Ethereum Classic had a flying start to the decade with a massive upsurge in its price this January. It indeed shed light once again on the project and we’ve been hearing people hinting that ETC is back in the race. There are a ton of contributing factors and in this post, ChangeHero will give you an outlook of Ethereum Classic and reasons for the buzz around it.
For the freshmen, Ethereum Classic is a decentralized platform that processes smart contracts — applications which run only when certain programmed conditions were met and enable transactions without any intermediaries. The platform is fueled by its native cryptocurrency ETC. There is a general misconception on Ethereum Classic coming into existence due to the infamous DAO hard fork. But in reality, Ethereum emerged as the new chain after the forking.
DAO — The Instigator
The story of Ethereum Classic and Ethereum is spiralled around the infamous DAO hack. Before the split, the Ethereum team developed the Decentralized Autonomous Organization (DAO) with aims to revolutionize the network. It is a complex smart contract, which was supposed to be a venture capital fund to support the development of decentralized applications built on the network. Users who wanted to have a say in the development of DApps had to buy DAO tokens to take part in the voting. Within a few days of the announcement, the crowd sale had accumulated $150 million in Ether.
Creators of the DAO also provided an exit strategy for those who wanted to leave. Though there was a bit of backlash regarding this, developers assured that it would not be a big issue. The storm struck on 17th June 2016 when a hacker exploited that loophole and stole $50 million dollars. FUD escalated in the community and as a result Ether price plummeted.
The community settled down on counteracting the mishap with a hard fork at the block before the DAO attack. Despite a majority of them favoured in performing a fork to adopt new rules, a portion of the community decided to stick with the old protocol stating that the consequences must be faced and no changes will be made to the network. On July 20th, 2016, at block 1,920,000 the hard fork was performed and the new chain “Ethereum” was formed, and old blockchain was renamed as “Ethereum Classic.” It was one of a kind forking in the history of crypto that was solely based on ethical and ideological views. ETC remained the same till today following the founding principles of the network which is immutable blockchain and resilient against human whims.
As discussed earlier, Ethereum Classic enables the users to develop DApps on the platform which executes the transactions when preset conditions were met. The network has its own native cryptocurrency called Ether Classic that trades with the ticker ETC. It can be used to develop and execute apps on the network, process payments and can also be used for trading. The network falls short in terms of scalability as it uses PoW and will not be upgrading to the PoS and also the team lacks a strong developer support.
Albeit the lack of bigwigs, ETC performed decently and remained one of the most valuable cryptocurrencies in the market. Lately, ETC once again caught the attention of crypto savvy when its price shot up by 170% within a month. As of writing, ETC is being traded at a price of $12.04 with a total market cap of 1.4 Billion Dollars. Many reasons appear to contribute to this price action. One of them being Greyscale Investments pledging two more years of financial support to ETC and the other might probably be the ETC labs generous contribution of $1 Million to the UNICEF to fund blockchain startups which aim to solve the social issues. On a technical level, the network successfully executed Agartha hard fork improving the interoperability with Ethereum Blockchain. Moreover, the networks hashrate hit an all-time high of 20.65 TH/S recently indicating the growing interest of miners towards ETC.
Philosophical Stance: Code is Law
With more DeFi projects making its way to the blockchain and a head-start to the decade hints that Ethereum Classic has got the potential to climb up the ladder. Amid the setbacks, ETC is working its way to deliver a sustainable blockchain solution to the community. On the whole, Ethereum Classic is a promising blockchain project that stands true to its philosophical grounds and safeguards the immutable nature of the blockchain.