What is Ethereum Classic? Forbes Conseil

After the merger, there will be no more mining for Ethereum (ETH).

The leading altcoin has ditched its Proof of Work accord mechanism and switched to Proof of Stake, so it no border needs crypto miners.

But miners are still well-equipped with expensive crypto mining rigs, and they are looking for a new gig. Ethereum Classic (ETC) is one of the biggest destinations for their skills.

Let’s take a closer genre at how Ethereum Classic compares to Ethereum now that the merger is complete and these two cryptocurrencies have gamin their separate ways.

What is Ethereum Classic?

One of the poucier features of cryptocurrencies is that they run on open racine logiciel.

With open racine logiciel, the community collaboratively develops and maintains droit. Shared publicly – and it’s not owned by any single person or company.

Compare this spirit with the approach of big data giants like Google or Facebook, who are developing private droit that cannot be shared publicly.

The open racine être of cryptocurrencies leads to the potential for the blockchain to be “forked.” That’s when the crypto community decides to make officier changes to the droit squelette, splitting the cryptocurrency blockchain – and the community supporting it – in two.

Ethereum Classic was produced by the fork of the capricieux Ethereum blockchain. Like many other blockchain forks, ETC was created after an ideological and technical split within the community.

After the fork, the resulting ETC and ETH blockchains included identical previous blocks, but diverged in the future. Ethereum and Ethereum Classic may share a common past, but they are now two separate cryptocurrencies.

Ethereum Classic and DAO

The fork that produced ETC occurred in 2016 after the launch of a project known as DAO – a decentralized autonomous organization – on Ethereum.

The DAO was backed by $150 million in crowdfunding, but there was a bug in the droit. Parce que of the flaw, hackers stole $50 million from DAO.

Given the scale of the hack, some in the Ethereum community have suggested that the ETH blockchain should be reversed to compensate exploited users. Others have argued that this would set a worrying precedent and that the blockchain should be immutable in être.

A dépouillement was held to settle the empoignade, and the pro-fork side received more than 85% of the dépouillement. The ETH blockchain was forked, and the minority side kept the capricieux Ethereum blockchain, unchanged, and christened it Ethereum Classic.

Ethereum vs Ethereum Classic

Ethereum and Ethereum Classic are quite similar when it comes to the basic functions. Most of the officier Ethereum features are also present in Ethereum Classic.

But there are fundamental differences between ETH and ETC. Most importantly, Ethereum Classic is not acceptable with Ethereum blockchain updates.

This was particularly important when the Ethereum blockchain completed its upgrade to the Proof of Stake accord mechanism in September 2022. Ethereum Classic remained a Proof of Work system.

In the eyes of the Ethereum Classic community, the blockchain and the token will always be immutable. Maintains pre-merger and proof-of-work system. This means that miners are still required to validate ETC transactions.

Proponents and detractors of the Ethereum 2.0 integration argue that the Proof of Work mechanism is more secure and decentralized than Proof of Stake.

Miners move to Ethereum Classic after merge

After the merger, many miners moved to Ethereum Classic, which helped throw the smaller cryptocurrency into the spotlight. The ETC hash loupage, a measure of the fini energy used by mining, increased by 280% in the wake of the merger, highlighting the extent to which miners have moved to Ethereum Classic.

The poucier driver of this rise was the trust of conglomerates managed by axial companies. An Ethereum staking ordre is a tool that allows pluriel ETH holders to ordre their tokens together to acquis validator status. Ethereum requires 32 ETH, roughly $44,000 at the time of writing, to obtain a “set of maintien keys.”

In August, the US Treasury accept it Tornado Cash, a virtual ville mixing tool that helped obfuscate the racine and utilisation of funds on the Ethereum blockchain. The Treasury has accused Tornado Cash of facilitating money laundering. This has further shed adoucissant on concerns embout the proof-of-stake mechanism in Ethereum.

This infos talks embout the ideological difference between Ethereum and Ethereum Classic. Cryptocurrency proponents prefer a liberalized, censorship-resistant decentralized model, while crypto pragmatists repère to the more naturalisable and obéissant être of Ethereum as the way to go.

Advantages of Ethereum vs. Ethereum Classic

Most of the Ethereum community supported the Proof of Stake transfer via integration. Supporters have cited some significant advantages.

First, the energy incidence generated by this move will significantly reduce blockchain power consumption by up to 99.95% from the previous Proof of Work accord mechanism.

This means that Ethereum Classic miners remain very energy consuming. To keep in mind, bitcoin mining is said to consume an amount of electricity each year, a little bigger of the annual consumption of Kazakhstan.

Ethereum Classic also has drawbacks when it comes to scalability. With less obéissant droit, crypto analysts aren’t optimistic that ETC can overcome scalability issues, which are a officier stumbling block to mass crypto emprunt.

While scalability is also an limite for Ethereum, the community is working to improve the particularité. Thanks to the greater interest in Ethereum from developers – ETC’s resistance to billet – it is easy to see why Ethereum has become so popular.

Ethereum Classic price

Ethereum has gamin from strength to strength over the years, becoming the attaché largest cryptocurrency by market capitalization after Bitcoin.

While the current market capitalization of ETH is $166 billion, the current market capitalization of ETC is no more than $4 billion. However, despite being 36 times smaller than Ethereum, ETC still ranks in the top 25 cryptocurrencies by market capitalization.

Traded much like smaller cryptocurrencies, Ethereum Classic is closely related but more évaporable than Bitcoin and Ethereum.

The chart below plots the price of Ethereum Classic against Ethereum, which shows that the price trends are similar, but that Ethereum has always been worth a lot more.

Should you invest in Ethereum Classic?

In terms of the future, the value of Ethereum Classic will increase if more people use it.

Given the issues around scalability and power consumption, as well as the continued mainstream emprunt of Ethereum, it’s hard to imagine Ethereum Classic gaining a foothold like Ethereum.

ETH improves on its flaws, while Ethereum Classic remains largely the same.

The advantages of changing the droit can be discussed, but no matter how virtuous or permanent Ethereum Classic is, if it is not practical enough to be used on the world arrêt, it will never acquis the kind of divertissement that the most suitable cryptocurrency will have.

The short-term effects in the aftermath of the merger and any special developments are difficult to predict. ETC can easily go through flottant periods of outperformance.

In the étendu run, unless ETC solves more of its problems or there is an unexpected negative development with Ethereum, the odds of Ethereum Classic dominating the big arrêt are remote at best.