What is Ethereum Classic? How Does It Work? Is Ethereum Classic a Good Investment?
If you have any question about Ethereum Classic, you have come to the right place! In this article, I will be discussing Ethereum Classic in detail. I will explore the potential of Ethereum Classic as well as the risks it faces.
Ethereum Classic Review
Name: Ethereum Classic (ETC)
Short Review: Ethereum Classic is a decentralized platform that allows users to run smart contracts. Smart contracts are applications that run as programmed by users without the possibility of a fraud, downtime, censorship or third-party interference. The platform is fueled by a token known as classic ether which can be transferred between participants and stored in a cryptocurrency wallet.
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What is Ethereum Classic?
Ethereum Classic is not a new cryptocurrency but simply a split from an existing cryptocurrency, Ethereum. Ethereum Classic was split from Ethereum after the occurrence of a hard-fork. The Ethereum Classic still provides its users with Ethereum features, including creation and deployment of smart contracts and decentralized applications, and it has similar specifications like average block time, size, and reward.
Ethereum Classic vs Ethereum – Why Did the Split Happen?
The Ethereum platform works based on the concept of smart contracts, which are automated contracts enforcing and facilitating the terms of the contract itself. The DAO (Decentralized Autonomous Organization) was a complex smart contract that was geared towards revolutionizing the Ethereum platform forever.
It was a decentralized venture capital fund that was to fund all the future DAPPS (Decentralized Applications) made in the ecosystem. For you to have a say on the direction that DAPPS would get funded, you had to buy DAO token for a particular amount of ether. Possession of DAO token was an indication that you officially belong to the DAO system. 28 days after the formation of DAO, it accumulated ether worth over $150 in a crowdsale.
There was a condition in the contract, once you split off from the DAO, you had to hold your ether for 28 days before being allowed to spend them. However, most people saw this as a loophole that could be exploited by hackers.
The DAO team failed to take action to close this loophole which was later exploited by hackers that led to the loss of about $50 million dollars on 17th June 2016. This attack orchestrated the split of Ethereum into 1.Ethereum and 2.Ethereum Classic.
The Ethereum supporters argued that the Ethereum code should be modified and the stolen coins refunded, while the Ethereum Classic supporters argued that “code is law” and whatever happened has happened. The Ethereum Classic (ETC) maintained the original Ethereum code while the Ethereum (ETH) forked the code so as to create a new Ethereum.
This led to the presence of two competing cryptocurrencies but with different exchange rates. Today, the price of ETH is a bit higher and has been made much available to the cryptocurrency community, making it more accessible.
How Does Ethereum Classic Work? / Benefits of Ethereum Classic
The Ethereum Classic stays true to the immutability philosophy of blockchain. You can write smart contracts on the platform on your own and no one will be able to change them. The code for the smart contract can be made available across the Ethereum Classic blockchain network.
Ethereum Classic provides its users with a “Turing Complete” virtual machine distributed on the blockchain network, and it comes with an in-built programming language capability. The developers are provided with a platform on which they can write code or develop applications that can solve any computational problem through mining process.
There is a need to promote the efficient allocation of the available resources to the nodes and ensure that the network is safe from spammers. Ethereum classic achieves this by use of an internal pricing mechanism known as Gas. The Gas system is responsible for rewarding all the mining activities done by miners on the network.
Ethereum Classic acts like a supercomputer on the blockchain, enabling the distribution of processing power required for running smart contracts and applications on the network. The developers and other participants on the network are paid for the effort in developing and launching of the smart contracts as well as other computational activities.
The miners on the Ethereum Classic network are paid in classic ether token (ETC). The ETC can be traded on the major cryptocurrency exchanges. The ETC can be stored on cryptocurrency wallets, and it can be transferred from one holder to another, and it is used for paying members for the computation work they offer on the platform.
Risks of Ethereum Classic
The major problem facing Ethereum Classic is that it faces a direct competition from Ethereum. The ETC lacks backward compatibility with ETH. All Ethereum community heavyweights have moved to the new chain, that is, Ethereum, meaning that anybody who is part of ETC will not be in a position to access any updates done by ETH.
ETH is moving from POW (Proof of Work) algorithm to POS (Proof of Stake) algorithm. ETC will not enjoy this benefit since its software doesn’t allow any updates. According to most cryptocurrency lovers, ETC is seen as an attack on Ethereum itself. This is because, after the split of Ethereum into ETH and ETC, those against ETH supported ETC in an effort to disrupt the Ethereum community.
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Ethereum Classic Team
After the DAO attack, some people stepped up to support Ethereum Classic but none of them has become famous. With time, the ETC Development team has grown to feature a team of engineers and professionals in software development who are committed full-time to the success of this project. The ETC team is led by the following members:
- Constantine Kryvomaz- Rust Developer
- Igor Artamonov- Founder and CTO.
- Richard Schumann- Graphic Designer.
- Isaac Ardis- Go Developer.
- Wei Tang- Rust Developer
- Yury- Yury Developer
- Tomasz Zdybał- Go Developer.
The ETC team also comprises a handful of advisors who include the following:
- Matthew Mazur
- Avtar Sehra
- Cody Burns
- Yates Randall
- Elaine Ou
- Roy Zou
The ETC team is expected to grow further. It already has a breadth it will help them to move forward.
Ethereum Classic Community
Ethereum classic is an open source platform and it is active on a number of social media platforms on which you can participate and contribute. Ethereum Classic discussions are done on Slack, Reddit, Facebook, Twitter, and Telegram. Here is some information on social media platforms that they are using:
- Reddit +7,7k users
- Facebook +6k followers
- Twitter +189k followers
- Telegram +7k followers
Is Ethereum Classic (ETC) Worth Buying?
There are two major holders of ETC who would push the price of the token down in case they release their tokens into the market. The Ethereum Foundation is still holding 10 percent of the ETC they received after the hard fork happened on the Ethereum blockchain. The DAO hacker is also holding about 3.36 million Ethereum classic, and this amounts to about 3.65 percent of the total ETC in circulation.
If any of the above parties sell their tokens, the price of ETC will be pushed down further. Also, the ETC blockchain is not used for development of serious applications. It is also not used for creating smart contract solutions that can be used in commercial industries.
However, should ETC developers choose to develop industry-relevant smart contracts and applications, then ETC will become a good investment option. If this happens, I will also invest in it. However, I think it is a very promising cryptocurrency that may take ETH in the future.
Ethereum Classic (ETC) Price Prediction
The Ethereum Classic Was started in July 2017 with a low price of $2.2 USD. Since then, the price has to show a positive growth. Currently, the price of ETC fluctuates while marinating a limited range of between $28 USD and $35 USD. This has made it grab the attention of investors.
Some people expect that the price of ETC might go up to reach 100 USD by the end of 2018. However, the value of ETC will be determined by its relative price compared to that of other cryptocurrencies such as ETH.
Conclusion – Is Ethereum Classic (ETC) a Good Investment?
Personally, I think NO! I chose to invest in ETH rather than in ETC. I think for ETC to become a good investment opportunity for cryptocurrency enthusiasts, its development team must spearhead the development of industry-relevant smart contracts and applications.
Note by Roope:
I agree with Nicholas. I have also invested in ETH rather than Ethereum Classic. I believe that the price of Ethereum will keep on moving up in the future. So many new cryptocurrency tokens are built on the Ethereum platform that it has already a huge value and it just keeps on growing.
That being said, this is not a financial advice and you need to know that you can win or lose money with cryptocurrency investments.
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What Do You Think about ETC?
Is It a Good Investment?
Will you Invest in ETC?
Let’s discuss in the comments below!
(Disclaimer: This article is not a financial advice. It only represents my personal opinions and thoughts on Ethereum Classic.)