Ethereum Classic came to be after members of the Ethereum community implemented a time-sensitive hard fork (codenamed “DAO”). On July 20, 2016, at a block height of 1.92 million, Ethereum introduced an irregular state change via a hard fork in an effort to return approximately 3.6 million ether that had been taken from a smart contract known as The DAO. Almost everyone agreed that the ether taken had been stolen and that leaving it all in the hands of the thief would be of significant detriment to the development of the Ethereum ecosystem as well as the platform itself.

Returning the ether to its respective owners as though The DAO had never even existed was technically easy, if rather politically controversial. A number of people in the ecosystem disagreed with this change, believing immutability should be a fundamental principle of the Ethereum blockchain without exception; they elected to continue the original chain under the moniker of Ethereum Classic. While the split itself was initially ideological, the two chains have since evolved into separate entities.

The DAO was created by Slock.it, with the aim of providing community-based funding and governance for projects. The core idea was that proposals would be submitted, curators would manage proposals, funds would be raised from investors within the Ethereum community, and, if the projects proved successful, investors would receive a share of the profits.

The DAO was also one of the first experiments in an Ethereum token. Rather than funding projects directly with ether, participants would trade their ether for DAO tokens, use them to vote on project funding, and later be able to trade them back for ether.

DAO tokens were available to purchase in a crowdsale that ran from April 5 through April 30, 2016, amassing nearly 14% of the total ether in existence, which was worth ~$150 million at the time.

On June 9, 2016, developers Peter Vessenes and Chriseth reported that most Ethereum-based contracts that managed funds were potentially vulnerable to an exploit that could empty contract funds. A few days later, on June 12, Stephen Tual (cofounder of Slock.it) reported that The DAO’s code was not vulnerable to the bug described by Peter and Chriseth. Worried DAO contributors breathed a sigh of relief—until five days later, when an unknown attacker started draining The DAO using an exploit similar to the one for which the warning had been issued. Ultimately, the DAO attacker siphoned ~3.6 million ether out of The DAO.

Simultaneously, an assemblage of volunteers calling themselves the Robin Hood Group (RHG) started using the same exploit to withdraw the remaining funds in order to save them from being stolen by the DAO attacker. On June 21, the RHG announced that they had secured about 70% of The DAO’s funds (roughly 7.2 million ether), with plans to return it to the community (which they successfully did on the ETC network, and didn’t need to do on the Ethereum network after the fork). Many thanks and commendations were given to the RHG for their quick thinking and fast actions that helped secure the bulk of the community’s ether.

Fortunately, there were several safeguards built into The DAO: notably, all withdrawal requests were subject to a 28-day delay. This gave the community a little while to discuss what to do about the exploit, because from roughly June 17–July 20 the DAO attacker would be unable to convert their DAO tokens into ether.

Several developers focused on finding a viable solution, and multiple avenues were explored in this short space of time. Among them were a DAO soft fork, announced on June 24, to delay DAO withdrawals until consensus was reached, and a DAO hard fork, announced on July 15, to reverse the effects of the DAO attack with an exceptional state change.

On June 28, developers discovered a DoS exploit in the DAO soft fork and concluded that the DAO hard fork would be the only viable option to fully resolve the situation. The DAO hard fork would transfer all ether that had been invested in The DAO into a new refund smart contract, allowing the original owners of the ether to claim full refunds. This provided a solution for returning the hacked funds, but also meant interfering with the balances of specific addresses on the network, however isolated they were. There would also be some leftover ether in portions of The DAO known as childDAOs. A group of trustees would manually authorize the leftover ether, worth ~$6–7 million at the time.

With time running out, multiple Ethereum development teams created clients that allowed a user to decide whether they wanted to enable this fork. However, the client creators wanted to decide whether to make this choice opt-in (don’t fork by default) or opt-out (fork by default). On July 15, a vote was opened on carbonvote.com. The next day, at block height 1,894,000, it was closed. Of the 5.5% of the total ether supply that voted, ~80% of the votes (~4.5% of the total ether supply) voted for opt-out. One-quarter of the opt-out vote came from a single address.

Ultimately the decision became opt-out, so those who opposed the DAO hard fork would need to explicitly state their opposition by changing a configuration option in the software they were running.

On July 20, at block height 1,920,000, Ethereum implemented the DAO hard fork and thus two Ethereum networks were created: one including the state change, and the other ignoring it.

When the DAO hard-forked Ethereum (present-day Ethereum) gained a majority of the mining power, many assumed that consensus was achieved and the minority chain would fade away, as in previous forks. Despite this, a sizable portion of the Ethereum community (roughly 10% by value and mining power) started supporting the non-forked chain, which came to be known as Ethereum Classic.

Within days of the fork, several exchanges began to list both Ethereum ("ETH") and Ethereum Classic ("ETC"). Due to the nature of hard forks, all Ethereum users holding ether at the time of the split then held funds on both of the chains, and a market value for ETC was soon established with Poloniex listing ETC on July 24.

While the initial split was centered around The DAO, the two networks, Ethereum and Ethereum Classic, are now separate projects, although most development is still done by the Ethereum community and simply ported to Ethereum Classic codebases. Nevertheless, the full set of differences is constantly evolving and too extensive to cover in this appendix. However, it is worth noting that the chains do differ significantly in their core development and community structure. A few of the technical differences are discussed next.

Ellaism is an Ethereum-based network that intends to use PoW exclusively to secure the blockchain. It has no pre-mine and no mandatory developer fees, with all support and development donated freely by the community. Its developers believe this makes theirs “one of the most honest pure Ethereum projects,” and one that is “uniquely interesting as a platform for serious developers, educators, and enthusiasts. Ellaism is a pure smart contract platform. Its goal is to create a smart contract platform that is both fair and trustworthy.” The principles of the platform are as follows:

Several other forks have occurred on Ethereum as well. Some of these are hard forks, in the sense that they split directly off of the preexisting Ethereum network. Others are software forks: they use Ethereum’s client/node software but run entirely separate networks without any history shared with Ethereum. There will likely be more forks over the life of Ethereum.

There are also several other projects that claim to be Ethereum forks but are actually based on ERC20 tokens and run on the Ethereum network. Two examples of these are EtherBTC (ETHB) and Ethereum Modification (EMOD). These are not forks in the traditional sense, and may sometimes be called “airdrops.”

Here’s a brief rundown of some of the more notable forks that have occurred: