Partnered With:

What is the history of ETC, which has led the market higher after BitcoinSV?

Read this article in 14 Minutes

Know your history and invest carefully

On January 17, according to the BitUniverse market, ETC briefly pulled up more than 10 dollars, a recent six-month high. Following the last surge of the half-currency Bitcoin SV, ETC's 10-day doubling performance has attracted a lot of interest.

Perhaps ETH occupies too much light, we do not know much about ETC. And the new leek might be confused, what's the difference between ethereum classics and ethereum? Is their relationship the same as bitcoin cash?

In fact, Ethernet classics (ETC) did not originate in The bifurcation wave of 2017's crazy bull market, but in 2016's hack of The DAO.

On June 17, 2016, The DAO, The largest crowdfunding project in The world, was transferred 3.5 million ethereum, worth $50 million, due to contract loopholes, causing an uproar. That would have been a lot of money in the money world, given that ethereum was only worth about $1 billion at the time, and the stolen ethereum is now worth about $600 million. If nothing is done, the hackers will be able to withdraw the funds in 27 days.

So, The ethereum official team proposed a soft fork through an emergency meeting. Instead of canceling any transactions or blocks, The deal related to The DAO was invalidated, and The hard fork was later used to retrieve The ethereum.

Does this violate the principle of decentralization? Should The DAO investors bear their own losses? Will The DAO survive? These problems aroused wide discussion in the currency circle at that time. In an interview with Ryan Zurrer on BlockBeats, Zurrer said that if The DAO survived, it would likely become The world's largest venture capital pool, worth billions of dollars of distributed VC. This also shows The influence of The DAO hacking incident on The whole industry.

In the end, a vote was held within the ethereum community on whether to roll back, and the results showed that about 90 percent of the people, including the god V, decided to transfer the hackers' stolen funds to a specific contract address, while a small number remained with the original transaction history.

Since then, the Ethereum community has been divided into two groups, one of which advocates forking out the tokens stolen by hackers. One group argued that the blockchain should not be tampered with. To prevent confusion, it was renamed Ethereum Classic (ETC).

In the blockchain world, hard bifurcation comes with risks and costs. The split between miners and communities means a split between power, consensus and development. For example, ETC currently has a total net power of about 10TH/s, less than one-tenth of ETH, while ETC and ETH share mining algorithms, making it easier to hire power to launch 51 attacks on ETC.

In January this year, ETC was indeed attacked by 51 attackers, which caused public panic about PoW, which further highlighted ETC's vulnerability. According to block beat BlockBeats, ETC has been double flowered for a total of about $1 million. Although the hackers subsequently directed all the funds to the exchange, this did not allay concerns about small PoW COINS.

In any case, the hard bifurcation eventually occurred. On July 20, 2016, the first block that was independently affiliated to the etheric classics was excavated by miners at a height of 1,920,000, marking the complete "separation" of ETH and ETC on the chain. At that time, the ETC community used to call itself the "real ethereum".

decaying

However, to the surprise of many ETC supporters, in 2017, when the ERC20 token was the order of the day, the ETH was seen as a pretty penny, while ETC was not much of a star, with the exchange rate against ETH falling by as much as 90 per cent.

To support a market value of more than $1 billion, ETC cannot rely on pure blood alone. ETH's powerful ecology and network effects are the real moat.

Below is the chart of major news and price trends of ETC since 2016, from which BlockBeats will reproduce 5 representative events.

(data source: Coinmarketcap, ETC prices use a logarithmic coordinate system for ease of reading)

The first is that in March 2017, ETC identified a total of 210 million pieces of constant deflation model, which is very different from the economic design of ETH's continuous issuance, while Grayscale set up the ETC trust fund, marking the beginning of institutional investors. After The DAO haze, ETC development efforts on The right track.

The second was the first ETC global summit held in Hong Kong in November 2017, which strengthened the consensus of ETC in China and even the world. At that time, it was the last stage of the bull market, and altcoins was on the move. The ETC conference further boosted FOMO. "Others greed, fear", unknowingly ETC prices are heading for the record high.

The third thing is that in March 2018, the classic "mirror" Callisto (CLO) of etheric was born, and ETC holders will receive CLO candies 1:1. Initiated by a former ETC developer, the CLO hopes to improve ETC's design problems with smart contracts and use a PoS mechanism called Cold Staking. The CLO incident also caused a small split in the ETC community.

The fourth was in December 2018, when the ETCDEV development team for ether classics announced that it was shutting down due to financial problems. Misfortunes never come singly. A month later, ETC was attacked by double flowers. At the time, the worst of the bear market, many of ETC's diehard supporters began to waver. Give out all good, a number of large Chinese investors began to suck up, ETC volume magnification, people abandon me to take, the price gradually bottom.

The fifth thing is that, more recently, ETC is preparing an Atlantis hard fork upgrade. ETC China community said the upgrade will optimize the mining difficulty algorithm, simplify the difficulty of DApp development, performance will be comparable to ETH. ETC calculations and prices have also skyrocketed, driven by capital and news.

After a brief reworking of these five events, BlockBeats found that after ETH and ETC diverged, it was not only the miners and the community that diverged, but also the project route. In addition, ETC did not develop smoothly after the bifurcation, the core reason is that ETC has not found its core position.

Speaking of ETH, we all know that it is the first intelligent contract platform, DeFi clearing layer, chain benchmark... But when it comes to ETC, apart from bifurcation, 51 attacks and hot money speculation, what do we still remember?

Calculate power revival

The recent surge in the power of the ether classics by more than 40 per cent, and the accompanying price boost, seems to have finally given ETC believers a glimmer of hope. According to the data, ETC mining difficulty has reached the highest level of the year, returning to the same level in 2018.

"Ethereum in phase 2.0 will gradually move from PoW to PoS, and many people will start digging again." In an interview with miner Alex, BlockBeats said, "COINS without consensus basis are not good, and plates are too small to like to play, so ETC still has an advantage in competing for computing power after the ebb tide of ETH from PoW."

In this way, the causes and consequences of inflationary calculations are clear. After ETH is converted into PoS, idle computing power cannot be abandoned, while ETC, which shares mining algorithm and part of the community, takes the lead in the battle for computing power. As the only future ethereum PoW chain, proactive miners began to plan ahead for ETC.

On the other hand, ETC's big clients reported to BlockBeats that, "the ETH contract can be transferred to ETC smoothly. So, if the eco-developers want to return to the PoW chain in the process of ETH transferring PoS, ETC can be seamless."

But will the ETH ecology really migrate to ETC? Not necessarily. First of all, whether the public chain will be mainly PoW or PoS in the future has not been set. The logic of ethereum's backup PoW chain may be falsified. Secondly, the construction of public chain ecology is not a cold day, and the network effect of ETH top project (MakerDAO) also makes the transfer more difficult.

Finally, ETC changed from the "real ethereum" to the "biggest spare PoW chain of ethereum". We couldn't help but sigh: the story is changing, but the story itself is not changing.

Future is uncertain

Although the reality and data on the chain show that ETC's fundamentals are still positive and new breakthroughs have emerged in its development path, BlockBeats is still full of worries about ETC's future.

Go back to the basics, whether it's mainstream currency, copycat currency, model currency, PoW, PoS, ETC or ETH, if there is no change in the underlying technology of block chain, no killerapps, and no profitability of the platform, the community consensus will only slowly fade away until no one is interested.

Li fuzhen, a senior investor in the currency circle after two rounds of bull and bear, told BlockBeats of his own speculation, "this time ETC activity in China is very frequent. The price rise is like a" conspiracy ", and it may be that the whale is collecting chips in the secondary market, so as to boost the shipping with the slogan of ethereum PoW chain."

BlockBeats had no knowledge of this and found no evidence of it. But if that's really the intention behind ETC, turning ETC from Ethereum Classic to Ethereum China, we have to wonder if ETC will become a backstop for hype.

As for those attractive stories, can only exist in the good fairy tale, disappeared in the sickle of capital.