Ethereum Classic — Market Analysis – Exchange Union

Is the original chain better or worse?

Ethereum Classic (ETC) was created during Ethereum’s hard fork in July 2017. It forked because significant amount of Ethereum (ETH) was stolen by hackers and the majority of Ethereum community agreed to hard-fork in order to remedy the loss. Now ETH runs on the new for ever since. Meanwhile, a group of people still supports the original blockchain of Ethereum and renamed it as Ethereum Classic with ETC as its symbol. Thus, ETC was created.

Not long after the hard-fork, supporters have announced the Ethereum Classic Declaration of Independence. It shows that the supporters disagreed with the new Ethereum because they think it breaches the immutability of blockchain by changing the original consensus, which they regard as one fundamental pillar of Ethereum. ETH, on the other hand, intends to avoid the attackers to benefit from their illegal act. Ultimately, the debate between ETH and ETC is like a debate about “utilitarianism” and “categorical justice”. One can always debate which one is more important, whether to make everyone get what he deserves, or to maintain the original rule maintained.

Personally, I don’t think there’s right or wrong between ETH or ETC, but I’m very impressed how the ETC supporters kept the original consensus alive after the majority left it.

Although many thought ETC will ultimately disappear in the first few days, it remains to be one of the best known cryptocurrency. There’s still one big concern about ETC, that an ample amount of ETC — estimated to be 3% of circulating supply of ETC — are still held in the hand of the hackers. If they sell the token sometime — almost for free — it will deeply hurt the price of ETC. But I don’t think it’s a viable concern, because if we regard the hackers as an “economic rational person”, whether they get their coins for free or not, they want to maximize their benefit — the same goal as the major holders of ETH or any other coins. The danger of the hackers selling their entire ETC at once is therefore no bigger than the major holders of any other coins doing the same thing. Thinking about how many ETHs does the Ethereum Foundation hold, or the holding proportion of all the popular ICO coins, I personally don’t think ETC is the one with the biggest dumping danger.

ETC as the coin with high potential

Source of Data:

After Poloniex’s ETC listing, the price of ETC has dropped until the cryptocurrency boom this year. Since March, the price of ETC in USD has risen a lot. Nevertheless, the rise of ETC is slower than many other cryptocurrencies. The ETC/ETH price ratio has shown that the ETC was once more than 20% that of ETH, and stayed at 10% for a certain period. But since the boom of ICO, ETH is much more frequently used than ETC, causing the ETC/ETH price ratio down to around 5%. That is to say, the relative price level of ETC is low compared to historical data and the potential of ETC remains high.

The next step of ETC

There’re reasons why ETH is more frequently used for building DApps than ETC, even though they are technically extremely similar. One reason is that many of the current virtual machines — a kind of tools needed for building applications on blockchain — on ETC prohibit use for business purpose. This will be changed soon. According to ETC developers, a new powerful virtual machine that is open source and open for any purpose will come early 2018. With all the technology that is already implemented on ETH chain, more applications can be easily built on ETC with the new virtual machine, and this could attract a bunch of project developers given the transaction fees on ETC is more attractive than ETH.

On 2nd Dec. 2017, ETC has announced the cut of coin generation speed, giving a maximum supply of ETC at 230 million. It will also stick to the PoW consensus and cancel the shift to PoS. This makes ETC a bit more different from ETH, which has no maximum supply and will shift to PoS in the near future. People will generally recognize the unique value of ETC, not just as the “old chain” of ETH.

The ETC community also announced their plan to implement ETC in the internet of thing industry. “To better the use of IoT apps, the ETC community has customized a development plan for cross-chain operation … fragmentation and side-chain technologies have been devised to guarantee security and enhance efficiency.” The short verification period of ETC and the relatively low transaction fee is perfectly suitable for IoT. Estimation is given that by 2025, if ETC can obtain 10% data flows from IoT devices, the price per token will enjoy a more-than-ten-fold increase.

Note: this article is the personal opinion of the Author, and should not be treated as the opinion of any company or organization. It also should not be regarded as professional financial investment advice.

Best Ethereum Site

Leave a Reply

Your email address will not be published.