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Ethereum Classic (ETC) Has Soared Around 78% Recently, But its Past Vulnerabilities Remain

by admin

March 29, 2022

in Cryptocurrency

Ethereum Classic ETC March 2022 Spotlight Growth

As Bitcoin once again shows signs of life, alternative cryptocurrencies are beginning to move. Perhaps the most confusing of the lot is Ethereum Classic, the well-known hard-fork of Ethereum’s core blockchain. Ethereum Classic has seen its coin price soar from around $28 to over $50, or around 78.5%, in just 11 days between March 18^th and March 29^th. ETC spiking is nothing new – the lower volume and liquidity make the off-shoot more prone to volatility – but it does show a long-term memory problem within the industry. Ostensibly, Ethereum Classic exists to honor the “decentralized” idea of code-as-law.

A closer look shows that ETC’s creation came from a misguided attempt to hold the blockchain responsible for a major hack. Beyond this, Ethereum Classic proved itself more prone to hacking than the core chain, serving as one of the few high-profile examples of a successful 51% attack. Investors that continue to insist on sinking money into ETC either lack any knowledge of these events or lack any degree of self-preservation.

The History of Ethereum Classic

Ethereum Classic came about because of the failure of the first DAO. The original Decentralized Autonomous Organization served as a decentralized venture-capital firm and ultimately suffered from a multi-million dollar hack. In the aftermath, the Ethereum community – supported by major players like Vitalik Buterin – chose to roll back the chain and undo the hack.

*Ethereum Classic; Source: CoinMarketCap*

This did not sit well with a small subset of the community, who hard forked the blockchain and created Ethereum Classic. At the time, the cryptocurrency industry featured dozens of “Bitcoin” derivative projects, so this did not appear strange. Yet, Ethereum Classic soon ran into problems of its own. Ironically, the 51% attacks that plague the ETC blockchain alter transaction data – precisely the reason they forked from Ethereum in the first place.

Driving the Argument for Investor Protections

The cryptocurrency market exemplifies a financial libertarian mindset of complete investing freedom. Unfortunately for proponents of this type of market, investors often prove incapable of doing the bare minimum to protect themselves. Investing in Ethereum Classic after repeated 51% attacks and a history of underperforming shows that some form of regulation may be needed – if only to enforce a knowledge of the industry’s history.

As is, there is nothing to stop investors from buying Ethereum Classic – nor is there anything to suggest that the blockchain suffers from persistent issues. ETC’s frequent spikes in value simply prove that most investors are unwilling to perform even the most cursory of research, something that does not bode well for the market moving forward.