“Why is Ethereum Classic going up?” is the question of the hour as ETC, which traded as low as $35.11 on April 28, surged to an all-time high of $110 on May 5. That’s an increase of 223%. The reason behind Ethereum Classic’s price jump is a mix of social media hype and the sudden spotlight on its more expensive brother, Ethereum (ETH).
Ethereum Classic is not to be confused with Ethereum. ETC is a hard fork of ETH created after the Decentralized Autonomous Organization (an Ethereum-based project) was hacked in 2016.
The Ethereum community was at odds over how to fix the breach: one group wanted to reverse the transaction, while the other wanted to continue mining the blockchain that was originally hacked. In the end, the former continued with Ethereum as its namesake, while the latter – the group with the hacked Ethereum blockchain – created a fork called Ethereum Classic.
ETH is the cash cow of the two, but as of this writing, ETC is catching up.
Why is Ethereum Classic rising?
One reason for Ethereum Classic’s price surge is the sudden spotlight on its higher-priced twin, Ethereum. Ethereum is the most popular digital asset behind only Bitcoin. ETH has been rising steadily over the years, but it experienced a sudden boost in late April.
On April 19th, Ethereum was trading at around $2,163. As of this writing, Ethereum is priced at $3,402; that’s a 57% increase in just two weeks. Ethereum’s price surge is the result of increased investor confidence in the blockchain. This may have something to do with non-fungible tokens (NFTs) and their increased visibility in mainstream media. NFTs are digital collectibles (e.g. a JPEG of digital artwork) typically running on the Ethereum blockchain. In order to mine and buy NFTs, you must first buy ETH.
Celebrities like The Weekend, Mark Cuban, Lindsay Lohan, and Eminem have all dabbled in NFTs and increased the average person’s interest in the Ethereum blockchain.
Many cryptocurrency experts are touting Ethereum as “the next new internet” because its infrastructure is used to power decentralized apps (dApps). For the uninitiated, dApps is a growing movement of apps leveraging Ethereum to disrupt business models where a single entity controls everything.
Media writer Diana Chen explained dApps in an easy-to-understand way, explaining that the internet is largely dominated by big corporations (e.g. Google) who want to monetize their activities and data. “The decentralized web represents a step away from that, and dApps are a critical part of that movement,” she said. The main benefit of dApps is that they eliminate intermediaries and centralized authorities.
Decentralized apps are built from Ethereum “smart contracts,” which Coindesk says are codes that execute contract terms automatically, so users don’t have to rely on third parties to enforce the rules.
As Ethereum demonstrates its impressive utility, more and more people are turning their attention to Ethereum Classic, especially as NFTs become more common. It’s cheaper, so it has more room to grow.
When the masses start to understand that an $ETC (Ethereum Classic) is basically the same as an $ETH and can be bought on all major exchanges including #robinhood for basically 70 times cheaper, we all know what will happen will: $ ETC will explode 🚀🚀🚀1. May 2021
While many are distracted by Dogecoin and its fast-paced journey to the moon, perhaps the masses shouldn’t overlook ETC. With NFTs, smart contracts, and dApps on the scene, Ethereum Classic certainly has a lot of potential.
Note: This is not financial advice. Digital assets are extremely volatile, so buy at your own risk.
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