPs.

Defending Against 51% Attackers

Defending Against 51% Attackers

Back in October 2020, ETC introduced a solution for the prevention of 51% attacks, which have recently placed ETC at a crossroads for its survival. A 51% attack on a blockchain refers to a miner or a group of miners trying to control more than 50% of a network’s mining power, computing power or hash rate.

Back in August, ETC faced delisting from OKEx after a second 51% attack cost the exchange $5.6 million.

The report released by OKEx revealed that attackers registered five accounts between June 26 and July 9, 2020, subsequently depositing 68,230.02 ZEC (equivalent to $5 million+) on the platform. On July 31, the attacks exchanged their ZEC holdings for over 800,000 ETC and withdrew it from the exchange.

The first attack occurred on August 1, only to be followed up by the second attack five days later on OKEx.


The first solution that was implemented is called MESS, or Modified Exponential Subjective Scoring. Its predecessor was first suggested by Buterin back in 2014. To clarify, MESS does not make 51% attacks impossible, but very expensive to conduct.

MESS now builds upon the assumption that while small chain reorganizations that go back a few blocks are perfectly normal, the ones proposing these reorganizations going back hundreds and even thousands of blocks are highly suspicious.

Recent attacks have left honest participants out millions of dollars. By disincentivizing shadow mining, MESS weighs chains differently. One of ETC’s core developers, Isaac Ardis explained to CoinTelegraph that the intention with MESS is to weigh chains which occur and are available first, over chains that come later. For this reason, there is some incentive to publish work on the chain, hopefully disincentivizing chains that are defined in private and that would come later.

Ardis believes MESS to be a temporary solution, reminding the cryptocurrency and blockchain communities that no chain is immune from a 51% attack.

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