There is a key difference in the coin prices of ETH and ETC. This article explains why Ethereum Classic is so cheap compared to Ethereum (ETH).
If, like me, you’ve been into crypto for a few years, then you must also know about Ethereum Classic. Furthermore, not many crypto investors know that this is the original Ethereum chain on which all initial code developments started.
In other words, Ethereum Classic (ETC) is very similar to Ethereum (ETH) and after the famous hard fork (DAO attack) in 2016, both chains decided to split up. Since 2016, Ethereum (ETH) has grown to be the second largest cryptocurrency in the world and is valued at $1715 per token in 2022.
On the other hand, there is Ethereum Classic (ETC), which has remained in the shadow of big brother ETH. Additionally, at the time of writing, this crypto token is valued at around $36 per token. Although ETC is valued 50 times less compared to ETH, this cryptocurrency is not going away anytime soon.
Crypto enthusiasts and investors seem to like the original blockchain network as ETC has a total market cap of around $5 billion. In addition, ETC has a trading volume of around USD 1 trillion (!) in just 24 hours.
So, when you combine all the facts and figures, we have to come to the conclusion that Ethereum Classic is a cryptocurrency that needs to be taken very seriously. But why is Ethereum Classic so cheap compared to ETH?
In this article, I give 4 reasons why ETC is the cheaper token. Also, I think ETC remains an interesting buying opportunity for 2022 and beyond (No investment advice 😉).
Why Ethereum Classic?
So, Ethereum Classic is valued about 50 times less than Ethereum (ETH). What is the main reason for this immense growth of Ethereum vs. Ethereum Classic? Why is Ethereum Classic still hot in 2022?
One of the main reasons Ethereum Classic is still alive as of 2016 is the fact that this coin is minable and has a limited supply.
Ethereum Classic (ETC) in particular has a limited supply of 210,700,000 ETC that will ever emerge. A newly created ETC is created every 15 seconds hardware miner.
Mining ETC with GPU miners can be profitable because the hash rate for the ETC network is quite low: 8.18 TH/s.
When it comes to hardware, the best GPUs are the high-end graphics cards that offer decent processing power for mining. Nvidia’s RTX 3090, GeForce GTX 1080 and GTX 1080 Ti are the first choice. More about Ethereum Classic mining in 2022 here.
GPU crypto miner Bitmain
Reasons why Ethereum Classic is so cheap
Both Ethereum (ETH) and Ethereum Classic (ETC) provide a blockchain network on which developers can build their own applications (more commonly known as decentralized applications or dapps).
Most of the code and functionality remains the same for both chains, however, Ethereum’s popularity has been increasing since 2016. Here 4 reasons why Ethereum Classic is so cheap compared to ETH.
1. Ethereum Classic is the “old” version of Ethereum
Ethereum Classic is the original Ethereum blockchain and is supported by people who want code immutability. Once a blockchain network is created, the code should not be changed or as they say “code is law”. Even after the start of the DAO project, where someone exploited DAO vulnerabilities, the need for a hard fork was denied.
Since the separation of the two networks, Ethereum and Ethereum Classic have gone their own way. In addition, Ethereum developers have decided to abandon the principle of the limited number of coins. Instead, the coins that are created will grow each year and are unlimited.
On the other hand, there is the Ethereum Classic, which keeps the hard-capped policy of 210 million ETC forever. Also, the block reward for ETC will be reduced by 20% at block number 5,000,000 and by another 20% every 5,000,000 blocks thereafter. This is something similar to the bitcoin halving event that occurs every 4 years.
2. The DAO hacker’s coins
Another potential problem or imbalance in ETC’s network is the 2016 DAO hacker’s stolen coins. To solve this hack, the Ethereum community decided to split the network and continue on the other chain, leaving the hacked coins worthless.
However, on the Ethereum Classic chain, these coins remain worthwhile and can be used for daily transactions. In addition, this DAO hacker has about 1/3 ETC of the total coin supply. This means that this “evil entity” has a lot of power to manipulate the prices on the different crypto exchanges.
The legacy of the DAO hack is something for the Ethereum Classic community to grapple with and is a potential red flag for new cryptocurrency investors.
3. Popularity of the “new” Ethereum blockchain
Vitalik Buterin is one of the main founders of Ethereum and is considered the leader of this chain. Although Ethereum Classic runs on the original code created by Vitalik and co., the leader decided to switch to the other chain.
Since 2016 there have been many developments on Ethereum initiated by him and his followers. Furthermore, this Ethereum community has grown to hundreds of thousands of followers, developers and investors.
The Ethereum (Twitter) account has 2.7 million followers
On the other hand, there is the Ethereum Classic network, which has no real leader like Vitalik Buterin with Ethereum. Buterin is very active on social media (Twitter) and also has a large following. This will surely help increase the popularity of Ethereum even more.
As a result, Ethereum is the second most popular community in the world and is by far much larger than the Ethereum Classic community. Finally, one of the main reasons why Ethereum Classic is so cheap compared to ETH.
4. The security of the network
At the time of writing, both Ethereum and Ethereum Classic run the same mining algorithm (Proof of Work) to secure the network. This will change for Ethereum later this year when it merges into Ethereum 2.0. The long-awaited Proof-Of-Stake mechanism.
The big advantage for Ethereum will be that it can scale the blockchain network from the equivalent of 30 transactions per second to 100,000 ts/sec. This is a significant increase of 3300%.
Ethereum Classic has no plans to change the proof-of-work mechanism (hardware miners). Also, this network continues to handle this slow transaction throughput of around 30 ts/s.
Is that also a reason why Ethereum Classic is so cheap compared to ETH? It could be.
Of course, there are pros and cons to this Ethereum to Proof-of-Stake merger and the main criticisms are security and its diminishing value. Obviously, Ethereum and its community have decided that they think scaling the network is more of a priority.
On the other hand, there will be the unmodified Ethereum Classic network, which will continue to run proof-of-work as a consensus mechanism. Also due to the shift from Ethereum to PoS, many Ethereum hardware miners will switch to Ethereum Classic. As a result, an increasing demand for hardware ETC miners and an increasing price of ETC (see charts below).
Ethereum Classic vs. Ethereum: The charts
Aside from Ethereum Classic being much cheaper to mine compared to Ethereum (ETH), there are also price developments in 2022 that are very interesting. In addition, Ethereum Classic has increased in the last 3 months 44% while ETH remains in the red: -33%.
Ethereum Classic vs Ethereum Charts in the last 3 months
So what’s going on with ETC here? As explained above, the Ethereum network will transition to proof-of-stake later this year. This led to an outflow of ETH miners and a sharp increase in demand for ETC miners. Also, despite the current bearish market conditions, the price of the ETC has gone through the roof.
Finally, will ETC be a good buying opportunity for 2022 and beyond? As mentioned, the Ethereum Classic network is not going anywhere and will continue to grow over time. Also, it will play its unique role in the cryptocurrency market of 2022 and beyond.
However, there are still some risks that you need to consider for ETC such as DAO hacker coin count. All in all, it’s important to do your own research when considering ETC and the community behind it.
Ethereum Classic (ETC) is an established crypto and can be bought on any cryptocurrency exchange. A good option is Binance, where you can Sign up for free. Stay safe and enjoy investing!
frequently asked Questions
Is Ethereum Classic better than Ethereum?
As mentioned in this article, Ethereum Classic is the original chain that the Ethereum community started working with. A chain split occurred after the DAO hack in 2016, leaving Ethereum Classic unchanged.
Comparing Ethereum Classic with the newer Ethereum is difficult and can only be based on the combined market value of both projects. Furthermore, the Ethereum(ETH) project is valued almost 50 times higher than the original Ethereum(ETC). Based on these metrics, it can be said that Ethereum is better valued than Ethereum Classic.
Is it worth investing in Ethereum Classic?
Both projects Ethereum(ETH) and Ethereum Classic(ETC) are established projects in the young cryptocurrency markets. Crypto, in general, offers many opportunities for risk-taking investors. Ethereum Classic is not going anywhere and can still be beneficial in the long run.
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