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Buying ETC branded ‘dumb’; as ether off-shoot surges 65% in a week

10:07, 29 July 2022

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An illustration of ETC logo
Some traders argue that global crackdowns on PoW would make ETC obsolete. – Photo: ShutterStock

Ethereum Classic (ETC), a 2016 off-shoot from the main Ethereum blockchain, surged 29% on Wednesday following the news that a crypto mining pool, AntPool, would invest $10m in ETC’s ecosystem.

Following the rally, ETC is up 65% over the last seven days, while BTC added a measly 3% in the same period. But not everybody was impressed with the surge, with some traders online branding buying the coin now ‘dumb’.

“Ethereum Classic (ETC) is pumping today, despite [it] being a useless chain, solely because crypto miner AntPool announced a $10m investment in ETH Classic,” a person writing under the name troythedefender wrote on a Reddit forum on Wednesday. 

ETC to US Dollar

“You must ask yourself why AntPool would announce such an investment.”

The Redditor then went on to argue that the $10m investment was likely because AntPool is the third largest Bitcoin (BTC) mining pool and 14th largest Ethereum (ETH) mining pool: “As such, they have the most to lose when Proof-of-Work (PoW) projects die out, which most inevitably will absent perhaps Bitcoin (BTC),” they wrote.

PoW is a process of mining cryptocurrencies, which takes up massive amounts of energy. That's why many governments worldwide - including the EU or New York - are proposing legislature around banning or limiting PoW.

Most main cryptocurrencies (except for BTC) already use the environmentally friendlier alternative to the PoW mechanism - Proof-of-Stake (PoS).

Ethereum Classic, however, uses the PoW mechanism. 

Meanwhile, the second biggest blockchain, Ethereum, is set to finalize its migration from PoW to PoS in a highly-anticipated update, The Merge, which should conclude on 19 September. The Merge was initially set to happen in the first quarter of 2022 but was repeatedly delayed.

Troythedefendor argued that ETH’s move to PoS “will further kill the utility of an already useless chain like ETH Classic”.

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“Without users, mining pools like AntPool that mine dead chains like ETH Classic become less profitable. So they make an announcement of a trivial investment fund to get you to buy it so they can sell their mined ETH Classic at a bit higher price,” they wrote.

“Buy away if you choose, but buyer beware because there’s only one true, functional, and highly developed Ethereum, and it doesn’t have the word classic in its name,” troythedenfender wrote.

Disagree. ETC can and will do everything ETH can do

But another debater, writing under viberama977 nickname, countered: “Disagree. ETH Classic can and will do everything ETH can do. That $10m is just the start in development.

While ETC isn't my biggest bag, it's worth adding some more. Remember, it hit $180+ last year without a talk of The Merge.”

The Merge ‘is looking more and more like in the front view mirror’

Both ETH and ETC benefited from Ethereum’s developers outlining The Merge’s new timeline earlier this month. ETH is up 37% since the update was made on 15 July, while ETC is up 166%. Meanwhile, BTC grew only 14% in that time.

Speaking to the Bankless podcast, Ethereum’s co-founder, Vitalik Buterin, said that after the previous delays, The Merge ‘is looking more and more like in the front view mirror’.

Buterin acknowledged that due to previous delays, some people might doubt The Merge will happen. “At this point, I think the only way to convince a huge number of people that it [The Merge] is going somewhere is just by going there.

“But once that happens, it’s going to change a lot of minds,” he said.

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