Cryptocurrencies are highly volatile assets, and therefore users should do thorough research before investing in any of them. The prices may change abruptly, and thus users should be aware of the risks and rewards of investing.
What is Ethereum Classic (ETC)?
Ethereum Classic (ETC)is an open-source and decentralized cryptocurrency platform created due to a hack in the original Ethereum blockchain network in 2016. Like the original Ethereum network, Ethereum Classic also uses Smart Contracts that are autonomous digital applications based on the “Code of Law.” However, Ethereum ETH is considered more legitimate than Ethereum Classic, ETC.
History of Ethereum Classic Price
Ethereum Classic can be considered as a blessing in disguise; this new decentralized platform was formed as a result of the hack of the original Ethereum blockchain network in June 2016 when funds worth $50 million were embezzled; On September 3, 2021, Ethereum Classic (ETC)mainnet split due to the exploitation of a bug by an unknown hacker in the older version of the Ethereum network “Go Ethereum” most commonly known as Geth which led to a massive breakdown in the network and 20% decrease in the hash rate.
Before the hack, the Ethereum Blockchain was a single network where transactions were facilitated using its native cryptocurrency, Ether or ETH. After the hack, the Ethereum blockchain was split into two- Ethereum Classic and Ethereum itself to secure the network. The hard fork or split resulted in the simultaneous existence of two versions of the original Ethereum blockchain network mirroring each other, and therefore, Ethereum Classic also has the potential to run Smart Contracts just as the original Ethereum blockchain network and thus provides an extra layer of security to the platform. However, Ethereum Classic uses ETC as its native cryptocurrency while the newer version of Ethereum continues to use ETH (Ether) as its native cryptocurrency. ETC price closed at $73.62 in September 2021 and reached its all-time high at $176.16 in May 2021.
How Does Ethereum Classic (ETC) Work?
Ethereum Classic uses Smart Contracts contained within a blockchain network, thus offering the benefits of decentralized governance. Smart contracts are enforced without the interference of any third party like a lawyer or any other legal intermediaries. If the actions within any contracts are fulfilled, then the contracts’ parameters would be legally enforced, making the contracts much more secure and transparent.
Things to Consider Before Investing in Ethereum Classic
Though Ethereum and Ethereum Classic have emerged from the same network, the new version (Ethereum) has gained more popularity than the older version (Ethereum Classic), which sometimes creates speculations as to the credibility and viability of Ethereum Classic. Users should consider the following factors before investing in Ethereum Classic, ETC:
Limitations to Scalability
Ethereum Classic can only handle 15 TPS (transactions per second) which is much less than most of the fiat payment getaways like VISA, which can deal with more than 1000 transactions per second. Therefore, as far as the scalability of the network is concerned, the Ethereum Classic network would require more software upgrades to sustain itself in the competitive crypto market.
Past incidents of hacks
Security has always been a serious issue to Smart Contracts, which is again spiked after the hacking incident of the Ethereum blockchain network that resulted in the creation of Ethereum Classic. These concerns of hacking and embezzlements prevent Ethereum Classic smart contracts from being used in many sectors like real estate and finance.
Non-Inclusion in the list of financial securities
Due to the uncertain nature of cryptocurrencies, they are not included in various financial products like stocks, securities, bonds, ETFs (exchange-traded funds), and mutual funds.
Future of Ethereum Classic Price
Compared to the new version Ethereum, the future of the older version Ethereum Classic looks less prominent, probably due to the security issues that Ethereum Classic has to deal with.
According to the forecast by leading analysts, the price of Ethereum Classic might reach $75 by 2022 and $100 by 2023. The price might spike to $162.39 by the end of 2025. Another group of analysts believes that the price of ETC will complete at $116 in one year and $291 in the consecutive five years. You can click here to check the in-depth analysis. If this trend continues, users can consider investing in Ethereum Classic as the price is low at present; the hard fork (Geth hack) might be the reason for the decline in the price of ETC.
Conclusion
Even though the crypto network has recovered well, and the ETC market capitalization stands strong at more than $7 billion and has a total circulation of more than 210 million, investors have lost faith in ETC due to the hack into its blockchain network. Therefore, to reinstate the lost confidence of users, ETC needs to redevelop its code and upgrade its software to prevent future hacks.
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