Ethereum Classic Price Expected to Soar After Open Interest Hits New High

With the Ethereum Merge only days away, the much-anticipated event has the entire crypto community excited, which also affect the Ethereum Classic price.

 

Interestingly, the development of the move from Proof-of-Work (Pow) to Proof-of-Stake (PoS) has facilitated a rising degree of debate over the merits of the two mechanisms and previous Ethereum forks.

 

Ethereum Classic, known by some as ‘The Real Ethereum’, was what Ethereum was before The DAO Hack in 2016 wiped away 3.5 million ETH and saw founder Vitalik Buterin use his influence over the community to engineer a hard fork.

 

The decision was highly controversial, given that Ethereum was supposed to be operating under the notion of decentralization and that code is law, and this decision directly contradicted that.

 

The old chain became known as Ethereum Classic (ETC), and the new chain Ethereum.

 

The Ethereum merge exposes more investors to Ethereum Classic

The Ethereum Merge has a lot of supporters for all sorts of reasons. Some are huge proponents of proof of stake and believe that the transition will be better for the environment rather than proof of work, which consumes a lot of energy in order to secure the chain.

 

Bitcoin is currently estimated to use about 0.1% of the world’s electricity to keep the chain secure, and this number is expected to rise with price, since there is an incentive for miners to arbitrage the difference between input and output.

 

Others are keen on some of the fact that PoS has a completely different security model to Bitcoin. Unlike PoW, where the security of the network is contingent on the hash rate (meaning a higher price not reflected by a higher hash rate becomes more financially viable to attack), PoS uses price as a form of security.

 

If one wishes to compromise the network in a PoS system, they must control the majority of the staked ETH, which means that the higher the price of ETH, the more difficult it is to attack the network.

 

Download App for Android

Download App for iOS

Is Ethereum Classic (ETC) secure enough?

There are some who are uncertain about the future safety of Ethereum Classic and are concerned that the relatively low hash rate of the chain, which has no plans to migrate from PoW, could be problematic.

 

In the past, Ethereum Classic has suffered from quite a few ‘51% Attacks’, which have rocked faith in the community.  In 2020, despite the fact that it had survived, the blockchain became something of a joke after suffering three 51% attacks in only one month.

 

Since Ethereum Classic has a far smaller market cap and far lower hash rate than other blue chips, it is relatively easy for malicious actors to conduct 51% attacks. This practice can be made even easier by the phenomenon of rented hash power.

 

Is ETC price expected to soar?

There has been some speculation that the price of Ethereum Classic is poised to surge, especially when one considers the fact that open interest has hit an all-time high. The news of the progress on the Merge has excited a lot of people, and caused a ghuge increase in ETC mining, but has also caused further controversy.

 

Some, such as ETHPoW community for example, have vowed that they will conduct a hard fork away from the main Ethereum chain and run their own, although it is unclear how successful this will be: when there is a fork such as this, many assets will be replicated across two different chains.

 

This is problematic because it can’t be that both chains have assets that are worth the same – stablecoins issuers will only be able to accept redemption from assets on one of the chains, for example.

 

Many Ethereum miners have become quite disenfranchised with the recent developments in the crypto space and have announced that they are likely to mine other coins instead.

 

There has been some debate amongst them over which coins are the best value to mine, and which have the most potential going forward. If ETHPoW doesn’t gain as much traction as it would need to succeed (and it seems that is all probability, the chain will not reach the necessary traction required to be considered a “success”), then it is likely that the effort will have been a complete waste of time.

 

Moreover, miners may prefer to choose to mine Ethereum Classic rather than ETHPoW because Ethereum Classic already has a significant hash rate, and ETHPoW would be starting from scratch – it is quite possible that even if a lot of people do choose to adopt ETHPoW, that they suffer from a series of 51% attacks.  It may therefore be far simpler for miners to continue with the tried and tested Ethereum Classic.

 

The rise in hash rate that Ethereum Classic is expected to gain as a result of the merge isn’t insubstantial, and it has already been rising somewhat.

 

Ethereum Classic is expected to continue to rise further after the merge, so the improved security of the network will mean that there is much hope for further appreciation in the price of Ethereum Classic – it could justify a higher price when the network is more secure, as a 51% attack is unlikely.

 

Read More:

LUNA Classic Burn: Will LUNC Burn Its Supply?

Luna Classic Burn: Can the Program Really Pump LUNC Price to $1.00?

Tamadoge Crypto Price Prediction 2022-2023-2025

Pi Network Mainnet: When Is Pi Coin Launching?