Ethereum Classic Overview
Ethereum is one of the top-ranking cryptocurrencies available today. Thanks to a security breach that resulted in something of a crisis and controversy, Ethereum Classic has also joined the ranks of Altcoins which rival Bitcoin for dominance in the cryptocurrency market. While there is debate among enthusiasts which is better, Ethereum or Ethereum Classic, the fact is that both make worthwhile investment opportunities.
The History of Ethereum Classic
Ethereum in its original form works on a principal known as smart contracts. To simply the understanding of this concept, these smart contracts are how things get managed in the world of Ethereum. Smart contracts are also what differentiate this digital coin from others like Bitcoin which use a more rudimentary blockchain as the basis of their platform.
One such smart contract was known as the Decentralized Autonomous Organization, or DAO. The premise of this smart contract was to create a decentralized venture capital fund that would fund transactions made in the Ethereum platform. While it all sounds a bit confusing, the key takeaway is the the DAO was functioning as intended. More than $150 million dollars of Ether were accumulated and many investors chose to participate. Then, a disaster happened.
The DAO became the target of a hack on June 17th, 2016. About $50 million of the DAO funds were stolen. This single event negatively affected the overall faith many people had in digital currency. Ethereum’s value plummeted. The developers of Ethereum knew that they had to take action on this in a timely manner, and what they chose to do was something called a hard fork.
Forks, both hard and soft, are essentially updates to the blockchain eco-system. Soft forks are similar to backward compatible software updates. What the Ethereum hard fork was intended to do was render the Ether stolen in the DAO hack worthless and unusable. As a result of this fork, Ethereum Classic is the name given to the original currency platform that appeared in July 2015. Ethereum is the name given to the new forked version. Ethereum Classic is referenced as ETC on cryptocurrency exchanges.
Ethereum Classic Mining
The mining of both Ethereum and Ethereum Classic is accomplished by the resolution of complex mathematical problems. As a reward for solving these problems, miners receive Ethereum Classic digital coins. The process of mining can be complex and requires specialized computer hardware. It can involve consuming a vast amount or resources as well as high electricity requirements.
One critical difference between the mining of Ethereum and Ethereum Classic is that Ethereum Classic intends to maintain its Proof of Work (PoW) consensus which rewards miners using a GPU to advance and support the platform’s blockchain. Ethereum has announced that it will switch to a new experimental model which will not utilize Proof of Work technology. This means that many of those who have traditionally mined Ethereum will not be able to do so any longer.
Rather than attempt to mine their own classic Ether, many individuals are choosing to go with a mining pool or collective that allows them to reap the benefits at a much lower cost. When one participates in a mining pool, the cost of participation is shared with other individuals and the group also shares the rewards. All are given equal shares of the Ethereum Classic that is generated from mining.
Genesis Mining is one of the most popular mining pool providers today. The company maintains mining farms in undisclosed locations around the world and provides complete contracts at a minimal investment. There is no expensive equipment to maintain and no overhead of fees. The cost of participation is all-inclusive and users can also reap benefits by referring others to the pool.
Ethereum Classic Use and Acceptance
Because Ethereum and Ethereum Classic are two of the most popular cryptocurrencies, their acceptance is more widespread than some other Altcoins. Major retailers like Overstock.com have been among the first to embrace the use of Bitcoin, Litecoin, and more for online purchases. Subway has become one of the first physical retailers to accept cryptocurrencies in some of their stores.
Other companies that are currently accepting Ethereum or Ethereum Classic as forms of payment include Microsoft, Intel, Mastercard, Cisco, and more. At the present time the trend is that technology companies are being the first to embrace an acceptance of Ethereum. There is a very logical reason for this. It is simply easier for online companies to integrate the acceptance of cryptocurrencies at the present time. As more sophisticated payment processing platforms become available, the number of physical retailers who accept Ethereum and Ethereum Classic should increase.
One the most popular ways to use Ethereum Classic today is as an investment. Individuals can buy and sell the coin via a number of cryptocurrency exchanges. It can be traded in much the same manner as traditional currencies are in the Forex market. Those who wish to pursue this form of use should be advised that investing in cryptocurrencies carries an inherent risk and should be done by those who have some investment experience.