Ethereum vs Ethereum Classic: Which should you trade?

Ethereum and Ethereum Classic are two similar blockchains, but in stark contrast. Ethereum is ranked as the second largest cryptocurrency, with a market capitalization of $ 185.4 billion. Ethereum Classic is ranked 22nd with a market capitalization of $ 3.4 billion. So what distinguishes them?

Ethereum Classic is an Ethereum hard fork

Ethereum Classic was founded in 2016 as a hard fork on the Ethereum blockchain. It was after a major hack in Ethereum. Ethereum Classic relies on its native cryptocurrency, ETC, to carry out transactions. Both Ethereum and Ethereum Classic have smart contract capabilities. They are decentralized and privacy protection is paramount on both blockchains.

Nevertheless, like most hard forks, forked blockchains have some unique attributes. Ethereum Classic is a proof of work blockchain. The miner needs to solve a math problem to verify the transaction. After that, you will be rewarded with ETC tokens. Ethereum is running on a PoW consensus mechanism, but is moving to Proof of Stake. Users need to bet ETH to become a validator, a process that consumes less energy. The transition to PoS or merger is expected from September.

Another big difference is that there is no upper limit to the supply of Ethereum. Nevertheless, developers set a 4.5% base increase each year. The combustion mechanism helps reduce supply. Conversely, the supply of Ethereum Classic is fixed. The maximum supply on the market is 230 million and tokens cannot exceed the limit.

Which should you invest in?

Ethereum ranks higher than hard forks in market ratings. Already dominant in the NFT and DeFi sectors. For PoS enthusiasts, Ethereum will be at the top of the list with future mergers. However, when considering a cheaper ETH alternative, Ethereum Classic is a top priority. You can see that the price trends of both tokens are similar. Investing in both tokens depends on the interests of the investor.