The upcoming Ethereum merge causes an uptick in activities on Ethereum classic as developers, miners, and investors flock to it.
The parent chain of the Ethereum Network, Ethereum Classic, has enjoyed something of a renaissance over the last month. On-chain data suggests that the network’s Hashrate surged by over 21% to 26.77Th/s from the start of the month. Meanwhile, on average, it recorded about 97,400 transactions per day in July, a 62.60% increase, while the largest number of active addresses for the year, at 66,200 recorded.
Consequently, the increased interest and activity also saw the ETC token surge over 150% to become one of the top performing cryptocurrencies in July. The digital asset started the month with a price of $14.5 and continued to trade in a tight range until the middle of the month when it began to rise quickly.
1- month price chart for ETC. Source: Tradingview
As seen in the chart above, ETC’s price rallied by almost 100% between the 16th and the 23rd of July. Eventually, it peaked at $43.92 before losing steam and closing the month at $39.31. So far in August, the price slump has continued, with the token falling 14% to trade at $33.81 at press time.
The Ethereum Classic blockchain came into existence after a hard fork of the Ethereum network following a DAO hack in 2016. It is an open-source, decentralized, distributed cryptocurrency platform that uses blockchain technology and supports smart contracts.
Increased Interest Due To Upcoming Ethereum Merge
Speculation abounds that the increase in interest in Ethereum classic may be linked closely with the upcoming merge on the Ethereum network. It was revealed by Beacon Chain community manager superphiz.eth that the merge will take place on September 19. The development will see the leading smart chain platform move from the proof-of-work(PoW) consensus mechanism to the more energy-efficient proof-of-stake(PoS).
Consequently, validators who wish to secure the network must stake a minimum number of coins to confirm transactions in exchange for rewards. This means Ethereum miners currently securing the network through solving computational problems would need a new home.
According to industry experts, these miners will find a new home on the Ethereum Classic network, which is supposedly compatible with their mining gear. Messari’s Sami Kassab, in a report, highlighted that the ETC is the only coin that can be mined using the ETH ASCI. This is due to the compatibility of its hashing algorithm and that of Ethereum. He said,
“Ethereum’s mining network is made up of two types of hardware: ASICs and GPUs. The problem with ASICs is that they can’t be repurposed for different applications besides mining ETH. Ethereum Classic is the only other PoW coin that can be mined with an ETH ASIC since its hashing algorithm is compatible with ETH’s algorithm.”
Furthermore, AntPool, the Bitman-affiliated mining pool, recently invested $10 million in the Ethereum Classic network. The investment is billed to be used to create and test applications for the network’s mainnet.
Meanwhile, there has been further speculation over the possibilities of another fork to the Ethereum network. About 33% of respondents to a Twitter survey by Galois Capital indicated that the merge would create two parallel networks in ETH1 (PoW) and ETH2 (POS). Meanwhile, Chandler Guo, a well-known Chinese miner, has continued to champion a fork.
Finally, while ETC witnessed a rally in price, Ethereum also saw a rally in its price following confirmation of the merge. The smart contract platform, which saw transaction fees fall to multi-year lows recently, rebounded 40% against Bitcoin. However, experts believe that its price will consolidate with excitement over the merge wearing off.
Do you think Ethereum classic will be the biggest beneficiary of the Ethereum merge? Or do you think another hard fork in order? Let us know your thoughts in the comments below.
Chris is a crypto enthusiast and a firm believer in the blockchain’s ability to create a new financial paradigm. Through writing, Chris hopes to expose the intricacies of this disruptive technology and how it is beneficial to Africans and developing countries. He aims to give readers a rational and unbiased outlook of the industry by equipping them with the necessary information to make enlightened investment decisions.
