Pros And Cons Of Investing In Ethereum Classic
What Are The Advantages And Disadvantages Of Ethereum Classic?
Learn about the pros and cons of investing in Ethereum Classic so you can figure for yourself 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 and potentially undervalued assets in the cryptocurrency sector.
Created as a fork of Ethereum - known as the King of Smart Contracts - Ethereum Classic has traversed multiple obstacles to become one of the best alternative smart contract and dApp platforms.
And yet, do the advantages of investing in ETC outweigh possible risks? Will 2021 lead to success for ETC and cryptocurrency investing?
Read on 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).
Vitalik Buterin conceptualised the existence of Ethereum with several other co-founders after realising the wider potential of blockchain technology beyond Bitcoin.
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. (Who knows what else Ethereum can be used for!)
Smart contracts are invaluable in business settings as they can be coded to become agreements, such as real estate sales and show ownership of property. They are the foundation of a blockchain ecosystem.
Ethereum Classic is the original Ethereum blockchain, and what we now call Ethereum is technically the newer version.
From this point, the community split into two factions with the majority moving to the new Ethereum and a minority choosing to stay with what would become Ethereum Classic.
So, Why Are There Multiple Ethereums?
In 2016, a third-party autonomous application called the DAO (Decentralised Autonomous Organisation) was hacked and more than $50 million worth of 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 manipulated by people, regardless of the reason or outcome.
As Blockchain Society explained when discussing Ethereum Classic:
“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 [the] 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”.
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 rollback 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.
But with that in mind, it doesn’t mean that traders should stick only to Ethereum - there is still plenty to be made trading ETC. So, 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
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. This 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. This is appealing to those that believe that Ethereum has changed too much since its creation. 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.
To function, these smart contracts and dApps need to use ETC as fuel, creating demand for the coin. Hence the more devs build on the network, the theoretically higher ETC will be valued.
✅ ETC is Cheaper than ETH:
Though ETC might have a hard time getting past ETH, ETC is still in the top 20 range of cryptocurrencies by market cap. Further to that, ETC is much cheaper than ETH, making it an ideal asset for beginners.
And it’s not just Ethereum itself that is expensive, making transactions can be extremely costly. Particularly during the last crypto bull run transaction fees spiked multiple times, making Ethereum almost unusable for devs.
As data from YCharts shows, the average transaction costs for Ethereum reached $69.43 on the 12th of May then reached $71.72 on the 19th of May.
This makes Ethereum Classic a much better alternative for technical users to build upon.
✅ It is Trying to Create Ties with Ethereum:
Though ETC and ETH have their differences, they do recognize that by working together they will achieve more.
To provide an example, ETC’s Phoenix hard fork completed in 2020 made Ethereum Classic more interoperable with Ethereum for the first time in years.
This will enable devs to collaborate between platforms and drive innovation, which will hopefully bring more users to Ethereum Classic.
✅ ETC Is Being Enhanced By IOHK
Since they started working on the project, they have introduced Mantis, a client natively written for Ethereum Classic. Its purpose is to mitigate attacks and improve security.
✅ Ethereum Classic Is Appreciating In The Long Run
Despite a big loss of value after the bull run in May 2021, ETC is still far higher than it was at the start of the year and most of its existence.
ETC started 2021 at around $5.7257, then reached an all-time high of $176.16 by the 6th of May. At the time of writing, it currently stands at $56.21, which is almost ten times higher than at the beginning of the year.
This suggests that though there will always be large peaks and troughs, in general, ETC’s price is going up.
Don't Miss: Ethereum Classic Price Predictions
Cons Of Investing In Ethereum Classic
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).
As the two continue to develop in different directions, they will become increasingly different from each other.
Thankfully, moves towards interoperability will make this less problematic, but it still means ETC is missing out on a lot of crucial upgrades.
❌ Ethereum Classic Is Quite Inactive
Ethereum Classic lacks high community interest and developer activity. In comparison to Ethereum, Ethereum Classic has a tiny number of active wallets and minuscule growth.
Ethereum and Ethereum Classic active wallets. Source: bitinfocharts.com
And the picture only gets bleaker when you compare the two for GitHub activity.
According to CoinCheckup, Ethereum Classic’s activity is almost non-existent, making no commits for an entire year. Meanwhile, Ethereum made about 768.
❌ Ethereum Classic Is Considered Unsafe
Ethereum Classic has suffered various 51% attacks which has led to a deterioration in trust.
You would think that Ethereum Classic would take action to prevent this from happening (after all, it was how it was created). But embarrassingly so, it looks like not enough action was taken.
The first major attack took place in 2019 and led Coinbase to temporarily stop ETC transactions. Then in August 2020, Ethereum suffered three 51% attacks.
With IOHK’s help, it may be the case that Ethereum Classic has moved past this. However, if another attack happens at this point after all the security changes, it could very well be the end for ETC.
❌ 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.
Blogger David Seaman even said:
“[Ethereum Classic] is just an insecure orphan chain which is being promoted by a wealthy guy [Barry Silbert] in New York, relentlessly, in a way that would be absolutely illegal if “Ethereum” were a publicly traded company or commodity.”
It will be exceedingly difficult for ETC to move past the image of being created from a hack unless it starts to offer much more than an alternative to Ethereum.
❌ Interest In Ethereum Classic Is Disappearing
Adoption is especially important to prices. The more people use ETC, the more demand there will be for it and the price should therefore increase.
As a side note, it will also make ETC more secure as more users mean it will be more difficult to hack.
Ethereum Classic search interest, July 2020 to July 2021. Source: trends.google.com
The graph above highlights the issue. While at times Ethereum Classic has gone through spikes of interest, generally speaking, it hasn’t been able to maintain that interest.
Should I Invest In Ethereum Classic?
Now 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 - this much is true. While Ethereum has made a spectacular comeback so far, 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 a medium-risk investment with lots of potential rewards. It’s something you should definitely do some research on before you consider adding it to your portfolio.
The real investment question for Ethereum Classic is does it really work? If you’re willing to invest the time and energy, then for you, as a trader, it could work.
Will Ethereum Classic Be a Millionaire Maker?
With a market cap of above $6 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.
Looking at ETC’s past performance, for a long period it struggled to get back to its peak of $20 per coin in 2017. But that all changed with the 2021 bull run.
At the time of writing, Ethereum Classic ranks 18th by market cap, according to CoinMarketCap.
Some experts are positive and believe that ETC can explode again beyond 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 Istanbul upgrade - the ETC-ETH agenda is closer to users.
Major Ethereum forks. Source: Capital.com
We should note that Ethereum Classic opened in February 2021 at $7.34, and according to DigitalCoin, ETC could end up closing the year at $85.79.
But with the recent excitement around upgrades, hard forks and the Digital Currency Group, this could be pretty low.
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.
Check Out: Ethereum Classic Trading Predictions
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How Can I Buy Ethereum Classic?
Ethereum Classic can be bought in four simple steps with eToro. Here’s what you need to do.
Step 1. Go to eToro’s website and click ‘Join Now’. You’ll then need to fill out the registration form.
Step 2. KYC. Next, you’ll need to provide some proof of identity and address. This is to prevent fraud and to comply with anti-money laundering laws. This may take some time.
Step 3. Make a deposit. You must do this to buy Ethereum Classic. In most cases, the minimum deposit is $200 or $50 in the USA. However, in several countries the minimum deposit is a lot higher, so make sure you check this before starting!
Step 4. Buy ETC. Go to ‘Trade Markets’ → ‘Crypto’ → ‘ETC’ (Ethereum Classic). You will then be able to choose the terms of how you buy ETC.
Woo hoo! And now you have Ethereum Classic!
If you remember anything from Pros And Cons Of Investing In Ethereum Classic, make it these key points.
- Ethereum Classic was created after a split in the Ethereum community in 2016 and is considered by some crypto enthusiasts as the real Ethereum.
- ETC is the ticker symbol of Ethereum Classic.
- Ethereum Classic has various pros, including its decentralised and immutable nature.
- Investing in ETC can be risky because of various 51% attacks.
- Though Ethereum Classic is far behind Ethereum and other smart contract players, some believe that because of coming upgrades buying ETC in 2021 is worth it.
- With a market cap of $6,362,401,269, we can say that ETC is already a millionaire maker.
- 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.
If you liked our article Pros And Cons Of Investing In Ethereum Classic, please share it with anyone who might find it interesting, too.
Still have questions on Ethereum Classic? Maybe these frequently asked questions will help?
Difference Between Ethereum And Ethereum Classic?
In short, Ethereum suffered a hack leading the project to split into two blockchains - Ethereum, a new chain where the hack never happened and Ethereum Classic, the original chain where it did.
The hack took place in 2016 and since then, a lot of changes have taken place as they develop in different ways.
What Price Was Ethereum Classic First Issued?
$0.4524 on 25th July 2016. It is also the lowest price Ethereum Classic has ever been valued at.
How High Can The Value Of Ethereum Classic Go?
Ethereum Classic could reach $9,300.16 by the end of 2033 according to Coin Price Forecast, an increase of +16,678%.
Similarly, Cryptocurrency Price Prediction estimates $6,108.35 by December 2030 which seems to agree with Coin Price Forecast’s estimate of $6,052.20 by the beginning of 2031.
Do note though that there isn’t much consensus among price forecasters as to how far Ethereum Classic can reach. Many price forecasters do not make projections for a whole decade.
There are plenty of factors that can increase or decrease ETC’s price in the coming years significantly.
Is Ethereum A Better Investment Than Ethereum Classic?
Ethereum (ETH) is considered a better investment than Ethereum Classic (ETC) because it has the potential to appreciate far more.
ETH benefits from high market volatility and high demand, as well as being the second most popular cryptocurrency.
After all, Ethereum is 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 Legit?
Yes, Ethereum Classic is legitimate and there is no legal reason you cannot own or trade it unless cryptocurrency is banned in your country.
Questions around its legitimacy usually surround its controversial creation when Ethereum split after the 51% attack and $50 million was stolen from the DAO.
For many, particularly strong Ethereum supporters, it looks very suspicious. Why would they not want to leave a hacked blockchain? Why would they be against returning what was stolen?
But let’s be clear, by participating in Ethereum Classic, you will not be doing anything wrong. However, some will see it as perhaps unethical.
Where To Store Ethereum Classic?
Store your Ethereum Classic in a wallet to keep it safe. Ethereum Classic’s website highlights several that can be used.
Web wallets: MyCrypto, MyEtherWallet, Portis, and Squarelink.
Browser integrated wallets: Brave, MetaMask, Nifty Wallet, Opera, and Saturn Wallet.
Hardware wallets: Bitski, CoolBitX, Ellipal, HTC Exodus, Ledger, Parity Signer, SafePal, Signatory Client, and Trezor.
Software wallets: ABRA, Alpha Wallet, AToken, Atomic Wallet, BTCPOP, Button Wallet, Citowise, Cobo, Coinbase Wallet, Coinomi, Cryptonator, Edge, Emerald Wallet, Ethos, eToro Wallet, Evercoin, Exodus, Guarda, HubrisOne, Huobi Wallet, Infinito Wallet, Jaxx Liberty, Mantis Wallet, Midas Protocol, Ownbit, Tokenview, Trust Wallet, Zelcore Wallet, and ZenGo.
Other wallet products: BillFodl, Blockplate, ColdTi, Crypto Key Stack, CryptoSteel, CRYPTOTAG, Hodlinox, and Steely
Do note: Ethereum Classic mentions that these wallets are made by contributors, and they cannot ensure that they are safe to use!
Whatever you do, don’t leave your ETC in a crypto exchange as the chances of it getting stolen are much higher. Always withdraw it and store it in a wallet.
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.
Why Is Ethereum Classic Going Up?
The Grayscale Ethereum Classic Trust (OTCQX: ETCG) was created in 2017 to allow people to trade Ethereum Classic on the stock market (and therefore not have to own the crypto).
It has been extremely successful. According to Grayscale, they have $651.8 million assets under management and have made 1,122.31% since its inception.
The Digital Currency Group is the parent company of Grayscale, and it highlights that major investor interest may be on the way.
When Is Ethereum Classic Fork Callisto?
Ethereum Classic’s Callisto fork was planned to take place when the 5,500,000th block was completed around the 2nd of March 2021.
According to Coin Insider, Callisto was intended to rectify issues with Ethereum Classic’s smart contracts.
Specifically, to implement a self-sustaining, self-governed and self-funded blockchain.
Will Ethereum Classic Go Up?
Ethereum Classic will likely increase in price with the magneto hard fork that is set to reduce gas fees.
According to the Ethereum Classic website, this should happen ‘around’ the 21st of July 2021. So, we could see a bump in prices around this point.
The hard fork’s correct name is ‘ECIP 1103’ (Ethereum Classic Improvement Proposal). It will also include some features from Ethereum’s Berlin upgrades, which will increase compatibility.
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, 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.
Is Now A Good Time To Buy Ethereum Classic?
Ethereum Classic appears to be trending upwards making now a great time to buy Ethereum Classic.
Buying now could also greatly pay off with the coming upgrades and hard forks on their way because if these improve how the crypto can be used, it will likely result in increased demand.