Some people don’t like to change, even cryptocurrencies.
- Ethereum Classic does not plan to follow his brother Ethereum and switch to another mining model.
- The merger of Ethereum will switch blockchain to a more sustainable proof of stake system.
- Prices for Ethereum Classic are skyrocketing as Ethereum miners throw their weight behind the old way.
Introducing the Ethereum Classic (ETC), also known as the “original” Ethereum. Ethereum Classic has risen by more than 60% in the last 7 days and more than 150% in the past month, according to CoinMarketCap data. This is far superior to both Bitcoin (BTC) and Ethereum (ETH), making it the best performing project of the top 50 ciphers by market capitalization this month.
What is driving the soaring prices of Ethereum Classic?
The Ethereum Classic was born in 2016 after the division of the Ethereum community due to disagreements. What is now known as Ethereum has diverged into a new blockchain, while Ethereum Classic continues the original blockchain. Today, the long-awaited merger of Ethereum is scheduled for August, and some political parties are anxious for the past. Two of the main reasons for its dramatic growth are:
1. Proof of Stake is not for everyone
With the merger of Ethereum, the network will switch from an energy-intensive mining system called Proof of Work to a more sustainable Proof of Stake model. The idea is to reduce blockchain energy consumption by 99%. It also paves the way for further upgrades to make Ethereum more scalable and reduce network congestion.
However, there are risks associated with this move. Proof of stake is not as load-tested as the proof of work that both Bitcoin and Ethereum have used to keep their networks secure. Other ciphers such as Cardano (ADA), Polkadot (DOT) and Avalanche (AVAX) all use Proof of Stake, but not as big as Bitcoin or Ethereum.
However, the main opposition to the merger comes from current Ethereum miners. When Ethereum switches to Proof of Stake, miners who spend billions of dollars on computer equipment will not be able to mine ETH. Some people are looking for new ways to use the device, but one option is to mine ETC instead. Ethereum Classic does not switch to Proof of Stake.
At a recent meeting, the man behind Ethereum, Vitalik Buterin, said that anyone who doesn’t want to switch to Proof of Stakes will find a welcome community in Ethereum Classic. “If you don’t like Proof of Work, you’ll have to use Ethereum Classic. It’s a perfectly great chain,” he said. This is widely reported as ETC approval.
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2. AntPool’s $ 10 million investment
AntPool is one of the top cryptocurrency mining platforms. It recently announced that it will invest $ 10 million in the development of the Ethereum Classic ecosystem. At a recent digital mining event, AntPool CEO Lv Lei said the company will continue to support Ethereum Classic. This type of investment could help ETC attract more projects and expand its ecosystem. We have seen similar incubator funding on other blockchains designed to stimulate activity on the network.
Meaning for investors
Ethereum Classic certainly enjoys the moment in the sun, and its soaring prices reflect a new interest in the project. But the question for long-term investors is how sustainable this recent growth is. In the cryptocurrency market, speculative prices often rise and then fall again in the coming months. In this case, interest may diminish after the August merger of Ethereum.
One question to consider is whether Proof of Stake is better than Proof of Work. Both are proven consensus mechanisms, and each model has its pros and cons. However, given the large number of Proof of Work ciphers, this alone is not a good reason to buy ETC.
It’s worth seeing how Ethereum Classic emerges as a smart contract crypto. The difficulty here is that it has been around for longer than Ethereum alternatives such as Solana (SOL) and Avalanche, but cannot be fully compared in terms of locked totals (TVL) and projects on the system. is. TVL is the amount invested in projects in a particular ecosystem, with Ethereum Classic ranked 108th, according to DeFi Llama. TVL is almost $ 200,000 and my brother Ethereum is over $ 41 billion.
As with any crypto investment, it’s important to do your own research, not just buy assets just because prices have risen dramatically. See how it will work in the next 5, 10, or 20 years and how it will be compared to its competitors. Keep in mind that crypto is a risky asset and can be completely destroyed if you decide to invest.
Ethereum Classic has many benefits. However, it is difficult to understand how it can attract enough developers, projects and investors to close the gap with Ethereum and other top crypto ecosystems. Indeed, investing in that ecosystem can stimulate some growth. But the fact that it’s not in the top 100 TVLs after six years doesn’t stimulate self-confidence.
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