Ethereum Classic overall health has climbed 6-points over the last 2 weeks, driven by an increase in User Activity. Price is up more than 25% since mid-December.
What is ETC?
Ethereum Classic was created as a result of a hard fork of the Ethereum blockchain following the DAO hack in 2016. The DAO, which stands for Decentralized Autonomous Organization, was a virtual venture capital fund whose members could vote and fund projects with a 20% quorum.
On June 17, 2016, an attacker used a recursive call exploit to steal $50M in ETH or ~5% of all Ether issued to that date. Following the attack, members of the community decided to initiate a hard fork to recover the funds thereby creating the existing Ethereum chain while those members who opposed the hard fork retained the old chain and called their token Ethereum Classic.
Scammers, Hard Forks, & 51% Attacks
On January 12, Ethereum Classic completed its latest hard fork called Agharta, which added Ethereum Constantinople opcodes to the mainnet. This hard-fork is actually a series of updates including Atlantis in mid-September 2019 and Aztlán to follow – all aimed at ensuring compatibility with the Ethereum chain and it’s recent upgrades. ETC has seen an uptick in their FCAS rating in the lead-up to the hard fork, primarily led by User Activity metrics.
Not long after the hard fork, scammers turned up offering people the ability to claim Agharta Coins which of course don’t exist as the fork was non-contentious. The ETC Cooperative was quick to sniff out the scam and warn users. The scam occurred almost exactly a year after the community suffered a 51% attack in January 2019, which resulted in double spends for 219,000 ETC or ~$1.1M.
🌶️ Hot Take
The Agharta hard fork is a logical move for ETC community members who want to remain compatible with their more popular sister chain. As well, speculators and miners on Ethereum might find refuge on Classic as a contingent of them oppose Ethereum’s move to a new consensus mechanism, ProgPoW and then Proof-of-Stake.
This respite, however, may be short lived if Ethereum Classic fails to differentiate itself from Ethereum in the long run. Looking ahead, it will be vital that ETC refines and presents a unique value prop to the market.