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Pros And Cons Of Investing In Ethereum Classic

13 Min Read
Last Updated March 27th 2021

What Are The Advantages And Disadvantages Of Ethereum Classic?

Learn more about the pros and cons of investing in Ethereum Classic pushing you ahead to know if it is a good idea to invest in ETC.

Ethereum Classic just might be the missing piece in your investment portfolio. Here’s why you might consider investing in ETC, the pros and cons, and what exactly to look for.

Ethereum Classic (ETC) is one of the most interesting but undervalued assets in the cryptocurrency sector. Created as a fork of Ethereum, known as the king of smart contracts, Ethereum Classic has gone a long way since its inception.

And yet, do the advantages of investing in ETC outweigh possible risks? Will the year 2021 be a successful time for ETC and cryptocurrency investing? 

Keep on reading to find out more about Ethereum Classic and decide for yourself if you should consider buying ETC this year. 

What Is Ethereum Classic?

Ethereum Classic is a decentralised blockchain-based platform that can support smart contracts and decentralised applications (dApps).

It was charismatic Vitalik Buterin who conceptualised the existence of Ethereum after witnessing Bitcoin’s limitations. Buterin - who for many is the main key to Ethereum’s success - created a platform for smart contracts, as well as decentralised apps, exchanges, and much more. Here we should mention that smart contracts are invaluable in business settings as they can be coded to become agreements, such as real estate sales.

In 2016, however, Etherem split into two battlefields: Ethereum and Ethereum Classic. 

Ethereum Classic is defined as the original Ethereum blockchain. As stated above, it was created after a split within the Ethereum community in 2016.

Here we should explain more about the events that led to the split. In 2016, a third-party autonomous application called the DAO was hacked and more than $50 million in ether was stolen. As a result, the platform split over ideological differences into Ethereum and Ethereum Classic.

While Ethereum decided to go against the Code is Law principle in the crypto sector and return the stolen funds to users, Ethereum Classic stood behind the immutable nature of the blockchain.

Supporters of Ethereum Classic - with Barry Silbert (CEO of Digital Currency Group) being one of its main backers - still praise themselves for being crypto idealists who believe that blockchains shouldn’t be affected by humans or modified regardless of the outcome.

As explained on their website, “So, code is law on the blockchain. All executions are final, all transactions are immutable. For everything else, there is a time-tested way to adjudicate legal disputes and carry out the administration of justice. It's called legal system.”

In return, though, Buterin wrote in 2016: “We recognize that the Ethereum code can be used to instantiate other blockchains with the same consensus rules, including testnets, consortium and private chains, clones and spin-offs, and have never been opposed to such instantiations.”

Here we should note that other crypto projects have also experienced similar problems and debates. Take Bitcoin and Bitcoin Cash in 2017, for example! 

Or when more than 7,000 BTC were stolen from the Binance exchange in 2019, when Binance’s founder Changpeng Zhao suggested that the Bitcoin community had to roll back the blockchain.

Who’s right, who’s wrong? Well, one thing is for sure: despite its beliefs, Ethereum Classic lags behind Ethereum in terms of market cap and adoption. 

And yet, there are many reasons why you should consider Ethereum Classic! Let’s look at some of the major pros of investing in ETC.

Have you consider investing in Ethereum Classic ETC?

Pros Of Investing In Ethereum Classic

pros of ripple

Knowing the advantages of investing in ETC is a must in order to make an informed decision regarding your investments. Even though ETC is not as popular as ETH, buying Ethereum Classic has various benefits. 

Here are some of the most alluring aspects of ETC:

✅ Ethereum Classic is decentralised:

Ethereum, just like other cryptocurrencies, is decentralised with nodes being spread across the globe. That means that payments and transactions are executed without having to rely on costly third parties or restrictive governments.

✅ Ethereum Classic is the original Ethereum:

Since Ethereum Classic is the unaltered version of the Ethereum blockchain, many call Ethereum Classic the original or real Ethereum. Such strong beliefs about the immutability of the platform have led to the creation of a dedicated group of users and blockchain enthusiasts. As stated on their website, Ethereum Classic is the continuation of the unaltered history of the original Ethereum chain. The ETC network exists to preserve the principle of "Code is Law."

✅ It supports smart contracts and dApps:

As Ethereum Classic is technologically similar to Ethereum, we shouldn’t be surprised that one of the biggest advantages of Ethereum Classic is the fact that it supports smart contracts and dApps, which have wide applications across industries.

✅ ETC is cheaper than ETH:

Though ETC might have a hard time getting past ETH, ETC is still at the upper Top 100 range of the cryptocurrency ranking. On top of that, as ETC is much cheaper than ETC, it’s an ideal asset for beginners.

✅ It is trying to create ties with Ethereum:

To provide an example, ETC Agharta and Phoenix hard fork completed in 2020 make Ethereum Classic more interoperable with Ethereum.

 

Cons Of Investing In Ethereum Classic

cons of ripple

While Ethereum Classic comes with some tempting advantages, there are also drawbacks one should consider before buying ETC. Understanding the cons of ETC is crucial to help investors create an effective risk management strategy.

Here are some risks of investing in ETH:

❌ Ethereum Classic is not backward compatible with Ethereum:

After Ethereum forked, Ethereum Classic became incompatible with Ethereum, which means that anyone who supports ETC won’t be able to access any of the ETC updates (including ETH’s move to proof-of-stake).

❌ Ethereum Classic is quite inactive:

Ethereum Classic lacks high community interest and developer activity. At the same time, the projects hosted on the platform are almost owned by Parity Technologies, raising concerns about ETC wealth centralisation.

❌ Ethereum Classic is considered unsafe:

The fact that Ethereum Classic suffered various 51% attacks has led to a deteriorating trust in the platform, which may push prices and interest down.

❌ Ethereum Classic has a dodgy image:

The coin’s image is also affected by different speculations that ETC is fraudulent and an attack on Ethereum to cause distribution in the crypto sector. Bloggers David Seaman even said, “Classic is an insecure orphan chain being promoted in a way that would be illegal if Ethereum were a publicly-traded company, which it could eventually be.”

Read Also: What Will Drive The Ethereum Classic Price In 2021?

 

Should I Invest In Ethereum Classic?

Now when you know the pros and cons of investing in Ethereum Classic, you can decide for yourself if potential rewards outweigh risks. So should you invest in Ethereum Classic? Is ETC a profitable asset for your portfolio?

ETC might be a risky investment, true. While Ethereum has made so far a spectacular comeback, Ethereum Classic will always be seen as the less popular sibling of Ethereum. 

At the same time, Ethereum Classic has a strong community of supporters who believe in the immutable nature of the blockchain, insisting that Code is Law, which is the wonder of blockchain mechanics.

Besides, the current price of ETC is seen as a low barrier for crypto investors and traders, especially when compared to ETH.

Just remember that if you decide to invest in ETC, you should always do your research and invest in an effective risk management strategy. Never invest money you can’t afford to lose.

Put simply, Ethereum Classic is medium-risk investment with lots of potential rewards. It’s something you should definitely do some research before you consider adding it to your portfolio.

The real Ethereum classic investing question then, does it really work? If you’re willing to invest the time and energy, then for you, it could work.

Read More: How to Invest in Ethereum Classic

Will Ethereum Classic Be a Millionaire Maker?

With a market cap of above $1 Billion, we can say that in a sense ETC is already a millionaire maker.

Given its limited supply of 210,700,000 coins, ETC value may increase as crypto scarcity tends to promote growth.

Yet, looking at ETC past performance, it’s clear that Ethereum Classic is nowhere near its past peak. Note that in 2017, ETC climbed to around $20, but since then, it has been moving in a downtrend.

In May 2020, Ethereum Classic was ranked 19th on CoinMarketCap, with a market capitalisation of $740.294 million and a trading volume of $1.42 billion. 

At the time of writing, Ethereum Classic is ranking #54.

Nevertheless, some experts are positive and believe that ETC may explode again and advance much above its current price levels.

Let’s not forget that Ethereum Classic has undergone various upgrades recently, such as Atlantis in 2019 and Agharta in 2020, in an attempt to build a bridge between Ethereum and Ethereum Classic. With the completion of the Phoenix hard fork in 2020 - another ETC fork that aims to make ETC more compatible with ETH’s upgrade Istanbul - the ETC-ETH agenda is closer to users.

ethereum fork

Major Ethereum Forks; Source: Capital.com

We should note that Ethereum Classic opened in February 2021 at $7.34. According to Long Forecast, at the end of the month, Ethereum Classic will reach $10.28, or a change of 40.1%.

Of course, price predictions remain speculative; they depend on different factors, such as demand and supply principles, technology advancements in the crypto space, and market sentiment and speculation.

So, always stay up-to-date with crypto news and announcements and price analysis data.

Read Also: Ethereum Classic Price Prediction: How Much Will ETC Be Worth In 2021 And Beyond?

 

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Key Points

  • Ethereum Classic was created after a split in the Ethereum community in 2016.
  • Ethereum Classic is considered by some crypto experts the real Ethereum.
  • ETC is the ticker symbol of Ethereum Classic.
  • Ethereum Classic has various pros, including its decentralised and immutable nature.
  • That said, investing in ETC can be risky. The asset itself is considered unsafe due to various 51% attacks.
  • Though Ethereum Classic is much behind Ethereum and other smart contract players, some believe that because of its openness to updates, buying ETC in 2021 is worth it.
  • With a market cap of $1,047,164,733, we can say that ETC is already a millionaire maker.
  • Nevertheless, investing in ETC remains risky, so always consider the risk-reward profile of the asset you’re interested in before you start buying or trading cryptocurrency.

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FAQs

Is Ethereum A Better Investment Than Ethereum Classic?

Ethereum, known as the authentic Ethereum, is considered by many a better investment than Ethereum Classic. Ethereum is also a better trading asset as it has high market volatility and demand. After all, Ethereum is the second-largest crypto, only behind Bitcoin in terms of market cap and adoption. Ethereum Classic, on the other hand, remains risky, with fewer investors and crypto enthusiasts interested in it.

Is Ethereum Classic Mining Profitable?

Yes, mining ETC can be profitable. Calculating ETC mining profitability depends on different factors, including mining hardware, rewards, and electricity costs. Yet, do not forget that mining profitability changes quickly and depends on the total computing power for mining blocks and generating hashes.

Will Ethereum Classic Become A Leading Smart Contract Platform In The Future?

Ethereum Classic is behind other smart contract projects. With lots happening on the Ethereum platform, though, some experts believe that Ethereum Classic can become a backup smart contract platform, especially in case proof-of-stake on Ethereum doesn’t work in the future.

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