The price of Ethereum Classic (ETC) reached its highest point in four months today, with the Ethereum blockchain merge anticipated for next month.
According to CoinMarketCap, the coin is currently trading at $43.33, up 15% in the last 24 hours.
What is Ethereum Classic?
The Ethereum blockchain had a hard fork that was co-founded by Vitalik Buterin and Gavin Wood, giving rise to Ethereum Classic. A hard fork is a significant protocol upgrade that modifies the chain in a non-backwards compatible way. After its DAO was compromised for $50 million, the Ethereum blockchain, which had been created in 2015, was scrapped and restarted in 2016. This choice at the moment split the Ethereum community in two.
In fact, some choose to keep using the outdated blockchain instead of supporting the update. Then, it was given the new name Ethereum Classic. Both projects have a substantial portion of the original code, so there are many similarities between the two channels. First and foremost, the same goal: to enable users to carry out smart contracts without the interference of third parties or fraud. The rewards given to miners, the size of the blocks, and the average time it takes for a block to be created are all the same.
However, there are some noticeable variations between the two programs. The $210 million to $230 million issuance cap for Ethereum Classic (ETC) tokens. Ethereum (ETH), in contrast, does not have a set issuance cap. Based on market capitalization, there is one more distinction. The equivalent sum in the case of Ethereum Classic (ETC) is $5,771,664,856. Ethereum (ETH), on the other hand, has a market cap of almost $230 billion. By market capitalization, ETC is now the nineteenth-largest cryptocurrency.
The integration of Ethereum to Proof-of-Stake will bring a new size difference, which may explain the curiosity sparked by ETC. Ethereum Classic is currently built on a Proof-of-Work type protocol, exactly as Ethereum.
How do you describe the ETC pump?
Despite no longer being a part of the Ethereum network, ETC is seeing a rise in activity as a result of more people being interested in the switch from Proof-of-Work to Proof-of-Stake, which Ethereum had planned to implement by the end of September.
Ethereum, on the other hand, recently surpassed $1,900. The favorable market conditions for the bulk of cryptocurrencies are exploited by ETH. But there’s no doubt that the closely guarded Merge method plan is the key driver of this investor fervor. Some commentators think that the renewed attention in Ethereum is helping Ethereum Classic. Even though the two projects have separated, some occasionally view it as a less expensive alternative to Ethereum.
As we saw above, the merging of the two chains would result in a size disparity between them: Ethereum goes into Proof-of-Stake while Ethereum Classic stays in Proof-of-Work. This indicates that mining on this blockchain will end. It is sufficient to say that minors will be significantly impacted by this catastrophe. As this merger draws near, some Ethereum community members are once more arguing whether to do another hard fork of the Ethereum blockchain in order to maintain the Proof-of-Work methodology.
Finally, it appears that many miners wish to switch to Ethereum Classic to continue their work. The most obvious choice for miners who have so far mined Ethereum is due to its big capitalization (it is the second largest PoW type blockchain after Bitcoin) and age.
Therefore, it is still important to monitor ETC’s development up until the merger and the effect that will have on the price of the cryptocurrency.
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