Following the unprescedented hard fork in the Ethereum blockchain in July, which effectively reversed transactions where a hacker stole tens of millions of dollars worth of Ethereum's virtual currency, known as ether, two versions of the Ethereum blockchain now exist post-fork: Ethereum (ETH) and what is now being called Ethereum Classic (ETC).

The Fork That Created Two Ethereums

Ethereum was built as a blockchain implementation explicitly made for smart contracts - self-executing pieces of software that can automate all sorts of transactions and processes in a decentralized manner. One application built upon these smart contracts is the notion of a decentralized autonomous organization (DAO) that can function essentially as a leaderless, decentralized, blockchain-based firm. So when the first serious attempt at creating a DAO took place earlier this year (which was known as TheDAO), it raised over $150 million worth of digital currency in the largest crowdfunding effort so far to date. But before TheDAO could actually do anything, a hacker found an exploit in its smart contract code and siphoned off tens of millions of dollars worth of ether, ending TheDAO and casting doubt on the viability of Ethereum.  (See also: Is Ethereum More Important Than Bitcoin?)

As a result of TheDAO hack, the Ethereum community proposed a number of measures including a soft-fork and a hard-fork. The soft-fork version would have been a simple software patch that would be backwards compatible and effectively freeze the stolen funds so the hacker could not use them. However, this opened up a whole new set of issues that would have been difficult to prevent. Ultimately, the community voted in favor of a hard-fork, or splitting the blockchain into two forks, a version where the original DAO invesors receive their digital money back and the hack never happened, and the old version that contained the hack. The idea is that soon afte the hard-fork, the vast majority of nodes and miners on the Ethereum network will update to the new version and the old version will simply vanish. (For more, see: Why the Ethereum DAO is Revolutionary)

That is not exactly what is happening now.

Ethereum Classic

The new version of the blockchain is the "main" Ethereum (ETH), with the hack rectified. The digital currency on this blockchain is worth around $12.50 per ETH, with a market cap of just over $1 billion in aggregate. Some users, however, felt that the hard-fork went against the spirit of leaderless, decentralized systems that digital currencies and blockchains have come to epitomize. They argue that the hacker merely exploited an existing piece of code that was built into a smart contract that was open-source and transparent - that only the hacker found and acted on the exploit is a moot point. In other words, TheDAO smart contract simply carried out valid instructions and wasn't "hacked" in the traditional sense of the word in that it wasn't broken or changed by an outside party. (See also: Ethereum Soars After Brexit Vote Despite Cyberattack)

As such, these purists object to the "moral" justification of rolling back those "bad" transactions and have continued to mine the old version of the blockchain, what has become known as Ethereum Classic (ETC). Rather that withering away and vanishing, ETC became listed on cryptocurrency exchanges - and has seens it's value climb to around $2.00 per ETC, putting its market cap at around $130 million - an order of magnitude smaller than ETH, but substantial nonetheless (in fact, ETC is now the sixth most valuable digital currency - Bitcoin being the most valuable). (For more, see: How to Mine Ethereum on Your Computer)

So what we are seeing now is an idealogical war between those who supported the fork (which was the vast majority at the time) and those who don't. Having two versions of Ethereum existing side by side can cause a number of issues if not understood correctly (for example, in ETC world, TheDAO hacker still has succeeded!). It also creates conflict for smart contract developers who must choose which path to build upon. Those who worry that their smart contracts may be overridden by consensus from without may opt for Classic. Ethereum developers don't like this option and have even gone so far as saying they may try to execute a 51% attack on ETC's blockchain - since it has much less mining power behind it than ETH at them moment - to kill it off once and for all.

The Bottom Line

Ethereum has been going through some turmoil lately following the hack of TheDAO and the subsequent decision to implement a hard fork. This has divided the Ethereum community allong idealogical lines and has also resulted in two disparate versions of the Ethereum blockchain, the forked version and the old version, now known as Ethereum Classic. The value of Ethereum Classic has actually enjoyed a spike in recent days, with its market cap now exceeding $130 million.