Ethereum Classic is a direct descendant of the Ethereum cryptocurrency. After more than $50 million of cryptocurrency was stolen from the decentralized fund of the DAO, Ethereum developers canceled the transaction, returning the crypto nodes to the state before the theft. However, some users did not agree with this decision and continued to support the abandoned chain of blocks. Updates to the Ethereum Classic network are released regardless of updates to the Ethereum network. And if the Ethereum crypto nodes eventually move from the Proof of Work to the Proof of Stake algorithm, the Ethereum Classic nodes will not be affected by this update.

The system of interaction between public nodes of the Ethereum Classic cryptocurrency has been taken from the Ethereum cryptocurrency. As well as for Ethereum, there are software wallets for storing Ethereum Classic. Each device with the wallet program installed becomes a light public node of Ethereum Classic. These free public nodes are also called Ethereum Classic relay crypto nodes because they only transmit transactions without writing them to a blockchain. Over time the transaction reaches the full Ethereum Classic public node which performs a detailed check and writes the transaction to the blockchain or rejects it. There is no compensation for owners of full Ethereum Classic nodes.

Ethereum and Ethereum Classic cryptocurrencies have common features. Like the original Ethereum, there are software wallets for Ethereum Classic and an Ethereum Virtual Machine (EVM) that allows you to run decentralized applications. Both cryptocurrencies rely on the nodes provider system for transaction checking. It is also possible to create custom tokens based on Ethereum Classic. Miners of Ethereum and Ethereum Classic use powerful graphics cards and ASIC devices. To calculate the block, miners of both cryptocurrencies are combined into pools. Both cryptocurrencies use Gas to pay transaction fees and execute smart contracts. The amount of Gas depends on the complexity of the smart contract being executed and the workload of the ETC nodes. ETH and ETC emissions are not limited, but the software algorithm gradually reduces the amount of reward per block in both cases.

Three updates (hardforks) have already been released in the Ethereum Classic network. All of them are aimed at improving the compatibility of Ethereum Classic nodes and original Ethereum crypto nodes. Also, software wallets updates are released regularly. There is support for cryptocurrency ETC in some third-party wallets as well. GasReprice update protects cryptocurrency from DdoS attack. Decentralized applications are being developed that will run on the Ethereum Classic network. Thanks to cooperation with Storj Labs, it is planned to connect Ethereum Classic nodes to cloud data storage. This will significantly increase the syncing performance of an Ethereum Classic node. The technologies used are the Freezer feature and the Storj decentralized cloud. Freezer separates the database into two parts – recent blocks and blocks that are older than a cutoff threshold.

Cryptocurrency Ethereum Classic becomes vulnerable due to a lack of miners. Attackers captured control over Ethereum Classic nodes twice, successfully performing 51% attack. This led to losses of a cryptocurrency over $10 million. Also, the lack of miners leads to an excessive centralization of pools, when only two pools control almost all the power of this cryptocurrency. To overcome these problems, the Ethereum Classic network needs to become more decentralized and increase the number of blockchain nodes providers. Also thanks to the cooperation with IOHK cryptocurrency Ethereum Classic received an update of the protocol called Ouroboros Byzantine Fault Tolerant (OBFT). Implementation of OBFT protocol will help to set control points in some blocks. This will allow blockchain nodes providers to find and reject blocks slipped into the network by cybercriminals.