What is Ethereum Classic?
A hard-fork on the blockchain of Ethereum resulted into two versions of the cryptocurrency: the Ethereum (ETH) and Ethereum Classic (ETC). Soon after this fork, participants of the network were able to raise new tokens and these were named as ETH, while the old tokens that existed in the marketplace became ETC. The main reason behind the formation of this currency was a disagreement of the community members with Ethereum Foundation about DAO (Decentralized Autonomous Organization) hard-fork. This united the members of the community who owned “ethers” (token of ethereum), as a result of which users who had ethereum before the fork, now owned the equivalent amount ethers in their ethereum classic wallet.
Know More About The Fork That Segmented Ethereum
Ethereum functions on blockchain based on smart contracts i.e. software with self executing program that is able to automate various processes and associated transactions in a decentralized method. An application that is regarded to be a critical component of ETH is DAO apps which operate more sort of like a leaderless organization. When an attempt of establishing DAO was made in early 2016 (denoted as TheDAO), it generated a total worth of $150 million dollars through its world’s largest crowdfunding efforts.
Now, TheDAO was powerful and had the capabilities of doing anything. Unfortunately, TheDAO was hacked and over tens of its million dollars of ether got siphoned off and this ultimately brought the firm to an end. Such an incident raised doubts on the credibility of Ethereum and lead to a myriad of proposals to secure the network including hard-fork and soft-fork. Though the use of soft-fork would have been relatively simple that would freeze the funds that were stolen, still it possessed several complications that were not so easy to deal with. Finally, the decision rested with a hard-fork (splitting the existing blockchain into two): an old version that had the hack and an original one where investors would get their digital currency back in ethereum classic wallet.
The main concept behind the formation of ETC was, majority of miners and nodes on the network could upgrade to the new version and the old one would just vanish or wither away with time. Though that’s not what is happening at the moment!
Ethereum Classic: Why it Matters?
The main ethereum (ETH) happens to be the original one but revamped to manage potential hacks. The ethereum classic price on the blockchain is almost $15.5 per ETC, with an overall market capitalization of $130 million dollars. Many users believed that the split somehow violated the principles of leaderless decentralized systems and that too at such a point when these currencies have epitomized. They state that the hacker was only able to exploit a part of code that was structured using smart contracts which are transparent and open-source. So, the hacker found them and then acted on it to wipe off the funds. Put it simply, the smart contracts of TheDAO were encrypted with instructions and cannot be considered as hacked in a true sense, as it was neither changed nor broken by third-party.
Hence, instead of vanishing or withering away, ETC become a part of the expanding cryptocurrency family and were listed in exchanges, with their valued climbed up from $2.00 to $15.5, still the order magnitude of ETC is quite smaller compared to ETH. The Ethereum Classic price in INR has witnessed significant uptrend. At preset ETC stands to be the sixth most popular cryptocurrency of the globe, where Bitcoin leads the charts.
Ethereum Classic has paved the way to a war between members who are against the fork and who support the fork. Working with the two versions of the digital currency simultaneously can turn out to be quite tricky in the beginning. But, with time the users of Ethereum Classic India will only get used to the dynamics of the currency and the way it holds its presence in the market.
Does This Having Anything To Do With Bitcoin?
Current trends of cryptocurrencies showcase that whatever has happened with Ethereum Classic, can be a great insight for Bitcoin also. The idea of increasing block size, technical upwards based on the volume of transactions which a network is able to handle may not seem the right thing to do, but it definitely can turn out to be a great solution. Even though the core developers argue that hard-fork and that too continuous ones are dangerous because these can cause unpredictable consequences and thus should not be encouraged. However, there are certain bitcoin owners who support ETC, considering it to be an impressive way to update the codebase of the network.
Will Ethereum Classic Be Profitable in Future?
The components that drive value of ethers are still debatable, yet ETC has potential and this is because the community members have faith on it and those who are in support of the fork might invest on it and this is the reason why it is part of market exchanges. Since, this can be regarded as a clone to the original ethereum software, the ether owners are able to mine maximum rewards by having their account with ETC and then amplifying their balance. As, ethereum classic follows similar blockchain, only with few changes under the DAO’s transactional reversals.
If you had approximately $100 whose worth evaluated to 8 ETH then after the fork you get 8 ETC too, making total $16. So, people with too many ethers, where gifted with free money. This caused complications for exchanges, because if they were neglecting classic they were eliminating something that can be said as customer funds, simply by featuring ether during the split. Major exchanges have taken up the initiative by introducing ethereum classic as an alternate to ethereum, giving users an opportunity to trade ETC for ETH.
Poloneix was the first exchange to bring the change and was later followed by prominent ones such as Bitfinex, Shapesfit and Karken, this means majority of the exchanges accept and welcome ETC investors. The scope of profit lies when you switch the currency, and investors even consider it to be a way to double-up the value.
What does it Indicate For Ethereum?
The attention that people have on ETC might just fade away, or it won’t. Take bitcoin classic, for example the version is active, even though it was not able to replace the power of Bitcoin as its engineers had presumed. The chances are there will be two independent forms of ethereum that will continue to expand on different paths in future. As of now, the inception of this protest blockchain allowed minorities to structure their system, and taking an account of Ethereum Classic price many think it as a good way of development.