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Ethereum Classic (ETC): history and perspectives

26/09/2017 00:00
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Ethereum Classic existence has been recently surrounded by lot of discussions at most theme forums and other similar media. That is why it will be logical to review everything in details so that each participant of cryptocurrency society could understand the entire essence of this asset and its difference from standard Ethereum and get an idea if Ethereum Classic is worth investing in it.

Ethereum Classic (ETC) history

The operation of Ethereum ecosystem is based on the basis of “smart contracts”. The latter present automated agreements, providing the observation of the range of conditions regulating transactions conducting. But let’s plunge into the history in order to understand the reason of Ethereum Classic (ETC) appearance.

The spring 2016 has been marked by the development of complex widespread “smart contract” titled as DAO, which should have been drastically changed Ethereum system. The project idea is rather complex. Generally it goes about venture capital decentralized capital designed for the financing of new distributed DAPPS applications. In order to get some influence over the development of Ethereum network new solutions it is necessary to invest some ethers into the system (ETH/USD) and get some specialized DAO tokens in return.

DAO potential imprecedence, its flexibility, control and complete transparency doesn’t arise any doubts. That is why thousands investors start active purchases of the shares in the system. This has results to the fact that DAO has attracted more than 150 billion USD in one month. This sum made 14% of all issued Ethereum tokens. Everything seemed very good by on June 17, 2016 some guys have found system “vulnerability” and created own affiliate system having transferred one third of DAO ethers to it ( it made around 50 million USD).

Of course such situation has caused panics at Ethereum society. Though Ethereum itself is in way related to DAO issues, as DAO is only one of “smart contracts” of Ethereum network, such situation has violated the trust of users to this cryptocurrency. The price of Ethereum has dropped nearly two times and industry experts forecasted this cryptocurrency fast ending.

Though hackers didn’t manage to use stolen money, as Ethereum smart contracts suppose that sent money can be used only after 28 days from the moment of transfer. That means that stolen 50 million USD became “frozen” for the stipulated period at the account of stipulated affiliate DAO.

Developers’ team and Ethereum society have decided to take measures and offered two options of further actions:

  1. Do nothing. Some society participants thought that some changes will violate the nature and philosophy of Ethereum. System register should remain unchanged as “code is the law”
  2. Soft fork. Such process reminds a lot usual update of the software with reverse compatibility. The essence lied at complete blocking of Ethers stolen by hackers and complete ignorance of blockains containing stolen cryptocoins. 

Having assessed all the options and advantages of second option the Ethereum society participants decided to bring in to life. But during the course of soft fork operation developers have revealed vulnerability, which if known to hackers will make miners to conduct constant complex calculations without getting expected reward. This fact made the usage of soft fork impossible, that is why the only available way for Ethereum society has been only hard fork (update with the absence of reversed compatibility). In this case the essence of the process lies at system reversed action to specific point (before DAO hacking) with further launching of blockchain registration from zero. Recently all transactions have been similar, but the appearance of hard fork has divided network in two separate blockchains.

New blockchain has gained old title Ethereum (ETH). Money from DAO should have been returned to their owners with the help of specialized software with only function of money withdrawal in the following way: users got 1ETH for each 100 DAO tokens. Such offer became so disputable that made this cryptocurrency society to break. The hard fork opponents decided not to shift to new blockchain and remained in old system having called it Ethereum Classic (ETC). This moment became the start of battle between ETC and ETH in Ethereum society.

Ethereum Classic (ETC) mining

Ethereum Classic gets honorable 5th place at most of thematic ratings. Its capitalization exceeds the level of 1,5 billion USD, while its market value makes 16,56 USD.

ETC mining at post soviet space has only one difficulty. It is hard to purchase the equipment for mining as most offers come from mediators increasing the price almost in two times. Though this issue can be decided, too. It is always possible to make Ethereum Classic profitable having used our mining calculator.

Now Ethereum Classic system provides the support for miners the cost of equipment of whom exceeds the amount of 40 million USD. This makes hacker temptation to hack this network higher. But despite this fact Ethereum Classic system gas good perspectives for future as cryptocurrency society participants see the efficiency of approach demonstrated by Classical Ethereum developers- not to correct source code. 

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