E

thereum was founded by Vitalik Buterin in late 2013 and went live on the 30th of July, 2015. While working on Bitcoin, Buterin believed that Bitcoin itself needed a scripting language for application development. After failing to convince his team, Buterin decided to go rogue and secure his own funding to develop Ethereum.

The result of that was an open source public blockchain-based distributed computing system and operating system featuring smart contract functionality. Essentially, it is a platform that helps with the creation of DAPPS (decentralized applications) without using a third party.

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In the beginning, Ethereum (ETH) had a successful start with 72 million coins “premined” when it went live, but soon fell into a divisive future. To truly understand Ethereum’s winding history, you have to understand The DAO Project first.

The DAO (Decentralized Autonomous Organization) project is an application built on top of the ETH block chain. It’s a complex smart contract that lets its members have a say in what DAPPS to fund. It works like a hedge fund that collects funds to invest in other applications.

Image by WorldSpectrum from Pixabay

To become a DAO member, you have to exchange Ethereum for DAO coins. The DAO project was ahead of its time, it was flexible and allowed complete control and transparency for users. Unfortunately, this is where the history of ETC takes a turn and reaches a fork in the road.

On June 17th, 2016, an exploitation of a flaw in The DAO project alarmed the community. 50 million dollars were stolen through a flaw in the blockchain causing pandemonium.

Immediate action was taken, and the consensus was to split the chain in order to reverse the theft. The resulting action was a hard fork--an upgrade that’s not backward compatible-- of the ETC chain creating a new chain, ETH. That means that ETC would not be able to reap the benefits of the updates made in ETH. Following this split the Buterin, his investors, and many prominent crypto enthusiasts switched to the new chain.

This simple solution solved a disastrous problem. The Ethereum community came together, but the split also caused a huge philosophical divide in the cryptocurrency world. Although the big guys moved to ETH, crypto idealists stuck with the original Ethereum chain, ETC. The reason being that many believed in cryptocurrency as a stance against financial corruption and human interference.

The hard fork meant otherwise. Splitting Ethereum because of one hack defeated the purpose of cryptocurrency in the crypto-idealists’ minds. On the other hand, others believed that the anti-Ethereum camp openly supported ETC to cause disruption in the Ethereum community.

Image by WorldSpectrum from Pixabay

In the end there is little difference in the two chains. The only problem is that since ETC hard forked, it cannot take on any new updates that are in ETH. Ethereum developers only work on ETH following the move of Buterin.

Other than crypto idealists shunning the new chain, there is still the worry that the new chain may split again. If there was human interference once, there may be another chance that it could happen again, which would greatly devalue the chain.

However, the good thing is that the Ethereum community is decentralized and a democracy. To allow another split would mean that the majority of the members would have to agree to the split.

The likelihood of this happening is very slim. The great divide is almost over.

If you find this content useful, share it with your friends or on social media to spread bitcoin awareness! Visit our ReadBTC Forum to have discussions with fellow Crypto Enthusiasts.

Updated on
October 27, 2019
 in 
Crypto
 category

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