Ethereum hard forked on July 20th, 2016 with a swell of community support. Many exchanges briefly suspended trading. When Poloniex resumed it, two Ethereum coins were available. Ethereum Classic – the unforked Ethereum blockchain – had become the newest traded cryptocurrency.
Ethereum Classic claims to support the founding vision of Ethereum in which code was law. The hard fork to return DAO funds is seen as a violation of that law. They lay out their vision in both Github and in a longer manifesto.
We believe in decentralized, censorship-resistant, permissionless blockchains. We believe in the original vision of Ethereum as a world computer you can’t shut down, running irreversible smart contracts. We believe in a strong separation of concerns, where system forks are only possible in order to correct actual platform bugs, not to bail out failed contracts and special interests. We believe in censorship-resistant platform that can be actually trusted – by anyone.
While community voting seemed to overwhelmingly support the Ethereum hard fork to return the funds stolen from The DAO, the debate was bitter and divisive. Ethereum Classic has been no different. A Hufftington Post blogger even dismisses it as a Bitcoin-related scam, and even Poloniex has taken heat for supporting its trade. At time of writing, it’s the only exchange to have done so.
Nonetheless Ethereum Classic has amassed support, including praise from social media and five active mining pools. Some miners have switched over, though the hash rate of the Classic Chain is only approximately 3% of the Ethereum hard fork (120 Ghash v 3800 Ghash).
Will the Community Support it?
So far, markets seem unsure how to react to the new coin. A functional blockchain explorer is still forthcoming. The price of one ETC is just 4.4% of ETH, but this still places ETC in among the top 10 cryptocurrencies by market capitalization. Holders of Ethereum should also have equivalent holdings in Ethereum Classic, and they can decide whether to buy or sell on Poloniex.
The order book for ETC is a little lopsided, with a mountain of buy orders if the price drops even more. This suggests speculative trading – it would be relatively easy to amass a significant portion of ETC. Its price volatility might make it an arena for high-risk trading.
ETC will be an experiment in blockchain governance, currency forking, and high-volatility trading. Regardless of its future, it will yield lessons for future projects.