What happened with Ethereum $ETH and Ethereum Classic $ETC?
Previous posts: The Un-ETHical fork & A Quick DAO update
Before you read my post, you might want to read Stick a Fork in Ethereum.
As you are probably aware since you’re reading this post, there was a hard fork last week. The Hard Fork bailed out the DAO, basically it changed the DAO contract code into another contract where the only available option was to withdraw the funds. So if you had DAO, you send it to the contract and the contract makes sure it sends your ETH back.
What exactly happened with the Hard Fork and why all the drama since yesterday?
A few days before the Hard Fork, there was an announcement that some people wanted to stay on the original Ethereum chain, they didn’t want the bailout Hard Fork and they called themselves Ethereum Classic.
The Ethereum community and the Ethereum developers claimed that the majority would support the fork. However when we look at the actual data, it’s not that clear.
It also shows how much influence 1 voter had in the entire process. And don’t get me started on the way that the Ethereum developers, Vitalik included, were pushing the community to accept the Hard Fork. He and his friends had money in it, no way for him to be objective about it.
Minutes after the Hard Fork, the Pro-forkers declared victory. It was a succesful fork according to them. The majority of the hashrate went to the Pro-Fork chain, a small amount stayed on the original Ethereum Classic chain. The Ethereum $ETH chain transition at that point went quite smooth, $ETC had more difficulty with it. They started mining with the same difficulty as ETH while only have a fraction of its hashing power. Blocks came in very slow but the more blocks that came in, the faster the difficulty went down and after a day the Ethereum Classic blockchain started to run quite smooth.
Lets see who celebrated shall we? The usual suspects:
(Sidenote: Tim Swanson and Stephan “The Tool” Tual immediately block you if you point out how wrong they were, but it’s worth it)
Before the Hard fork many exchanges stated that they would follow the longest chain and some offered to withdraw the losing Ether too, including Poloniex.
The community and the exchanges had 3 days to upgrade everything to support the new Hard Fork, of course this was completely unprofessional. The Bitfinex CSO described it like this:
And Ethereum lived happily ever after right? Oh wait… Ethereum Classic was still alive, but didn’t have a real exchange, just miners and a small community…
Yesterday morning however a Poloniex tweet surprised many traders, including myself, and shocked some Ethereum investors.
Out of nowhere Ethereum Classic was really a thing.
Ethereum Classic: The Hate
At first people were laughing with it, oh a coin to just dump and get free easy money, awesome!
You have to understand that at this point most people weren’t even aware that there was a 2nd chain, the immutable one. Some people immediately saw it as a threat to bailout Ethereum.
ETC didn’t instantly dump hard, what many expected, it even went up a bit and people noticed it was about 10 times more profitable to mine than ETH, lots of miners switched. Personally I started mining the day before and I got my investment 20 fold back in less than 24 hours with 180 hours left on my miners.
Then the following message popped up:
Part of the community started cheering, yes lets kill that chain! It’s obviously illegal and highly un-ETH-ical to do such an attack. Everyone was waiting for the Ethereum developers to react to this…
Noone did, which means they endorsed this kind of behavior.
At this moment Ethereum Classic pools are still under heavey DDOS, and no response from the developers.
The hardcore Ethtards were turning to the developers for help and guidance, and it turned out some Ethereum developers actually spoke out and, in a way, supported ETC, which made the angry community even more angry.
What are the implications for the future?
Who knows. No really. From an investors and developers perspective, if both chains are the same, except for the DAO bailout, you might want to run your app on the most popular network right? Not really, the idea with Ethereum applications is that when people use the product/service linked with Ethereum, they don’t even know they are using Ethereum. So the developers might pick the cheapest one, which obviously at the point is Ethereum Classic (ETC).
The ETC team has clearly stated that they will keep the ETC chain in sync with the ETH chain that means that any future changes to the protocol will also be implemented on ETC.
From an ethical point of view ETC has a lot more value than ETH since it has showed resistance against a hard fork to bail out a (complete failure of a) project. Immutability has value, even if part of the Ethereum community is trying to convince you that’s not true.
From a scammers point of view it’s obvious, you say you sell ETH while you sell them ETC. The first human errors are also already popping up.
More exchanges are going to list ETC, Bitfinex already confirmed, Kraken also said they were looking into it. Bitmex already listed Future contracts.
I really don’t think you can talk about a succesful fork at all, the community has gone completely toxic and got very aggressive (see miner attack, but also attacks on Poloniex)
I personally think it’s great that part of the community stood its ground and is defending what they believe in, don’t forget that the Ethereum project website still says:
That’s no longer true for ETH, but it’s still true for ETC.
Try to form your own opinion about all of this. They will say that there was consensus, it wasn’t true, they will say that Bitcoin is behind all of this, that isn’true. Lots of investors are scared, and they should be.
From a traders perspective ETC is being accumulated with some big dumps, which of course are to be expected. However they just gave some whales the same control they have over ETH but at 1/20 of the price… If you’re a whale, would you dump it or accumulate so you can make more on the pump?
ETH lost most of its credibility with this failed hard fork, with its bail out, with its DAO and with its Stephan Tual. But the whales are big, ETH doesn’t follow normal market behavior.
And from now on we talk about Etherea.
The reason why many Bitcoiners are interesed in this whole experiment is to see what potential issues could pop up with a Bitcoin fork. Bitcoiners might sound negative and judgemental but then again the arrogance that many of the Ethereum developers and part of the community showed was just disgusting. Their entire PR machine was built to talk bad about Bitcoin, in every single article released by their PR agency they find a way to talk down about Bitcoin. Pride comes before the fall.
And since many think I’m just a troll, I’ll leave you all with this:
Thanks Dark Pill for your awesome photoshop skills.