The cryptocurrency market is on the move. However, the crypto community is mainly eyeing the next Ethereum upgrade that will shift Ethereum from PoW to PoS. Of course, there are some people who resist this shift, prompting them to find other alternatives. Ethereum Classic was among the other alternatives that have gained more than 50% in price since the merger announcement. Why is Ethereum Classic up? Is it a good idea to buy ETC? Here’s everything you need to know.
What is Ethereum Classic (ETC)?
As the name suggests, Ethereum Classic came about as a result of some developers disagreeing about how the Ethereum blockchain of the time worked. These programmers used Ethereum to build a venture capital fund called The DAO (Decentralized Autonomous Organization). By allowing individuals to contribute ETH and guaranteeing them a profit share as ROI, this VC raised $100 million. Investors have the power to choose how to allocate assets in addition to returns. Unfortunately, the fund’s coding contained an error that allowed for a network breach. Millions of dollars were fraudulently withdrawn from the system in the form of ETH during the breach.
Before the hackers cashed out the stolen tokens, investors began to worry and offered engineers a month to come up with a solution. To undo the hack and return investors’ money, engineers had to construct a hard fork. Others rejected this option, but Vitalik Buterin and many other major network investors did. The fact that they believed it would be inappropriate to manipulate a blockchain’s ledger was one of the main reasons for the rejection. Because of this, they wanted the network to keep running despite the theft. However, they stayed and gave the network the new moniker Ethereum Classic. Most miners, developers and consumers switched to the fork network, including Vitalik Buterin. The bifurcated network is what we know today as Ethereum.
Why is Ethereum Classic UP?
Ethereum is about to have a major upgrade in its blockchain. It’s basically moving from PoW to PoS. This new consensus mechanism eliminates the need for miners. Because of this, most miners would look for other alternatives. Ethereum Classic is one of the blockchains that comes closest to Ethereum, so miners consider it their “safe haven.” They all plan to switch to Ethereum Classic as it will still work with a proof-of-work mechanism.
Furthermore, Vitalik Buterin mentioned Ethereum Classic at a recent conference. He said that Ethereum Classic is “a fine blockchain.” Individuals who still wish to use it can safely do so. In fact, now that mining volume would increase tremendously, it would make the Ethereum Classic blockchain much more secure.
So in summary: more miners flock to Ethereum Classic + Vitalik positive assurances = higher ETC prices.
ETC Price Prediction – Is Ethereum Classic a Good Buy?
If we look at the fundamentals, Ethereum Classic is definitely a good buy. The network is highly secured thanks to the bevy of new miners coming from Ethereum. Many crypto investment firms are also eyeing ETC as they see a bright potential future in this ecosystem.
However, if we zoom in and look at the technical side of things, we can see that Ethereum Classic’s price is due for a correction. After two prolonged price hikes, ETC could correct lower. Looking at Figure 2, we can estimate an ETC correction towards the $35 price level and then towards $30 if the adjustment becomes strong. After that, prices should aim to reach their all-time high so far this year at around $50.
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