If you are learning about Ethereum Classic (ETC) for the first time, it may surprise you to discover that it is the original version of Ethereum. While few users or developers are on it today, Ethereum Classic, created by Vitalik Buterin, was the first smart-contract-compatible blockchain. The creation of Ethereum and abandonment of Ethereum Classic were conducted in a process known as a hard fork.
In 2016, the decentralized autonomous organization (DAO), a community of investors and developers that resided on Ethereum (now Ethereum Classic), was hacked. Millions of dollars worth of Ether were slowly drained from the DAO because of one small bug in the code. Buterin was faced with one of the hardest decisions he would have to deal with: fork Ethereum’s blockchain to reimburse stolen funds or adhere to the “code is law” ethos and maintain a hands-off approach.
This decision was difficult largely because of the ideals a blockchain holds. Many in crypto hold the idea that a blockchain such as Ethereum is supposed to be permanent, transparent and with no central authority. Potentially, forking Ethereum into two distinct blockchains could set a bad precedent for the future of Ethereum.
In the end, Buterin would decide on using his influence to hard fork the blockchain and replenish the stolen Ether. The original blockchain still lives on, known today as Ethereum Classic. As the majority of programmers and investors migrated to the new chain, some believe in the potential of Ethereum Classic –– these individuals tend to value the permanence and decentralization of a blockchain, even over the righting of unjust actions.
A key difference that Ethereum Classic holds from Ethereum is that it will remain a proof-of-work (PoW) network even as Ethereum migrates to a proof-of-stake (PoS) network. This factor could be the bull case for Ethereum Classic. While PoS is rumored to have a number of technical advantages over PoW, the actual implementation of PoS has yet to be proven viable, at least over a long-enough time horizon. Also, many do not believe that PoS is a decentralized-enough concept, and worry that users with the largest stake will ultimately control the network.
A failure of Ethereum does not mean success for Ethereum Classic; in fact, another hard fork could be likely. Regardless of your opinion on Ethereum Classic as an investment, the history behind the blockchain is interesting.
Why is Ethereum Classic Down?
The short answer to why Ethereum Classic is down is that the entirety of the crypto market is down. Bitcoin has dipped below $30,000, and altcoins follow the price movement of Bitcoin. Ethereum Classic is no different, as both Bitcoin and Ethereum Classic sank in early 2022.
Even in the wake of bull markets, Ethereum Classic has not seen much positive momentum, at least in comparison to most other cryptocurrencies. Developers have migrated with the hard fork to the modern Ethereum, and with little development on the blockchain, the ETC token price is likely to struggle.
Ethereum Classic Price Movements
The mass exodus from Ethereum Classic to the modern Ethereum blockchain was the original driver of a negative price movement, which occurred in 2016.
Following the exit, Ethereum Classic was relatively flat from 2018 up until 2020. However, the coin shot up in 2020, along with the rest of the crypto market.
Ethereum Classic’s run was short lived, and the price has begun to correct. Today it sits at roughly $20 per token.
Cryptocurrency Market Cycle
The crypto market is trending near bear market territory. With most coins well off all-time highs, the question everyone is wondering is if this sell-off can continue. Bitcoin and many altcoins peaked in 2021, but in light of the Fed starting a tightening cycle, crypto markets have followed the stock indices in a sell-off.
Whether the market will see a full blown crypto winter is yet to be discovered. If crypto does not find support soon, it could be months before a true bottom is reached.
Where To Buy Ethereum Classic
Ethereum Classic, despite serving little to no use, is still available for purchase on some big trading platforms. Both Coinbase Global Inc. (NASDAQ: COIN) and Robinhood offer the ETC token for trading. Another trading option for Ethereum Classic would be to use a decentralized exchange, often referred to as a DEX for short. Most notable of the many DEXs is Uniswap.
So, Is Ethereum Classic Dead?
Ethereum Classic will forever be a part of blockchain history. If nothing else, it offers sentimental value because it is Buterin’s original creation.
In terms of actual projects to emerge on Ethereum Classic, or any real world use cases, the coin is quite near death. Ethereum Classic will need to rely on sentiment and its tie to Ethereum to stay in the top 30 blockchains by market capitalization.
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