A hack is "the act of manipulating a system". In the case of Ethereum, we are talking about both the hack as manipulation and the split of the blockchain. Let's take a step back in time. 
 
What were you doing in 2014? If you were travelling not far from Zug in Switzerland at that time, you probably passed by a shelter where Ethereum developers worked to establish the foundations of the platform we know today, under the benevolent eye of Swiss authorities. In fact, Switzerland is currently welcoming crypto-blockchain initiatives with open arms. The canton of Zug wants to become the global cradle for the development of crypto projects and the nickname "Crypto Valley" has already been given to this geographical area. Vitalik Buterin and his teams are certainly a part of this. While the development of the platform was progressing rapidly with the arrival and departure of developers within Ethereum, June 17, 2016 signed the unprecedented turning point for the platform.
 
A flaw in a DAO 
 
In 2016, a decentralized anonymous organization (DAO) was formed on Ethereum. To put it simply, a DAO is similar to a company's board of directors, but this time the board is decentralized and it is necessary to hold a certain amount of ether, Ethereum's digital currency, in order to obtain a voting right. A sort of techno-democratic approach based on the underlying blockchain's computer code, removing the need to go through centralized structures for investors-stakeholders of a project. At that time, via a DAO, a token sale, which was to last 28 days, was launched to raise funds from investors. Within three weeks, more than $150 million was raised from over 10,000 early investors. But concerns have been raised by developers about the vulnerability of the DAO to a potential hack of a smart contract holding the investors' funds. 
 
The DAO hack 
 
While programmers were trying to solve a major technical problem, a hacker exploited the vulnerability and siphoned funds from the DAO smart contract. This event not only meant a significant financial loss for investors, but it also called into question the reliability of Ethereum. It must be said that at the time, the hacked DAO was collecting more than 10% of all outstanding ethers. To ensure the survival of the platform, exceptional responses had to be made.
 
The Soft Fork failed
 
A first solution was brought by Vitalik Buterin: a soft fork (a backwards compatible modification of the consensus rules on the blockchain, which can be for example the introduction of new rules between operators) was proposed to blacklist the hacker and prevent him from moving the stolen funds. It turned out that this soft fork also had flaws making it vulnerable, once again, to hackers with treacherous intentions. After multiple failed attempts to recover the funds and protect the network, the ultimate solution was put on the table: the Ethereum hard fork.
While the moral, conceptual, technical and philosophical foundations of Buterin's blockchain are being questioned, a hard fork was executed after much debate. This event brought back the history of the network before the DAO hack, and thus made it possible to return the funds to investors via a new smart contract. In the process, the technical problems associated with the failed smart contract were resolved. But the immutable and incensurable aspect of blockchains is then questioned. It is now possible to go back to the past if the majority of developers and stakeholders want to. For this to happen, developers do not have the unilateral power to implement such changes. It is necessary for all miners and node operators (computers connected to the blockchain) to update their software in order to perform the backtracking. 
 
Ethereum splits in two
 
The majority of stakeholders on Ethereum were in favor of the hard fork, and after heated debates and despite the fact that not everyone agreed on this change, on July 20, 2016, at block 192,000, the hard fork is executed and Ethereum splits into two.
Hard Fork Blockchain
Source: blocknet.co

Ethereum (ETH) becomes the "new chain" and on its side the historical blockchain takes the name of Ethereum Classic (ETC). Those who refused to accept the hard fork initiated by Vitalik Buterin supported the original chain. For them, no matter what happens, the blockchain must remain immutable and cannot be censored and Buterin did not respect these fundamental principles.
 
While the tokens were returned on the new blockchain (ETH) to investors, the hacker still held the tokens on the original Ethereum Classic chain (ETC). Obviously, this hack via DAO caused quite a stir at the time, despite a much smaller community than today, and I can't imagine what the consequences of such an event would be now after a much more massive adoption. If we take a step back, Vitalik Buterin and his teams have certainly made the right decision to ensure the survival of the blockchain, and bring it to what it is today: the reference platform for building Dapps (decentralized applications) based on smart contracts. However, ETC did not have the same success.
 
ETH vs ETC 
 
Ethereum Classic (ETC) ranks 34th in terms of capitalization, weighing more than $3.5 billion all the same. The ETC token has a performance of more than 460% since the first of January 2021. 


ETH/USD

Ethereum, for its part, is positioned second in the market, behind bitcoin, with a capitalization of around 330 billion dollars. The ETH token has a performance of more than 260% since the first of January 2021. 
 
While ETC has been outperforming ETH for the past 1 year, this has not been the case since the split in July 2016 :
 
Even though we are on stratospheric swings for both cryptos, ETH is performing six times better than ETC in the span of six years.
Today, Vitalik Buterin leads Ethereum with an iron fist and the platform is now considered by many professionals and individuals as one of the most promising blockchain platforms of the coming years. But from now on, we keep in mind that the events we mentioned in this article are conceivable in the future on a blockchain scale.