Why is the price of Ethereum Classic low (Is Ethereum Classic worth investing in)?

Why is the price of Ethereum Classic low?

Ethereum Classic’s price is determined by its design, but it is not fully supported by the Bitcoin network. Therefore, it adopts different consensus algorithms and mechanisms in the blockchain. Due to differences among block producers in terms of desired functionality and changes to transactions, every on-chain transfer requires more time, energy, and costs.

To address this issue, some developers have introduced a new technology solution called “ProgPoW” (Proof-Of-Work). This solution improves scalability and reduces transaction fees by creating a new proof-of-work system, allowing each node to efficiently validate transactions, making the whole process simpler, safer, and more transparent.

However, this does not mean that miners are not involved in mining. According to Ethereum’s website data, there are now over 400 validators, with the majority being anonymous individuals.

In addition, the project has introduced a feature that packages transactions into one transaction and sends it to clients of branches or other entities, providing higher efficiency and security for all users. If these nodes run on outdated modes and cannot process transactions, then there is the risk of losing money when using an old version, as it can easily view all attacked information without any evidence being promptly obtained, even by hackers.

Based on this, Ethereum co-founder Vitalik Buterin explained that many similar things have happened in the past two years: “We have begun to see more and more companies and corporations deciding to join our ecosystem.” Ethereum Classic receives so much attention because of its unique performance, especially in the blockchain field. It not only provides an efficient and fast network protocol for storing data but also allows people to access various services, from cryptocurrency exchanges to payment platforms.

Although Ethereum has many advantages, such as its throughput capacity, it also has another drawback – slow speed. Additionally, its transaction fees are high, even much higher than Bitcoin’s fees. On the other hand, it also restricts interaction between transactions, such as cross-chain bridges, which may affect the demand for ETH transactions.

Why is the price of Ethereum Classic low?

Firstly, it is because its underlying assets are cheap, making it difficult to find effective alternatives.

Secondly, it is due to the characteristics of Ethereum Classic itself. It is executed through a smart contract system rather than relying on one party’s code. It is a special type of service. Compared to traditional banking business, Ethereum has a strong weak point: trust risks.

Is Ethereum Classic worth investing in?

Editor’s Note: This article is from an internal source (ID: lianneican), written by Inner Reference, authorized to be reproduced by Odaily Star Daily.

The value of Bitcoin and Ethereum Classic lies in their scalability and security. This allows them to operate on a faster and better network and have greater market potential. But is Ethereum Classic worth investing in? Why should it be considered? First, let’s take a look at the current top five blockchain projects by market value and see the returns and future development directions of these projects. Then let’s take a look at the risk exposure of Ethereum Classic.

From a technical perspective, if Ethereum Classic can maintain long-term growth and continue to rise to the present, its price will reach around $1. However, if you haven’t seen the upcoming Ethereum 2.0 situation, you might say, “I think Ethereum Classic is likely to be completely eliminated this year or later.”

Therefore, in the current situation, whether the price trend of Ethereum Classic conforms to people’s investment logic is still unknown. However, with the rise of DeFi and the increasing demand of the Ethereum community for decentralized trading solutions, this issue seems to be more prominent. “Ethereum Classic is the first blockchain to solve the aforementioned problems, and it has attracted a great deal of attention from the market.”

Although some developers have been trying to provide alternative solutions for Ethereum, most people still don’t know what the best choice is. In fact, they have been trying to find a way to implement this idea, which allows users to use other tokens as collateral without having to spend their ETH, thereby improving their efficiency. “Ethereum Classic does indeed have a challenging market-it is undergoing a long shuffle, but in the end, it has successfully completed this task.”

On the other hand, Ethereum Classic also faces serious security vulnerabilities because it differs from many altcoins in that it issues ERC-20 tokens on the blockchain (such as SNX). Although it provides “privacy” functionality, it is not actually a true form of currency, so it is one of the only meaningful cryptocurrency assets. However, in certain cases, Ethereum Classic may not become the digital gold of any cryptocurrency. In addition, this hard fork has led to a “51% attack,” which also means that Ethereum block rewards have been reduced by about 20%. Due to this impact, the Ethereum Foundation decided to shut down ETC nodes and transfer all unregistered ETH to cold wallets, which raised a question of whether miners in the Ethereum ecosystem should sell their mining power. If miners do not want to buy more mining equipment to maintain their network, upgrades are needed to ensure the stability of the entire system. (The above analysis is compiled by insiders.)

In addition, according to official data statistics, the total locked amount of Ethereum Classic in 2019 has surpassed $2 billion (approximately $1.5 billion by the end of 2020). The total lock-up amount in 2019 accounted for nearly 40% of the Bitcoin network.