Ethereum Classic Shakes Up Cryptocurrency Rankings
Ethereum has been going through a tough time in the past few months. The biggest news that happened is that the DAO was attacked.
Like all blockchain-based cryptocurrencies, Ethereum uses a network of computers to verify its operations. The difference is that it has a Decentralized Autonomous Organization (DAO) which helps codify the rules of the network, cutting away the need for documents and people in governing.
It worked by automating the process via smart contracts. People could buy tokens to be part of the committee that set up these contracts, and this was what fueled Ethereum’s initial growth, with Ether being assigned to the DAO.
The problem was that there are inherent vulnerabilities in the system that allowed for a hacker to start draining DAO’s funds. The attack started near the start of June and by June 18, over 3.6 million ETH were siphoned into another account. This caused Ether’s rising price to drop from over $20 to under $13. Ether is still there and the account is being monitored so that the stolen funds will not be moved out. This, however, significantly affected the Ethereum economy.
This is what led to the recent hard fork, a change in the Ethereum protocol initiated by the people behind Ethereum. Investors that lost money in the hack needed to be compensated and the fork allowed this to happen. Considering that around $150 million was compromised, this was greeted with relief. However, some Ethereum users disagreed and decided to maintain the original Ethereum protocol. This has resulted in the introduction of Ethereum Classic.
The main difference between Ethereum Classic and the current Ethereum implementation is that the classic blockchain did not return any of the funds that have been siphoned off from the DAO. Essentially, this is a protest against what people see as meddling in the blockchain process. Blockchain transactions were designed to be irreversible and implementing a rollback like the hard fork did not sit well with a few users. They decided to stay on the old Ethereum network.
This controversy would have been over if Ethereum Classic had not gained traction. In a surprising turn of events, Ethereum Classic has quickly rocketed up in the rankings. Right now, it is the third highest ranked cryptocurrency behind Bitcoin and Ethereum. As for assets, it currently has $76 million invested into it. This makes it sixth in terms of capital among other cryptocurrencies, but it is quickly building up its reserves.
The key behind this rise is the incredible support that Ethereum Classic has gotten. For one, several of the world’s prominent exchanges like Poloniex have opened their doors to the Classic implementation. Miners have also apparently seen potential in the cryptocurrency as the network has lowered its mining difficulty. Even low-power miners can now mine over 20,000 Ether Classic in just two days.
From grim beginnings, Ethereum Classic has managed to show its potential. It will be interesting to see how it will develop in the future.