What is Ethereum Classic?
Even for the exciting world of cryptocurrencies, Ethereum Classic has a dramatic origin story. The result of a highly-publicised spat within the Ethereum community after a multi-million dollar heist, this new altcoin promises to uphold everything that made Ethereum tasty and refreshing to begin with ‒ the crypto Coke Classic. But does it live up to the promise?
The Ethereum Classic blockchain is identical to the old blockchain up to the point of block 1920000 ‒ when a hard-fork was used to refund venture capitalists from The DAO (Decentralized Autonomous Organization) after hackers tried to make off with 3.6 million of their Ether ‒ more on that later. The upshot is that all transactions and balances that occurred before the fork on Ethereum are still valid, but after the fork both blockchains now operate independently.
In the main, Ethereum Classic behaves exactly like its predecessor ‒ with identical specifications for block time and mining rewards. Moreover, it still runs smart contracts, and upholds the old Ethereum values of fully decentralised governance. Ethereum Classic was created as a matter of principle, against accusations that Ethereum’s response to The DAO fiasco betrayed what Ether was all about.
But I’ll bet the question you’re interested in is: what’s it worth? Let’s take a look…
How to Mine Ethereum Classic
The first question: is Ethereum Classic worth mining? The short answer is: definitely. Since the fork, Ethereum Classic has consistently been in the top ten performing cryptocurrencies and has ranked highly among users for mining recommendation. The altcoin can be mined at a number of different mining pools, but we like to use Kraken along with Genoils Miner (because there’s no dev fee). Depending on your rig, mining for Ether Classic can be a decent little earner.
What is the Value of Ethereum Classic?
Ethereum Classic has been performing strongly over the course of 2017, although its market cap is down from $1.5bn at the beginning of the year to around £1bn today. It’s still a major player, ranked 5th amongst all cryptocurrencies, assisted in large part by its popularity with the Chinese market. Considering many worried that this new altcoin would not survive, it’s in impressive shape.
This is not to say Ether Classic was without its teething problems. In August last year, the altcoin would go through lows of falling 90 per cent in a day and highs where it would rise by 200 per cent. At the moment, the hash rate for Ethereum Classic is far lower than Ethereum, but there have been long stretches since the fork in June 2016 where there has been a higher volume of Ether Classic traded. This is a promising sign, suggesting there is a genuine market for this altcoin ‒ if a thin one, for now.
At the time of writing Ether Classic is trading for around $11 USD, as compared to $280 for Ethereum. As you would expect from the far lower hash rate and smaller number of miners, Ether Classic isn’t a patch on the value of its daddy. But this is a maturing altcoin that has already attracted the support of prominent crypto investors like Barry Silbert, and plenty of exchanges have come on board.
How to Buy Ethereum Classic Online - Step-by-Step Guide
The duplication of the old blockchain means that, if you have a stash of Ether at any exchange that supports the new cryptocurrency, you should now have an equal balance of Ether Classic. If you haven’t got any Ether and want to get in on the hot new thing, Ethereum Classic has created an official browser extension: a very handy little tool that makes trading Ether Classic and managing your wallet a breeze.
- Visit the official ethereumclassic.github website and click the ETC wallets dropdown menu, then select your browser. You will then be taken to an ETC wallet download page.
- You will be invited to add ClassicEtherWallet to your browser. Click ‘Add app’ to confirm.
- Once added, click the Ethereum Classic icon that should have appeared in your toolbar.
- In the pop up there will be an option to ‘Add Wallet’ – click it.
- In the menu at the top of the page, click ‘My wallets’. You should now see your newly generated wallet and a long string of numbers and letters: your wallet address. Copy this and keep it safe ‒ you’re going to need it later.
- Another box contains your unencrypted Private Key ‒ a way of opening your wallet without your password. Copy this string and guard it jealously, because anyone with it will have access to your coins.
- Click the download button underneath the ‘Keystore/JSON File’, which will download your wallet to your device. You can use this file on any computer, but you will require your password. Don’t forget to back the file up!
- You can’t buy Ether Classic with fiat, so you’ll need to trade some other cryptocurrency. So go over to Coinbase.com and get yourself an account if you haven’t already. You’ll need to give your full name, date of birth, email address and location. To verify your account, you’ll also need photo ID and a linked credit/debit or bank account.
- Once your payment details are all verified, click buy/sell from the menu at the top of the page, and select whichever popular cryptocurrency you would like to purchase, choose an amount, and hit ‘Confirm Buy’.
- Now it’s time to get some Ether Classic. Head to the website Changelly, register via social media or with an email address, enter the amount of cryptocurrency you’d like to exchange and hit the ‘Exchange’ button when you’re ready.
- Next, you’ll be asked for your ETC address, which is the personal wallet address you saved in step five. Copy and paste it into the box and hit ‘Next’.
- Once you’ve reviewed the transaction, you’ll be shown an address to send your cryptocurrency ‒ copy it.
- Get back to Coinbase and select ‘Account’ from the top menu, find your wallet listed on the left and hit send.
- Paste the wallet address copied from Changelley into the ‘Recipient’ box and select the amount of currency you wish to send. Then hit ‘Continue’.
- It might take a few minutes to move the coins across the network, so be patient. A confirmation screen will appear on Changelley when the process is complete.
- Return to the Ethereum Classic Wallet in your toolbar, and hey presto! Your Ether Classic should have arrived in your balance.
How to Trade Ethereum Classic Online - Step-by-Step Guide
The success of Ethereum Classic after the fork means that a number of exchanges have added Ether Classic ‒ including Bittrex. Getting set up and starting to trade is easy with our handy guide!
- Visit bittrex.com and create an account, giving all of the usual details including your name, email address, date of birth, location and a chosen payment method. To trade at higher limits, you might also be asked for proof of ID.
- Click ‘Wallets’ in the top menu bar and deposit a popular cryptocurrency – bitcoin will do just fine. Click on the plus button, and copy the address that pops up.
- Send Ethereum Classic from your ClassicEtherWallet and clock on the ETC icon.
- You will then be presented with a chart of the coin’s performance on the markets: you can fiddle with the fields and tools to show different spans of time, or add trend lines and indicators.
- The spread will be visible on the right hand side of the chart, along with the 24 hour high and low.
- Beneath the chart, you can buy and sell – setting your limits as you wish. If you like, you can put in an order below the market price and select ‘Good ‘Til Cancelled’, then the platform will make the purchase when the market hits your price.
- That’s it – you’re trading Ether Classic: enjoy!
Why was Ethereum Classic Created?
Ethereum Classic is the result of a schism in the Ether community, which all began with an attempted robbery in June 2016. The DAO was instantiated on the Ethereum blockchain as a radical new kind of venture capital fund. Its decentralised business model had no management structure and no board of directors. It was not associated with any state, and thus untouchable by government regulators ‒ in-keeping with the values of Ethereum. The DAO raised £150m in working capital (all in Ether) through community crowdsourcing.
All was well until June 2016, when a number of users exploited a loophole in the rules governing the purchase and sale of Ether. By inverting a recursive command, the digital desperados siphoned off a third of The DAO’s stockpile of Ether, although a 28-day hold on withdrawals prevented them from making off with the loot right away.
A majority of the Ether community felt that the stolen Ether should be returned to its investors and proposed to initiate a hard fork, which would erase the history of the theft ‒ editing it out of the blockchain’s history.
While most were on board with this plan, a faction of the Ether community saw this move as an affront to everything the blockchain stood for. They organised under the banner of ‘The Code is Law’, arguing that the blockchain should be a transparent and immutable record of contracts and transactions. As such, they continued on a parallel blockchain that retained all the original Ethereum history ‒ crucially, including the theft.
What Is Different About Ethereum Classic?
The short answer is: not much. Ether and Ether Classic are functionally identical, with the exception that the former is currently performing a lot better at the moment. Both Ethereum and Ethereum Classic use smart contracting functionality to provide additional security and minimise transaction costs. The downside of this approach is that it made robbing The DAO possible.
Ether Classic is undoubtedly the underdog. However, its adherents argue they are thinking about the long term. If ‒ supporters ask ‒ the blockchain can simply be edited on a whim, then how can it have any meaning? How many forks will there be in future? Before long, could there be a whole host of Ethereum derivatives fighting for recognition in a crowded market?
Users opposed to the fork argue that the fiasco with The DAO represents the crest of a slippery slope, because once you begin to tamper with the blockchain, there’s little to stop you from doing the same for future contracts. Critics argue that the refund ‒ which they call a digital bailout ‒ will inevitably reduce the value of Ether down the line. Ether Classic is, in their eyes, the sustainable prospect, whose ideological purity will keep it competitive.
Future of Ethereum Classic Trading
Given the circumstances, it is impossible not to discuss the value of Ethereum Classic in relation to Ethereum. The original blockchain is the current success story, considered the darling of investors and solidly holding the number two position behind bitcoin. However, that doesn’t mean Ether Classic is unworthy of your attention.
The new altcoin is holding its own, partly due to support from the Chinese market. Ether Classic underwent an important test in July 2017, when the big five all began to dip in market value simultaneously, while Ether Classic actually gained in value. This might suggest a dedicated market is beginning to emerge, which could mean Ether Classic has potential to mature into a serious competitor.
The relatively low value of Ether Classic at this early stage isn’t necessarily a guide to the future. Plus, a big shakeup is on its way in the form of Ether’s change from a proof-of-work model to proof-of stake. This could really go either way: Ether Classic holders will be protected from a disaster, but will be left out of their share of the loot if the changeover proves successful. Only time will tell.
How to Buy Ethereum Classic with Credit Card
You cannot buy Ether Classic with fiat, meaning you will have to purchase and trade other cryptocurrencies for it. However, if you create an account on Coinbase, you will be able to link your bank account or make payments to your balance using a credit or debit card. The latter has a number of advantages, including reduced waiting times and enhanced security.
The process for adding to your balance with a credit card is identical to using a bank transfer ‒ simply select this as your chosen payment method. Please be aware that you will be charged a small fee to add cash to your balance via credit card. Additionally, credit and debit cards are necessary for lower limit purchases. Once you’ve added some fiat to your balance, you can pick up some bitcoin, Ether or Litecoin and trade them for Ethereum Classic using the method described above.
How to Buy Ethereum Classic with PayPal
Coinbase support for PayPal is currently in beta phase, and is only available to US citizens. If you are from the USA you can link your PayPal account to your Coinbase account. This can be done by adding PayPal as your preferred payment method, and verifying your PayPal account with Coinbase. You will then be allowed to withdraw fiat currency into your PayPal, and pay for Litecoin, bitcoin or Ether directly from your PayPal balance.
This is an extremely secure payment method that permits instant selling, although it also has low limits and a small fee. While this option is not yet available to users outside of the US, Coinbase intends to roll PayPal support to other territories in the near future.
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