What is Ethereum Classic? The 2016 split and its proof of work - CryptoTicker.io

Ethereum Classic (ETC) is the continuation of the original Ethereum blockchain, which kept running unchanged after the DAO hack of 2016. When most Ethereum developers reversed the consequences of the hack through a hard fork in July 2016, a minority stayed with the old blockchain. That became Ethereum Classic: a smart contract network still secured by proof of work, with a fixed maximum supply of 210.7 million ETC and a reward for miners that cuts by a fifth every five million blocks.

On Sunday morning, November 15, one Ethereum Classic cost about €5.34, according to CoinGecko. The coin carries the name of the second-largest crypto network but works differently from Ethereum in key respects. ETC represents a more conservative approach with fewer protocol changes, no staking, and a monetary policy that caps supply rather than allowing inflation.

The DAO Hack Split

The DAO was a decentralized investment fund on Ethereum in 2016: a smart contract into which investors paid ether and through which they voted on projects. In June 2016, an attacker exploited a flaw in the code and drained a large portion of the deposited ether into a sub-contract. The majority, backed by the Ethereum Foundation, opted for a hard fork on July 20, 2016, at block 1,920,000, moving affected ether to a refund contract. Those who rejected the intervention kept running the old blockchain, which became Ethereum Classic.

Proof of Work Security

Ethereum Classic uses the ETChash algorithm for proof of work, introduced with the Thanos upgrade (ECIP-1099) in November 2020. Miners secure the network with computing power, solving cryptographic puzzles to add new blocks and receiving rewards. A new block is produced on average every 13 to 14 seconds. However, the network has faced security challenges, experiencing 51 percent attacks in August 2020 when attackers rewrote the blockchain multiple times, enabling double-spending of ETC worth millions.

Fixed Supply Policy

Ethereum Classic's monetary policy follows the 5M20 rule (ECIP-1017): every five million blocks, the block reward falls by 20 percent. The most recent cut came on July 22, 2026, reducing the reward to 1.6384 ETC per block. At the current block production rate, the next cut will occur in September 2028. About 75 percent of the maximum supply of 210.7 million ETC has already been issued, with annual inflation around 2.4 percent.

Ecosystem Differences

While Ethereum Classic uses the same Ethereum Virtual Machine and programming languages as Ethereum, its ecosystem is much smaller. It has adopted some Ethereum upgrades like Mystique (London features) and Spiral (Shanghai changes), but lacks the fee burn mechanism of Ethereum. Most users hold ETC as a store of value rather than using the network for complex applications, with fewer dApps and developers compared to Ethereum.