Increased response to Merge ads
Ethereum Classic is a fork of the Ethereum blockchain launched after the Ethereum blockchain was canceled and relaunched in 2016 after the DAO project was hacked, causing a split in the Ethereum community.
The Ethereum Foundation recently published a blog post titled “Mainnet Merge Announcement,” which gives the public more specific dates for The Merge upgrade. As of this writing, the merger is expected to go live September 10-20, 2022, and when that happens, Ethash proof-of-work (PoW) miners will be forced to mine another crypto supporting Ethash.
Ethash miners have several currencies to choose from, such as ravencoin (RVN), ergo (ERGO), beam (BEAM) and ethereum classic (ETC). A few days ago, the ETC hash rate hit an all-time high of 38.37 TH/s at a block height of 15,776,674. On August 30, 2022, according to data from cryptocurrencies market intelligence firm Messari, the hashrate of the ETC was 43.76 terashahes, or 43 trillion hashes per second.
The constant rise in electricity prices around the world and the declining profitability of Ethereum mining are the main concerns at the moment. Miners however found some relief due to these factors and the steady increase in ETC prices.
Also read: 3 cryptocurrencies likely to outperform ETH price thanks to Ethereum merger.
At the end of July, the controversial hard fork received an endorsement from Ethereum boss Vitalik Buterin. The Canadian programmer described it as a “good” alternative for miners. The ETC token rose significantly after Antpool CEO Leon Lv announced a $10 million investment in the chain.
Increased risk of hacking
In terms of security, a decentralized blockchain is 51% more prone to attacks than a centralized blockchain. Therefore, cryptocurrency investors have expressed concern about their assets being held on decentralized chains.
The 51% attacks work by exploiting a flaw in decentralized systems that allow users to control a chain with more than 51% of the processing power, and they occur on networks using the proof-of-work (PoW) standard. However, this requires a huge cost and very high computing power, the ETC network suffered an attack in January 2019 and August 2020.
Low-rate permissionless blockchain systems are susceptible to such attacks. Cryptocurrencies such as Bitcoin Cash ABC (BCHA), Bitcoin Cash (BCH) and Ethereum classic were the targets of these attacks.
Since Ethereum Classic is not among the largest cryptocurrencies (about 19% of market capitalization, according to CoinGecko), many cryptocurrency analysts fear that it is vulnerable to a 51% attack, in which one or more parties can one group to gain control of blockchain by managing most transaction validations.
The Merge is turning the crypto ecosystem upside down, and forcing many investors to review their positions, even for the most ignorant of how to react to these new announcements.