Ethereum Classic is the original blockchain. It’s the 2017 hard fork Ethereum that is the pretender. So ETC fans like to point out at every available opportunity.
That Vitalik Buterin’s Ethereum is the de facto second-largest cryptocurrency by market cap must really stick in their throats.
But Ethereum Classic is showing a remarkable price rebound lately, ticking up a staggering 35% as of Sunday 7 April. Weekend trading is normally slow, so it was especially unusual to see such large volumes pushed through.
By Monday morning ETC was trading at a two-dollar fall from its $10 high.
Even the evangelists in Reddit’s r/EthereumClassic subreddit suggested a pump and dump might be at play.
ETC prices shot up from $6.66 at 4:00am GMT on San Fransisco-based Coinbase to a maximum of $10.01 at 5:30am.
That’s a big 2019 high.
There has been no obvious fundamental news to underpin such a sharp continued rise in ETC.
Analysts suspect there is simple FOMO going on here, backed by the high correlation between market dominator Bitcoin and the rest of the altcoins.
Clem Chambers, CEO of ADVFN and Online Blockchain plc was stark in his appraisal:
“The crypto-winter is over,” he said.
“In a bull market the rising tide raises all ships. The smaller coins are high beta and are therefore prone to bigger moves as the market rises and falls. Ethereum Classic is prone to this volatility as are DOGE and Ravencoin. “
But Jehan Chu, Managing Partner at Kenetic hinted there may be more to this story yet.
“The recent price surge across a range of left-behind tokens such as Ethereum Classic demonstrates that the smaller crypto markets are still emotionally driven.
“The fervor and froth whipped up in these communities quickly become significant price waves. On the other hand, when these waves crash, they’ll inevitably leave some bodies on the rocks.”
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Volume in particular saw a huge upswing, hitting $800 million across all exchanges tracked by CoinMarketCap. That’s more than double ETC’s early volume of $350 million.
There has been a staggered fall since. As of Monday at 4:00am GMT, Ethereum Classic is back around the $7.80 mark.
When the bull market suddenly and mysteriously returned on 2 April after months of flat volume and low volatility, it caught most of us by surprise.
A 20,000 BTC buy order spread across Kraken, Coinbase and Bitstamp exchanges likely sparked algorithmic trade wars, as BCB Group Oliver von Landsberg-Sadie told Reuters.
Chu, also co-founder of nonprofit grantmaker the Social Alpha Foundation, added: “It’s no secret that ETC technical development lags behind many other protocols, but perhaps the price move may re-ignite interest beyond token speculation into real long-term project growth.”
ETC lags behind in technical terms, according to the experts. But change is on the horizon. FLICKR: ETC, CREATIVE COMMONS ZERO
Some news that might be behind a steep upwards tick is that the network upgrade Atlantis is coming.
But that’s not until around mid-September 2019 at current projections.
The hard fork proper will hit the Ethereum Classic mainnet at block 8,750,000.
That’s after it breaks on the Kotti (block 1,039,000) and Morden (block 4,723,000) testnets in early August 2019.
Atlantis will bring forward a few improvements, including
- Making ETC easier to run. Adding various precompiled contracts and opcodes should improve the interoperability of ETC with ETH and the testnets for greater adoption.
- Better for dApps. Changing the receipt status should make it simpler for dApp devs to access whether a contract has succeeded or failed.
- Changing the difficulty formula. The algorithm will now target constant average block times to make issuing ETC a lot more predictable and much harder to manipulate.
Sometimes it does feel like a PhD in Maths would be handy when trying to decipher what blockchain upgrades will actually do.
A good, if highly technical, outline is on Medium here, while the full Github repo is here if you want more specifics on the Atlantis hard fork.
Ethereum Classic 51% attack
The rapid price movements of the past few days have left analysts scratching their heads.
As a staunch top-20 coin, ETC had been seen as relatively stable.
But in January 2019 researchers confirmed a successful 51% attack on the Ethereum Classic blockchain.
Gate.io identified the txhashes where hackers were able to roll back transactions and steal around 54,000ETC in total.
In a statement, they said: “It happened between 0:40 Jan.7, 2019 and Jan 4:20 Jan.7, 2019 UTC for about 4 hours.
“All the transactions were confirmed normally on the ETC blockchain and became invalid after the blockchain rollback. Three of the attacker’s ETC accounts are identified as follows:
“We suggest all platforms to block the transactions from the attacker’s accounts.
“Gate.io’s censor successfully blocked attacker’s transactions at the beginning and submitted them to the manual exam.
“Unfortunately, during the 51% attack, all the transactions looked valid and confirmed well on the blockchain. The examiner passed the transactions. It caused about 40k ETC loss due to this attack. Gate.io will take all the loss for the users.”
A security fail as large as this exploit should have sent the price plummeting and traders running for the hills.
Days later, Gate.io reported that the hack may not have been as catastrophic for Ethereum Classic as first feared.
“On Jan.10, we found that the recent ETC 51% attacker returned 100k USD value of ETC back to Gate.io.
“We were trying to contact the attacker, but we haven’t got any reply until now.
“We still don’t know the reason. If the attacker didn’t run it for profit, he might be a white [hat] hacker who wanted to remind people the risks in blockchain consensus and hashing power security.”
ETC was also one of three cryptocurrencies banned in February from being used in ICOs and as a trading pair by Thailand’s Securities and Exchange Commission.
Purists might argue it is no bad thing to be mentioned in such close company with Bitcoin Cash et al.
But a trading block is never a good thing, especially with the explosion of the South Asian market and regulators’ desire there to move quickly and decisively to support crypto businesses.
After holding in the $7.60 range on Monday morning ETC pushed lower, striking $7.20 on Coinbase by 9:40am GMT.