World after The Merge: Wait for Ethereum Classic Prices for Growth
The once popular, and in recent years – the half -forgotten cryptocurrency Ethereum Classic (ETC) has recently demonstrated impressive growth. Over the past 30 days, the cost of the asset has increased by more than 100%.
The price has revived against the background of the statements of Ethereum developers and the approximation of the migration date for the consensus algorithm Proof-OF-Stake (POS).
Recently, a large Antpool mining pool announced an investment of $ 10 million in the Ethereum Classic ecosystem. It has talked even more.
Many community members are interested in whether miners switch to Ethereum Classic after activating The Merge. If so, then how it will affect the quotes of cryptocurrencies, because the hashrate and complexity often correlate with the price.
- As the activation of The Merge approaches, the price of Ethereum Classic is growing rapidly.
- Many community members and especially miners perceive this blockchain as the main POW alternative to Ethereum.
- The likely success of a potential fork – ETH1 based on Pow – can weaken the demand for Ethereum Classic and its ecosystem products.
Features of Ethereum Classic
Ethereum Classic appeared after the collapse of the infamous project The DAO in June 2016. This cryptocurrency is the side result of the controversial hardform Ethereum, designed to enable investors to return their funds.
“We, as a community of sovereign persons, were united by a common vision of the continuation of the original Ethereum blockchain, which is really free from censorship, fraud or intervention of third parties,” the declaration of independence of Ethereum Classic said.
Many then called the project “stillborn”, but this turned out to be far from the case. Cryptocurrency for a long time holds the average indicators of market capitalization. Its current competitors in the ratings are Litecoin, Monero, Tron and other well -known projects.
After the hardform, the “uncompromising broadcast” was almost identical to Forsu. However, over time, the differences between projects began to express more clearly.
In March 2017, the developers of Ethereum Classic implemented a monetary policy, somewhat similar to bitcoin. She suggested a fixed proposal of coins and deflation schedule of emissions.
This has become a significant difference from the second capitalization of cryptocurrency. The latter was characterized by monetary flexibility, which gave rise to uncertainty.
The total supply of Ethereum Classic is limited to 210.7 million tokens. Remuneration of miners decreases every 5 million blocks.
The most important difference between projects is the adherence of the “original broadcast” to the Proof-OF-WORK algorithm. Ethereum developers, on the contrary, have been exploring POS capabilities since 2014.
Etc vs eth
Ethereum Classic has not become a strong opponent for Ethereum. There are fewer developers on it, and there are not so many applications in the ecosystem.
According to Defi Llama, the Ethereum Classic ecosystem is only $ 250,419 (as of 31.07.2022).
The first place of the rating is occupied by the Hebeswap platform. It is an fork leading Ethereum-Targes Uniswap. The second and third places are also occupied by DEX – ETCSWAP and SWAP CAT.
Nevertheless, Ethereum Classic still managed to implement solutions for scaling and interactiveness – Connext State Channels and Chainbridge from Chainsafe.
The hashrate “original ether” is small. This is one of the main reasons why the attackers managed to carry out a series of attacks of 51% in 2020. Developers increased the stability of the network activation of the THELOS.
However, according to the observations of the analyst Wolfi Zhao, Heshprase Ethereum Classic recently came close to Ethereum. In other words, against the backdrop of price growth, the profitability of the production of the “original broadcast” has become comparable to Ethereum.
The difference is also not comparable among the active addresses of projects.
Assets differ significantly according to other fundamental criteria, including the volume of bidding and capitalization.
Ethereum Classic has a much higher Sharpe coefficient. This means that potential profitability better compensates for the risk accepted by investors.
During the last market cycle, Ethereum Classic fell deeper in relation to the historical maximum price (ATH) compared to Ethereum. But in the summer of 2022, the “original air” was restored much more active.
Opinions of community participants
Journalist Colin Wu explains the continuing increase in the price of Ethereum Classic with the confidence of investors in the ability of the “original broadcast” Arab airline Emirates to get a significant hashrate and some users of the ecosystem of the second in capitalization of cryptocurrency.
Wu also emphasized that Ethereum Classic is supported by giants like Digital Currency Group (DCG). The Ethereum Classic Trust Foundation is the third in terms of assets of the DCG unit – Grayscale Investments.
Commenting on Antpool investment in the Ethereum Classic ecosystem, the head of Digital Currency Group Barry Silbert wrote that The Merge in Ethereum was sincerely happy.
Wu emphasized that the community of Ethereum Classic developers is very dispersed. It does not have leaders like Vitalik Buterin and a “centralized force” capable of promoting the project.
“Currently, there are practically no mature projects on Ethereum for deployment in the ETC emission,” the journalist noted.
According to him, the capacities and manufacturers of equipment for cryptocurrency mining are most actively promoting the capacity of capacities to the “original air” now.
“According to rumors, mining equipment for approximately $ 5 billion will become unequalled after The Merge,” wrote Colin Wu.
The journalist also expressed fears that the migration of leading miners on Ethereum Classic could instantly create attack risks of 51%. This is fraught with the emergence of many forks.
According to Wu, Ethereum Classic is now the best alternative to Ethereum in the context of attracting a hash, users, capital, Dapps and “motivated organizers like Sam Bankman-Fried”.
Ethereum founder Vitalik Buterin said that etc is a “very good chain” for Pow supporters.
Other rather interesting processes occur. For example, the Chinese miner and supporter of Ethereum Classic Chandler GO gains a group of developers to support the EThereum fork on the POW algorithm after The Merge.
A little more than half of the Galois Capital Twitter Surge, are sure that The Merge activation will be smooth.
However, a third of the respondents believes that during upgrade, Fork – ETH1 on the basis of the POW, for which Chandler GO, will be created, will still be created.
Almost 52% of respondents believes that the hashReit will be redirected to Ethereum Classic. 48.2% are sure that after The Merge, the aforementioned ETH1 on the basis of POW without a “complexity bomb” will become relevant .
The representatives of Galois Capital themselves noted that ETH1 has much better developed Defi infrastructure in comparison with the ETC and significantly higher onchain activity.
Reddit also arose hot discussions on the platform. Many community members are skeptical of potential fork. In their opinion:
- ETH1 will not attract users;
- Decentralized finances and NFT sectors will crash on a pow chain; The ETH1 tokens appeared as a result of the controversial hard fork to increase the steak in ETH.
Galois Capital analysts are also convinced that exchanges will prefer ETH2 tools.
conclusions
Ethereum transition to POS is already close. As the activation of The Merge approaches, hot disputes flare up.
Many miners support Ethereum Classic. Some, including the notorious Chandler GO, advocate the support of Fork – ETH1 based on Pow. “Luddites of the world of cryptocurrencies” easily understand: equipment for billions of dollars must be used somewhere after the most important update in the history of the broadcast.
It is possible that the revival of interest in Ethereum Classic will give an impetus to the development of the ecosystem and the growth of the hash. The latter often correlates with price and makes cryptocurrencies more stable to attacks of 51%.
On the other hand, the likely success of ETH1 based on the POW can weaken the demand for Ethereum Classic and its ecosystem products.
Be that as it may, the community is waiting for many interesting events and unexpected turns.
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