Ethereum Classic cryptocurrency guide advises where to buy and how to buy Ethereum Classic. This guide also contains the markets, value, trading, investing, buying, selling, transactions, blockchain, mining, technology, advantages, risks, history, legislation, regulation, security, payment, networks and many other interesting facts about Ethereum Classic as well its status in the world of cryptocurrencies.
Ethereum Classic, Wednesday, 2018-05-09
- 1 What Is Ethereum Classic?
- 2 Beginner's Guide to Ethereum Classic
- 3 Where and How to Buy Ethereum Classic?
- 4 Ethereum Classic Markets
- 5 Where to Spend or Use Ethereum Classic?
- 6 How Does Ethereum Classic Work?
- 7 Ethereum Classic Regulation
- 8 Is Ethereum Classic Secure?
- 9 History of Ethereum Classic
- 10 Ethereum Classic Videos and Tutorials
- 11 See Also
What Is Ethereum Classic?
Ethereum Classic is an open-source and public blockchain based computing platform that features smart contract functionality. It provides users with a Turing complete virtual-machine that helps to execute scripts with globally distributed nodes in its network.
The cryptocurrency also features a value token referred as Ethereum Classic coins. The tokens can be stored in wallets and traded in the cryptocurrency exchanges. They are also used as the main asset for transferring value or sending cash.
To make trading, operations in the network, running of smart contracts and decentralized applications, Ethereum Classic uses Gas as a pricing mechanism. Gas helps in preventing scams on the Ethereum Classic network as well as allocating resources proportionately as an incentive to nodes.
How Ethereum Classic came about
Ethereum classic was created as a hard fork of Ethereum. To make this clearer, this guide goes back to the beginning. It will take a closer look at the events that brought about the fork (division) of Ethereum resulting in the formation of Ethereum Classic (ETC) and Ethereum.
- The formation of DAO (Decentralized Autonomous Organizations)
- Ethereum (the original blockchain network) was formed in July of 2015. The entire Ethereum system was crafted to operate on the premise of smart contracts. Smart contracts define how things get to be done in the Ethereum system. Call it Ethereum ecosystem because it brings together many stakeholders.
- DAO was one of the most complex smart contracts that were aimed at revolutionizing the Ethereum system. It was aimed at being a decentralized venture capital fund that would fund DAPPS (decentralized applications) in the ecosystem.
- To get approved and created, the experts with inherent knowledge of the Ethereum Core operations would present the idea and get approval from about 30% of the users before obtaining the required funds.
- The creators operated on a high level of flexibility, control, and transparency. This mode of operation saw over $150 million raised in just 28 days of the Crowdsale.
- The DAO attack and the difficult decision to split Ethereum
- A short while after the successful crowdfunding, an attacker created a replica of the DAO and siphoned away about $50 million. The impact of the attack was catastrophic. The price of Ether nosedived from $20 to $13. The community referred to it as the DAO child attack.
- Interestingly, even though the $50 million that was siphoned, it was still sitting pretty in the Child DAO. This is because the smart contract stated that no withdrawals could be executed from the DAO before 28 days were over. With this reality, the Ethereum community was faced with a hard decision to make. The options included.
- One, to Relax and do nothing. This would mean that the attacker was more advanced and kill the confidence of the Ethereum supporters in the development team. It could also have spelt doom for the cryptocurrency.
- Two, to Implement a soft fork. What exactly is a soft fork? A soft fork is an update on a cryptocurrency network that is backward compatible. This implies that the update you run will be easily compatible with the previous versions. However, implementing a soft fork would give the attacker the chance to run around the system. Such an attacker could flood the network with transactions that interact with the DAO and allow miners to run endless complex computational for very little to no gas price. The attacker could even trick the miners to solve malicious computation puzzles by setting a high gas price. What this implied was that a soft fork was no good. The option left was only one; going or the hard fork.
- Three, Run a hard fork. How does a hard fork operate? A hard fork, like a primary fork is a form of an update. However, it differs from the soft fork in that it is not backward compatible. This means that once you implement the update (hard fork), there is no going back. All the versions you had in the network earlier will not be compatible with the new update. If you fail to upgrade to the new version, it will be impossible to access the system.
In the Ethereum network, the hard fork would work by branching from the main blockchain at the point just before the DAO attack. To be specific, it was block 1,920,000. Immediately after the fork, the section of the chain up to block 1,920,000 separated and formed the old chain (referred as Ethereum Classic) while the newer chain would retain the original name, Ethereum.
Most of those who against the hard fork opted to stay in Ethereum Classic while those who supported it such as founders Vitalik Buterin and Wood Gavin went with Ethereum.
Beginner's Guide to Ethereum Classic
Are you interested in joining Ethereum Classic? The opinion about the cryptocurrency out there is very diverse. Some people are of the view that the cryptocurrency has been stuck in the old ways and its growth has been stunted. But a different group appears confident that Ethereum Classic is the best way to grow over time. Which is the best way to go?
The recent growth of Ethereum Classic value and emerging interest especially from top companies has made some people rethink their position about it. It has also emerged that other people who had invested in Bitcoin but want more potential cryptocurrencies are offloading to Ethereum Classic.
This guide takes a comprehensive look at Ethereum Classic to establish everything that you need to know about it. Do not follow unverified options that are given out there. Get the facts, clear all the doubts, and have every question answered professionally right here in this guide.
The guide helps you to understand what is Ethereum Classic, how to buy, where to buy, its value, and possibilities of growing into a major payment network. It also outlines other things including Ethereum Classic regulation, taxes, history, security, advantages, and associated risks among others. Welcome to learn all that you need to know about Ethereum Classic.
Where and How to Buy Ethereum Classic?
When people hear of Ethereum Classic and its many benefits, one question that runs through their minds is how to get the native coins. There are several ways to get hold of the highly demanded Ethereum Classic coins. One, you can mine the coins. Two, you can get someone with the coins to send them to you. Three, you can buy from the exchanges.
The third method is the easiest, fastest, and direct option out there. However, how do you go about buying Ethereum Classic? Here are the main steps of getting Ethereum Classic.
- Start by acquiring an appropriate cryptocurrency wallet. This is very important because it is the location that will hold your Ethereum Classic coins after the transaction is over. Good examples include Ledger Nano S and Jaxx.
- Look for a cryptocurrency exchange that lists Ethereum Classic. Cryptocurrency trading exchanges are markets that trade crypto coins. You can look for an exchange that allows traders to buy the native Ethereum Classic coins using fiat currencies or other cryptos. Great examples of such exchanges include Coinbase, Poloniex, and CEX.io.
- Note that buying from an exchange will require you to open trading accounts and to confirm the details using proof of location and phone number. In other cases, you might be required to upload a passport or full-size photo to start trading.
- Consider buying directly from those who have the coins. Since cryptocurrencies debuted in 2009, many people have formed clubs that help them come together to learn, analyze, and even buy cryptocurrencies. Such clubs also allow those with the native coins to sell to willing buyers. A great example of such clubs is the LocalBitcoins.com. Note that even in such clubs, you will still need to have a cryptocurrency wallet.
- Buy Ethereum from cryptocurrency ATMs. When cryptocurrencies debuted in 2009, it was impossible to imagine a situation where one could simply enter into a booth and buy the preferred coins. Now, this is possible. Top cities such as Seoul, Chicago, and Tokyo where there are a lot of crypto-related activities have seen mushrooming of cryptocurrency ATMs. Though most ATMs only offer direct Bitcoin purchases, you can still start there and then exchange the BTC to the preferred Ethereum Classic coins.
Ethereum Classic Wallet
If you are planning to join the Ethereum Classic network, the first thing you need to acquire is a cryptocurrency wallet. Just like the conventional pocket wallet that holds your notes, the cryptocurrency wallet holds your coins. But the crypto wallet is digital. This implies that it can only hold the digital coins without you having them physically.
An Ethereum Classic wallet is the location that holds your ETC coins after a purchase has been completed or a successful mining operation. At this point, it is crucial to demystify the wallet even further. The definition that a cryptocurrency wallet is a location for holding the digital coins is actually a misconception. In reality, the crypto coins such as ETC tokens are never minted and never leave the native network. Therefore, they cannot be stored anywhere outside the network.
What the cryptocurrency wallets store is a set of codes referred as private keys and public keys. The private keys are special identifier codes that point at the coins you hold in the Ethereum Classic network. The private keys should never be shared.
The public keys, unlike the private keys, help to identify your wallet. This means that users who want to make payment to you in ETC only need to have the right public keys (address). When sending cash on the Ethereum Classic network, you provide the public keys to the nodes spread in the network so that they can confirm transactions in the mining process. Here are the main Ethereum Classic wallets on the market today.
- Ledger Nano S (Hardware wallet)
- This is one of the leading cryptocurrency wallets in the market today. As a hardware wallet, Ledger Nano S has won the tag as the most secure wallet out there. The wallet is finger-sized hardware that allows you to take full control of the transactions and lower the risk of loss with a huge margin.
- The wallet generates the seed phrase that you should use to recover the keys in the case of damage or loss. When confirming transactions, the hardware must connect to the Ethereum Classic network using applications such as Classic Ethereum Wallet. To guarantee you of extra security, the hardware has a physical button that you must press to release the ETC when making payment. This means that even if someone manages to break into the wallet, it will be an uphill task to siphon your coins without having physical aces of the wallet.
- Jaxx (mobile wallet)
- The Jaxx is a mobile wallet that runs like the standard app. The wallet is preferred by many people because it supports many cryptocurrencies including Ethereum Classic. It is a great option for people who want to link to their crypto coins or make transactions on the go.
- The biggest problem with Jaxx is that many experts recommend it only for short-term storage of Ethereum Classic. Users have been reporting issues with mnemonic seed recovery. This means that recovering your coins after a loss is in most of the cases is very difficult.
- Exodus (desktop wallet)
- Exodus wallet was founded in 2016 as a storage facility for Bitcoin. However, it has grown to support other assets such Ethereum and Ethereum Classic. As a desktop wallet, you are required to download from the main home page and install in your computer to access the Ethereum Classic network. The private keys and public keys are stored in the wallet on the desktop. This implies that you have absolute control over them. It is, therefore, crucial to generate the private seed and store it away from the main computer.
- To make trading easier, Exodus comes with ShapeShift inbuilt in it. ShapeShift is one of the leading trading platforms in the market today. This means that converting Ethereum Classic to other assets or trading them is only a step away. To address the recent concerns of loss, the Exodus team backs up all the wallets for the users and provides them with a secure link to reactivate them in the case of a loss.
- The Ethercore Parity
- Just like the Ethereum has its Ethereum Parity wallet, there is an Ethereum Classic version referred as Ethercore Parity. This wallet was developed to support both Ethereum and Ethereum Classic. The wallet was designed to be the fastest and lightest options for Ethereum Classic users.
- The good thing about the wallet is that it allows you to run as a full node on the Ethereum Classic ecosystem. You can manage the Ethereum classic accounts, Ethereum Tokens, create and even register own tokens.
Where to Buy Ethereum Classic with Credit Card?
Credit cards are some of the most used methods of payment in the globe today. Because cards are accepted as a form of payment in most online and conventional marketplaces, no one wants to stay without them. Now, it is also possible to buy cryptocurrencies with credit cards. Here is an account on how to buy Ethereum Classic with credit cards.
- Start by acquiring an appropriate wallet. This is the location that will hold the ETC coins after the purchase.
- Look for an appropriate cryptocurrency trading platform. These are platforms such as exchanges and brokerages that sell Ethereum Classic and other crypto assets. Great examples include CEX.io, Kraken, and Coinbase.
- Open a trading account at the selected exchange. In many cases, you will be required to open a trading account and confirm its details using a personal phone number, proof of address, and a recent photo.
- Navigate to the Buy Digital Assets section on the dashboard and select the number of ETC coins you want to buy. Then, select pay with credit card.
Note that this process will load the ETC coins to the trading platform's account. Therefore, you will need to move them to your cryptocurrency wallet.
Where to Buy Ethereum Classic with PayPal?
There is no direct method of buying ETC coins with PayPal. PayPal is a payment network and, therefore, a direct competitor with cryptocurrencies. The company does everything possible to discourage its users from making payment to crypto networks or using their networks.
If your cash is in a PayPal account, the best way to buy ETC coins is offloading into a bank account or credit card. A significant number of markets accepts these two methods.
How to Buy Ethereum Classic with Wire Transfer?
While the journey towards a cashless society is picking pace, one interesting observation is that nobody is ready to operate without a bank account. The bank is one of the most trusted institutions in the globe today. Many people trust their banks to process their salaries, savings and even advise on investments. Now, wire transfer has made it possible to also pay for ETC coins. Here is the procedure to follow.
- Start by acquiring an appropriate Ethereum Classic wallet.
- Identify the preferred cryptocurrency trading platform. Great examples include Kraken, Coinbase, Bitsquare, and CEX.io.
- Open a trading account with the selected exchange and complete the process by purchasing ETC coins with a wire transfer. Note that the process might take a couple of days depending on the selected exchange, your bank, and country.
Where to Sell and Trade Ethereum Classic?
After joining the Ethereum Classic network, it is important to learn all the tricks of making higher profits. For example, you can hold crypto coins waiting for them to gain value over time. However, the most profitable option is trading the Ethereum Classic.
To trade and sell Ethereum Classic, you need the right platforms. These are trading markets that bring together buyers and sellers. The trading platforms operate just like the standard forex markets but use cryptocurrencies instead of fiat currencies. Some top exchanges to consider include Poloniex, Coinbase, Bittrex, and Binance.
It is important to appreciate that local laws govern cryptocurrency selling and trading platforms. This means that you will be required to run a trading account and verify them with personal information. Some ask users to verify the accounts using proof of location, date of birth, and even phone number.
It is important to appreciate that your Ethereum Classic coins will be an easier target the moment they are moved to the trading platforms. It is not uncommon to hear that cryptocurrencies have been hacked and a lot of coins siphoned away. To be sure of getting the best Ethereum trading and selling platform, here are some useful tips to follow.
- Only go for the exchange that supports lot of cryptos. This assures you of always having a profitable pair to jump to if the current one is not desirable.
- Look for the platform that has a good reputation in the cryptocurrency community. If other traders have a lot of positive feedback, the chances are that even you will also greatly enjoy using the platform.
- It is advisable to pick the platform that has low trading fees. If a trading platform has affordable charges, it implies that bulk of the profits will not go to paying the fees.
How Much Are the Transaction Fees of Ethereum Classic?
The promise of every cryptocurrency entering the market is lowering the cost of transactions in its network. Ethereum Classic also gave this promise to its clients and has not disappointed. The average cost of transactions in ETC by early 2018 was $0.02. This is very low compared to the sister network, Ethereum, that charged an average of $1.7 in the same time. Other networks such as Bitcoin and Bitcoin Cash are even more expensive to use.
Ethereum Classic Markets
Cryptocurrency markets are special trading platforms created to help facilitate trading between cryptos. The markets are driven by demand, supply, and market dynamics. Unlike the cryptocurrency networks that are operated without legal frameworks, the markets have to adhere to local jurisdictions’ requirements. Like the forex trading markets, the crypto platforms require users to verify their identities. Some markets even countercheck the same details with government agencies to ensure that all traders are known and legit. Here are the main Ethereum Classic trading markets.
- While Binance is one of the newest cryptocurrency markets having entered the crypto market only in mid-2017, it has grown to become one of the leading trading platforms around the globe. The market is based in China, and its popularity has been rising rapidly. Part of this is driven by the native Binance blockchain token called BNB.
- Cryptocurrency traders prefer using Binance because it lists very many cryptocurrencies. If you find one trading pair is not preferable, there will always be an alternative because of a large number of listed cryptos. The trading market also has a very small trading fee. By charging users only 0.1% of their trading volume, it means that Binance is one of the cheapest in the market.
- The main shortcoming of using Binance is that it only allows cryptocurrency to cryptocurrency trading. This implies that those with cash need to start from an alternative platform that allows payment using cash.
- Poloniex is a cryptocurrency trading platform headquartered in Delaware, United States. Though it was launched in 2014, it has become one of the leading cryptocurrency markets because it lists a lot of cryptocurrencies. This means that you will always have a more profitable option to jump to in the market.
- Unlike other markets, Poloniex is very committed to securing users' assets. It achieves this by moving most of the coins to cold storage and only leaving about 30% to facilitate trading. This means that in the event of an attack, only 30% would be at risk.
- The trading fee at Poloniex is subtle. It depends on the trading volume. The higher the volume you move at the market, the lower the charges. The highest fee at the platform is 0.25% that is charged on the taker. This is the highest fee charged on trading volumes equivalent to or less than 600 Bitcoins worth of ETC. If you trade more, the cost goes down.
- Though Poloniex if one of the most advanced trading platforms out there, many users consider it limiting for not allowing users to make payments with fiat currencies. This means you can only buy ETC using other cryptocurrencies. For those with fiat or cash, it implies starting from other cryptocurrencies exchanges that accept cash.
- Changelly market has become one of the leading platforms because of minimum verification requirements. The platform was founded by MinerGate Group in 2015 with the head quarters in the Prague, Czech Republic. The MinerGate Group also founded the MinerGate mining pool that aimed to help people consolidate hashing power to increase the chances of confirming transactions.
- To make trading easy, direct and profitable, Changelly uses advanced trading bots that help to integrate it with other top platforms such as Poloniex and Coinbase. This ensures that the platform generates advanced metrics to help users know when to make moves and optimize profitability.
- One issue when trading in Changelly is its high trading fees. The platform charges users 0.5% of the traded volume every time they use the platform. For traders moving very large quantities of ETC coins, the cost can be too high.
Value of Ethereum Classic
When Ethereum Classic and Ethereum split, there was a feeling that the momentum of the second most valuable cryptocurrency by 2016 was headed in the wrong direction. Immediately after DAO attack, the value of Ethereum Classic was very low. Many people held the feeling that the big weights had moved on to the Ethereum and those left were only holding unto an immobile machine. However, the coin value has proven the critiques wrong.
In mid-2016, immediately after the DAO attack, the value of Ethereum Classic was slightly less than $2. However, it has grown progressively to reach a high of $35 on February of 2018. This is a whopping growth of more than 1500%. This is impressive.
While many people are fast to compare Ethereum Classic to Ethereum whose price has skyrocketed especially in 2017 and early 2018, the truth is that ETC has been equally profitable. The development team has also become more aggressive and outlined a raft of new features that could make the cryptocurrency one of the top options in the market in the coming years.
However, the future growth of the cryptocurrency in the highly competitive niche depends on how it will handle other challenges that wait on the way. For example, the Ethereum Classic team must demonstrate zeal to remain progressive through highly advanced features. It must also work extra hard to keep off attacks that can further taint its image.
Is It Profitable to Invest in Ethereum Classic?
Yes, investing in Ethereum Classic is profitable. From 2016 to early 2018, investors in the network enjoyed over 1500% growth in value and profits. If the Ethereum Classic is able to maintain this trend, you can expect to continue reaping even higher profits in the coming years.
Despite this desirable growth in profitability, it is important to note that Ethereum Classic is also competing against other giants including the sister cryptocurrency, Ethereum. The fast growth of these competing crypto coins such as Ethereum, Bitcoin, and Bitcoin Cash means that Ethereum Classic has a lot of work to do. It must demonstrate to investors that it is better compared to others. The growth posted between 2016 and 2018 has started building the Ethereum Classic community and could make it the next big crypto in the market.
As a platform that runs on the platform of smart contracts, Ethereum Classic has in its bag a lot of potential from all the enterprises that use its system to accelerate growth. Every business that comes to Ethereum Classic to implement the smart contract or operationalize its decentralized app uses ETC for payment. It might be a matter of time before these businesses start growing and catapult the enterprise into a top payment network.
While there is no doubt that Ethereum Classic can become a great payment network, the success can only be realized if it counters the opponents with vitality. Here are some unique things Ethereum Classic must achieve to become a major payment network.
- It needs to bring more multinationals into its ecosystem to win the trust of more users.
- The development team must demonstrate the commitment to make the network better. For example, it should craft a way of shifting from Proof-of-Work consensus model to more advanced algorithms.
- The development team should work on netting more payment institutions to convince them to use its system. This is the model employed by Ripple to draw banks and payment services enterprises.
- Ethereum Classic must work hard to fight the tag that it is the old network compared to its sister network Ethereum. This will make it more appealing especially to the younger investors who want to be associated with more progressive networks.
Where to Spend or Use Ethereum Classic?
The acceptability of a cryptocurrency can be assessed based on the number of outlets that accept its native coins. Though Bitcoin is the most accepted crypto asset out there, others such as Ethereum Classic are making inroads, though at a very slow pace. Here are the main places where you can spend Ethereum Classic.
- Living Room of Satoshi.
Can Ethereum Classic Grow to Become a Major Payment Network?
The main aim of most cryptocurrencies is to grow and become top payments options across the globe. Ethereum Classic can also grow to become a major payment network. Because of its current low price in comparison to other networks, the price of sending money is very low. The average cost of transactions at the Ethereum Classic network was $0.02 in early 2018. This is very low compared to Bitcoin that charges $10 or Ethereum $1.7 during the same period.
The value of Ethereum Classic has been growing steadily. While there is a significant portion of people who have argued that it should target faster growth, the reality is that the progress is positive. This growing community is likely to continue using the network and catapult ETC to the top as a major payment network.
The Ethereum Classic employs smart contracts and decentralized applications. These options draw more businesses that want to implement smart contracts or run decentralized applications. Because the operation has to be linked to the main Ethereum Classic ecosystem, it is likely to grow with time as more businesses join.
How Does Ethereum Classic Work?
When Ethereum Classic was created, the community assembled immediately and published what they referred as the Declaration of Independence. This document indicated that they were not happy with the way Ethereum Foundation handled the DAO hack. It also outlined the future of the cryptocurrency. The operations of Ethereum Classic can be classified into four key components.
- The Ethereum Classic blockchain.
- This is a public ledger that comprises of all the confirmed transactions that take place in the Ethereum Classic network. The system operates on the basis of blockchain technology guided by the Proof-of-Work algorithm. This means that every transaction has to be confirmed by a series of nodes before being added to the public ledger.
- The smart contracts.
- When you take a closer look at the Ethereum Classic system, it becomes apparent that the primary feature is the smart contracts. These are computer programs that control the transfer of digital assets between parties in the Ethereum Classic system. Note that as a contract, specific conditions must be pre-set and met before the smart contract can be executed.
- The Ethereum Classic ecosystem operates as a host of other software. This is done by allowing them to create and operate their own smart contracts pegged on the Classic Ethereum. Note that the content of the smart contracts are not dictated by Ethereum Classic. Therefore, you can sell other tokens based on separate conditions as far as you capture and implement them on the Ethereum Classic system. Some great examples of entities that have run smart contracts on the Ethereum Classic network include BitTicket and Original My.
- The Ethereum Classic Tokens (ETC)
- The Ethereum Classic tokens are the native assets on the ecosystem. They are also the main method of payment in the network, the tool of incentivizing good code building, and an investment. The original idea of crafting Ethereum, and now in the application at Ethereum Classic was that the tokens should be limited.
- However, the idea of having a finite number of tokens opens one key problem; the price of the tokens would always be headed down. To address this issue, ETC implemented the ECIP 1017 monetary price change. The mandate required that the block reward is brought down from 5 ETC to 4 ETC by 12th December of 2017. This trend is expected to continue until the block reward becomes zero by approximately 2025.
Does Ethereum Classic Use Blockchain Technology?
Ethereum Classic operates on the blockchain technology. This is a decentralized public ledger that keeps growing as more blocks get added with time. The good thing about the blockchain technology is that the public ledger runs as a distributed model with no single point of control or failure. Ethereum Classic is a trustless and censorship-free ecosystem that has been demonstrated to be immune to manipulation.
Every transaction in the Ethereum Classic is packaged into blocks that are captured and added permanently to the public ledger. The Ethereum Classic blockchain uses advanced consensus that requires the nodes spread in the network have to agree on the correct block to add into the system. This implies that the network is self-reconciling and, users can be assured that it is always accurate.
Ethereum Classic employs Proof-of-Work algorithm which means that participants called miners must validate blocks before they are added to the public ledger. The miners that confirm these transactions must have ample hashing power to demonstrate that they have invested in the network. They also have to get down to work by competing against others spread in the network in solving complex mathematical puzzles. The user (miner) who manages to get the right answer to the mathematical puzzle is rewarded with some ETC.
While Ethereum has indicated that it is shifting to Proof-of-Stake, the Ethereum Classis has indicated that it will stick with Proof-of-Work. The development team at Ethereum Classic has expressed the need to keep the cryptocurrency stable as opposed to shifting to a new algorithm that is very complex.
Mining Ethereum Classic
Mining is the process of confirming transactions and adding new blocks to a cryptocurrency network for a reward. At Ethereum Classic system, mining is also used for consensus building especially on major decisions. The reward given to miners is the main method employed to release new coins into the market.
Because Ethereum Classic uses Proof-of-Work algorithm, the process of mining requires two things; ample hashing power (computing power) and ability to solve complex puzzles generated by the network. Here are the two main methods of mining the Ethereum Classic network.
- Mining Ethereum Classic on your own. To start mining the Ethereum Classic network, you should start by assembling the right mining hardware. You will need a GPU and at least 4GB of RAM. You will also need to have an Ethereum Classic mining account that makes you a node in the system and a GPU Miner. Every block you mine on the network is rewarded with 4 ETC.
- Mining ETC as a pool. In many cases, mining ETC alone can be lengthy and unfruitful. While it is still possible, the number of coins you can make is very small. A better method to use is joining a mining pool. These are organizations that bring together miners to consolidate their mining power. The only challenge of using mining pools is that the mined coins will be shared by all the members.
What Are the Advantages of Ethereum Classic?
When people join cryptocurrency networks, the main aim is seeing their investments grow the same way that Bitcoin skyrocketed especially between 2016 and early 2018. The Ethereum network is indeed promising more. Here are the main benefits to anticipate after joining the Ethereum network.
- Guarantee users of investing and trading without third-party seizures
- When Ethereum was launched, it was seen by many people as a great step towards offering completely anonymous transactions. This means that all the transactions are free from third party seizures. Now, you can trade without worrying that court cases can result to freezing of your Ethereum Classic accounts.
- The only way to send cash and own the network
- If you use the bank to send cash, the transaction makes you passive. This implies that the bank system helps you until the transaction is completed. Now, people who join the Ethereum Classic network are able to send cash and own the network. The Proof-of-Work algorithm used in Ethereum Classic ensures that all the nodes spread in the system come to a consensus before major decisions are taken.
- Ethereum Classic provides a cheap way of sending the value on a peer2peer basis
- As a decentralized cryptocurrency, Ethereum Classic provides an alternative method of sending cash faster compared to banks. Because both the sender and receiver are in the network, the network allows users to bypass profit-seeking institutions such as banks. This means that transactions are easy, direct, and cheaper. The transactions are even cheaper at Ethereum Classic that other top networks such as Bitcoin and Bitcoin Cash.
- Ethereum offers multiple ways to earn from the network
- Ethereum Classic, unlike Bitcoin, provides users with multiple methods of making a lot of returns from the network. You can trade Ethereum Classic on the exchanges, hold the native coins awaiting the value to grow, or grow the business using decentralized applications.
- Ethereum Classic provides users with an opportunity to craft their own blockchain networks
- One unique benefit of Ethereum Classic is that it allows users to use the core code in developing their own blockchains. This means that you do not simply have to look at the fast-growing crypto networks and keep wondering how to develop or own one. Ethereum Classic makes this possible.
- The best way to enjoy greater control and freedom over your resources
- If you have cash in a bank account, the truth is that there are so many limitations. For example, you cannot make transactions at night, weekends and public holidays. It is also impossible to make large withdrawals without giving prior notice. However, the Ethereum Classic network gives the user absolute control over his savings and finances. You can send or receive payments any time irrespective of whether it is at night, weekend or public holidays.
What Are the Risks of Ethereum Classic?
Since the complex and bitter process of the hard fork that borne the Ethereum Classic, things have never been the same again. Even though the two blockchains have so much in common, they are very different and carry a number of risks. Here are the main risks of Ethereum Classic.
- The updates implemented in Ethereum are not backward compatible. This means that progressive updates that have been coming in the Ethereum network can only be enjoyed in the Ethereum network and not Ethereum Classic. One great example of this is the upcoming shift from Proof-of-Work consensus in the Ethereum system to Proof-of-Stake.
- Many people in the Ethereum classic system felt that a big portion of them had been taken away. At a time that every investor in the Ethereum network expected to move rapidly and enjoy growth similar to that reported in the Bitcoin network, the hard fork was implemented. The bitter thing about it is that the big names such as Vitalik Buterin moved away from the Ethereum Classic to the Ethereum blockchain.
- Ever since the DAO attack was executed, many investors especially those new to cryptocurrencies have always taken the Ethereum Classic with suspicion. Many are those who opt for the networks that do not have a hacking history.
- The risk of further attacks on the network. Just like the Ethereum network was attacked during the DAO attack, the danger of more attacks still looms. The cybercriminals are always looking for new lines of weaknesses to exploit and hit again.
- The threat of the looming regulations. The looming regulations greatly threaten every cryptocurrency out there. Because of the threat that many governments face from the fast growth of cryptocurrencies, the chances are that they will pass harsh laws that could limit cryptocurrencies growth.
- The threat from more advanced cryptocurrencies. The field of cryptocurrencies is advancing rather fast. Call it supersonic speed. Even before a new crypto has been exhaustively reviewed, several others will have joined the market. The risk is that newer cryptocurrencies are more advanced and could make Ethereum Classic lose the appeal and push down its value.
What Happens if Ethereum Classic Gets Lost?
If you are new to cryptocurrencies, it is important to appreciate the risk of loss always looms. The network can be hacked, ETC siphoned away, or you could send the coins to the wrong address. However, many people have been asking the question; what happens when Ethereum Classic gets lost?
One thing that should be clear at this point is that ETC coins do not leave the native network. This means that even if you lose the coins, they are still in the network. Therefore, what happens to your Ethereum Classic after a loss depends on the nature of such loss?
- Loss through hacking or sending to the wrong address. If you lost ETC through hacking or sending to the wrong address, it simply means that the coins have changed hands. Though they are still in the network, the coins have a new owner. Note that the transactions cannot be reversed.
- Loss through forgetting the private keys or damage to the wallet. If you lost Ethereum Classic because you cannot remember the private keys or the wallet has been deleted/damaged, the coins are still yours and in the network. However, they are idle awaiting you to key in the right private keys and wallet. If you fail to get the right wallet or private keys, the tokens will forever remain dormant.
Ethereum Classic Regulation
The entry of cryptocurrencies into the globe threw many governments into confusion. Suddenly, a new form of wild authority had sneaked and was threatening to compromise how every system, especially in the finance niche, operated. This is the reason most administrations are pushing very hard to pass legislation that can help to control development and application of cryptocurrencies such as Ethereum Classic.
Despite this huge threat, it is important to note that no jurisdiction has passed a piece of legislation to regulate the use of cryptocurrencies such as Ethereum Classic by early 2018. This is seen by many as a contradiction. Why would administrations that are so aggrieved fail to pass legislation? To answer this question, it is important to check at how these cryptocurrencies are causing disruptions to governments.
They facilitate peer2peer sending of cash which implies that centralized institutions such as banks and central banks are bypassed. Some experts in cryptocurrencies prefer to call it being sidelined.
- Because the operations of cryptocurrencies are based on a peer-to-peer model, it means that bypassed institutions no longer have a place to draw profits from or advance their businesses. They are, therefore, on a route to rapid decline.
- Because most cryptocurrencies are anonymous, their users can hide on the networks and avoid authorities especially those involved with paying taxes.
- The cryptocurrencies have created a new line of investment that the governments have no control to. Many people are now offloading their cash from conventional channels such as shares, real estates, and other areas to invest in the high return cryptocurrencies such as Ethereum Classic.
With these concerns and many others, it is true to say that there is no administration that is sitting pretty as cryptocurrencies advance. In China, the administration started by banning ICOs (Initial Coin Offerings) and freezing crypto exchanges that were thought to support crypto asset trading. However, the country still lacks a legal framework to guide operations of the cryptocurrencies.
It has emerged that drawing and passing cryptocurrency regulations is a mammoth task. Some experts are referring it as a near impossible thing. Here are some of the main reasons why it is becoming very difficult to pass cryptocurrency regulations.
- The networks do not belong to any one party. Unlike with banks and other financial institutions that are formed by known persons/ group of persons, the cryptocurrencies belong to the users spread across the globe. This means that there is no single person or entity to target. Even if you pass legislation that limits application in one country, the network will still blossom because of users in other countries.
- The legislation focus has taken a political angle. Every country that makes the first move to pass laws on cryptocurrency is encountering serious opposition on the political front. In China, the opposition has strongly opposed the laws proposed by the government on regulating cryptocurrencies.
- The cryptocurrency technologies are unfolding rather fast. It is actually faster than many government officials can synthesize. Before a new cryptocurrency's features have been explored exhaustively, a new type of blockchain technology is already in the offing.
- Cryptocurrencies such as Ethereum Classic have come with the best solutions to handle issues related to big data. This means that many governments are unwilling to limit the application of cryptocurrencies so that they can also benefit from them.
Even as the complexities surrounding cryptocurrencies regulation continue to grow, it is important to appreciate that the laws will finally come. Starting with Russia, many countries have already kick-started the process of drawing laws that will ultimately guide cryptocurrencies. Therefore, it is essential to be prepared for them. No matter how long it will take, the laws will finally be installed.
Is Ethereum Classic Legal?
Most jurisdictions have watched cryptocurrencies grow like wildfire as they slowly strategize on how to tame them. It is a fight that could easily get out of hand. Look at it this way. Cryptocurrencies such as Ethereum Classic are offering a new way of sending cash bypassing the governments and centralized institutions. This denies administrations the ability to control inflation, investment, taxes, and the bulk of other important things. Despite this, cryptocurrencies such as Ethereum Classic remain legal in most of the countries. Here is a closer look at the legality of Ethereum based on individual jurisdictions.
- When cryptocurrencies debuted, Russia indicated it was unwilling to regulate them. In September of 2017, the Russian Federation Central Bank indicated it was against the idea of passing regulations to control cryptocurrencies. It was categorical that passing such laws was tantamount to equating them to fiat currencies. However, this focus was dropped at the close of the year when the government gave a different stand.
- Alexei Moiseev, the Deputy Finance minister in Russia, indicated that they were considering making payments in cryptocurrencies illegal. In a position that drew support from the president, Vladimir Putin, the finance ministry indicated that there were gaps in the current law that made it impossible to tell whether cryptocurrencies are legal or not. This led the Central Bank jumping into action to start working on a draft law that would guide cryptocurrencies in Russia.
- On January 25th of 2018, a draft law on digital financial assets was published. According to this draft, the government intends to define what cryptocurrency tokens are, define the ICO (Initial Coin Offering) procedures, and establish the legal framework for mining and trading the exchanges.
- Note that this draft is only in the early stages. Therefore, Ethereum Classic remains legal in the country. It is important to point that the opposition has mounted strong resistance to the bill. One of the leading competitors in the 2018 Presidential race, Boris Titov, explained that the country should adopt a more accommodative cryptocurrency legal framework.
2) The European Union.
- The EU, just like Russia, has been giving mixed signals when it comes to cryptocurrencies regulation. Ethereum Classic is still legal in the EU because there is no regulation drawn to guide cryptocurrency operations. This means that individual countries are left to craft local laws guiding cryptocurrencies.
- The EU is working on its own a blockchain that will help it understand how the technology works and the best way to apply it. The main concern for the European Union is anonymity. The EU legislators have indicated that they want to end anonymity in cryptocurrencies in order eliminate the threat of tax evasion and money-laundering. The EU and UK administrations have indicated that they will not let the targets aimed at through the recently passed Corporate Reporting Standards (CRS) by the OECD members get watered down by cryptos.
- China is one nation that has had no kind words for anything crypto. In line with the country’s focus on stemming capital outflow and suppressing corruption, China appears committed to stamp out cryptocurrencies from its jurisdiction completely. The country’s authority started by banning ICOs before freezing bank accounts of exchanges that dealt with crypto assets. The government moved on to kick out cryptocurrency miners and started a nationwide ban on anything related to cryptocurrency trading. It is the biggest clampdown to have reported in the crypto niche by early 2018.
- While the resolve to stamp out cryptocurrencies is evident in China and all Special Administrative Regions, it is interesting to note that mining, trading, and new cyptos have burgeoned so much in the country. Over 50% of the total mining population is located in China while cryptocurrency adoption is spreading very fast.
4) The US.
- Though the United States was the first jurisdiction to notice the threats associated with cryptocurrencies, it appears that it has a lot to benefit from faster proliferation. The federal authorities have shied away from crafting laws or making major guidelines on how people should go about cryptocurrencies.
- By early 2018, the US Securities and Exchange Commission (SEC) pointed at the risks that came with cryptocurrencies. However, it was the Commodities Futures Trading Commission (CFTC) that gave the first direct non-binding guide to people in the crypto niche. CFTC clarified that people who are trading in cryptocurrencies should consider them as assets. This means that they are grouped with other securities such as shares. The main aim of this clarification was to ensure that all traders pay taxes appropriately.
- The notion that cryptocurrencies are global might have made the US hold back and try to woo other nations into the idea of regulations. In January of 2018, the Secretary of the Treasury, Steve Munich, announced that he had formed a Financial Stability Oversight Council (FSOC) and mandated it look at the cryptocurrencies. The US intends to draw members of OECD and ensure that the regulations could be tacked at a global level for greater effect.
- One country that has promised to go against the grain when it comes to cryptos is Switzerland. The Swiss administration has indicated that it wants the country to be a crypto nation. Even as other countries such as China, Venezuela, and Russia work on scaring the cryptocurrencies away, Swiss administration has opened hands for them.
- On January 18th of 2018, the Swiss minister for economics, Johann Schneider-Ammann, told reporters that they would stop at any point in ensuring that the country became a crypto nation. He indicated that they were starting with ICOs by setting up an ICO Working Group to help raise the legal certainty.
- While other nations threaten to pass very harsh regulations, you can rest assured that Switzerland will be an oasis for crypto success. The ICO Working Group is a unit under the Swiss Federal Council. The positive expectations in Switzerland have already started attracting cryptocurrencies as most of them focus on positioning their foundations in the country.
Ethereum Classic and Taxes
The topic of cryptocurrencies and taxes is very complex. Yes, probably more complex than regulations. Most cryptocurrencies in the market out there today were established to offer users with a completely anonymous trading platform. This anonymity has been taken by many people to mean that they can hide from everyone including tax authorities. This notion has seen some of them offloading from other investments and joining the Ethereum Classic network.
Even though it is true that Ethereum Classic and most cryptocurrencies are anonymous, the argument that you will forever be anonymous is misplaced. As technology continues advancing, there is a probability that you will be uncovered, and the identity unmasked. This means that a lot of cases could be instituted against you. To demonstrate this, it is important to check the Bitcoin situation.
After Satoshi Nakamoto launched Bitcoin, it was tagged as the most anonymous thing in the globe. This made even criminals including those that advanced Wannacry malware to prefer payment in Bitcoin. But the technology advancement in the subsequent years made it easy to uncover the users in the network. This is the reason that the Ransomware wannary cybercriminals find it hard to withdraw the Bitcoins paid by the companies they defrauded.
Experts are warning that looking at Ethereum Classic trading as a tax-free venture is bound to fail at some point. The good thing is that you can still enjoy full benefits of trading or using Ethereum without breaking related tax laws. Here are some useful tips to help you enjoy full benefits of using Ethereum Classic without worrying of breaking tax laws.
- Always ensure that revenue from Ethereum related activities is considered taxable income.
- Make sure to capture the corresponding Ethereum Classic value in fiat when trading in the Ethereum Classic markets.
- If you are a trader and accepts payment in Ethereum Classic, It is important to highlight that when filing tax reports.
- If you find preparing books of accounts difficult because of transactions are done in Ethereum Classic, do not hesitate to contact a financial expert.
Does Ethereum Classic Have a Consumer Protection?
Ethereum Classic does not have consumer protection. When Ethereum was created, the ownership shifted from the core code developer/ founders to the nodes spread in the network. This means that you are on your own when operating in the Ethereum Classic network. If you send the ETC coins to the wrong address, there will be nowhere to complain. Indeed, it is even worse because the cryptocurrencies are not regulated. Therefore, you cannot rush to the courts.
Even if the development team is very committed to ensuring that the system is secure, you must be extra careful to ensure that your assets remain secure in the network. Here are some useful tips on how to operate safely on the Ethereum Classic network.
- Start by picking a highly secure wallet.
- Only trade Ethereum Classic coins in secure cryptocurrency exchanges.
- Make sure to use a single computer or device to access your wallet or Ethereum Classic network.
- Always triple check the public keys of the targeted address when sending cash.
- Always store the private keys seed carefully and maintain a backup of the selected wallet.
Illegal Activities with Ethereum Classic
Since 2009 when cryptocurrencies debuted, cybercriminals saw it as a unique opportunity to advance their activities. They were particularly attracted to anonymous cryptocurrencies because they could cover them from being noted by authorities. After the formation of Ethereum Classic through a hard fork, a lot of people came out to claim that it was a scam. But the developer team refuted the claims and demonstrated that it holds the ideals of the original Ethereum.
Since the DAO attack that resulted to the formation of the Ethereum Classic, no illegal activity has been reported with ETC. The Ethereum Classic team has been active in working with top security teams such as CloudFlare to reduce the danger or attacks and use for illegal activities.
Is Ethereum Classic Secure?
The security of a network is one of the key things that investors look at when deciding whether to join the crypto community or not. After the DAO attack that shocked the entire cryptocurrency network, it appears that the development team learnt the hard way. Since then, the development team uses three main methods to guarantee users of utmost security.
- Regular reviews of the network ETC system security. This is the main thing that has made the development team to easily identify flaws in the core code and fix them on time.
- The development team has partnered with security organizations such as ColuldFlare to help secure the network.
Is Ethereum Classic Anonymous?
When developers work on cryptocurrencies, one of the main aims is ensuring they make them as anonymous as possible. The focus on providing complete anonymity at Ethereum Classic is the main reason that a lot of users are interested in the network.
The main method of the used to guarantee users of total anonymity is encryption. The moment a transaction is flagged off, the Ethereum Classic system encrypts it to ensure that no person can know the actual users. Even the miners spread in the network can only confirm that the public address has ample coins but cannot tell the actual owners.
Has Ethereum Classic Ever Been Hacked?
The biggest successful attack associated with Ethereum Classic was the DAO attack. Though many people tend to associate the DAO attack with ETC, it should actually be in Ethereum. Ethereum Classic block extended up to block 1,920,000 which was the block before DAO attack.
Apart from the DAO attack, no other attack has been associated with Ethereum Classic. This means that ETC development team has maintained its focus on strengthening the core code to reduce the risk of attack from hackers as well as illegal traders.
Notably, this doesn't mean that ETC is not subject to attacks. A lot of attacks are always directed at the Ethereum Classic network. It is, therefore, crucial to be extra careful when operating in Ethereum Classic network to reduce the risk of attack especially at the wallet and exchange levels.
How Can I Restore Ethereum Classic?
If you have some ETC, the expectations are very high. You can hold them and wait to see the price grow over time or trade in the cryptocurrency exchanges. However, it becomes very painful after realizing that the so much cherished ETC coins have been lost. After the loss, the capability to restore the coins depends on the method of loss.
If the Ethereum Classic coins were lost through hacking or sending to the wrong address, they cannot be restored. They are gone forever. They have simply changed hands.
If the Ethereum Classic coins were lost because your wallet got damaged or you forgot the private keys, it is possible to restore them. For those who have forgotten or lost the private keys, it is important to use the seed phrase that was generated when you first used an Ethereum Classic wallet. Then, apply the private keys to the wallet to restore the lost coins.
For people who lost their Ethereum Classic coins through damage their wallets, restoration can be done in two ways. One, you can use a backup wallet. Two, you can acquire another ERC20 wallet and use the seed phrase to reconcile with the network. This will get you back the lost coins.
Why Do People Trust Ethereum Classic?
When Ethereum was formed, many people considered it the main competitor to Bitcoin. Even after the DAO attack that made a big chunk of Ethereum users to walk away, a significant community that was anti-hard fork still holds onto the original blockchain. Besides, the community has been growing over time. Here are some of the main reasons making people trust Ethereum Classic.
- The Ethereum Classic community is bound by the focus on immutability.
- The value of the Ethereum Classic has grown significantly.
- Apart from the DAO attack, the Ethereum Classic has demonstrated it is highly secure because no successful attack has been reported in the network.
- Ethereum Classic provides fully decentralized applications. With Ethereum Classic, the applications are built upon EVM (Ethereum Virtual Machine) as well as public nodes. This is unique because the network development code target is making the ecosystem a unit of online exchange and craft protocol similar to TCP/IP (Transmission Control Protocol / Internet Protocol).
History of Ethereum Classic
The history of Ethereum Classic can be traced back to 2015 when the Ethereum cryptocurrency was founded. The main reason for Vitalik Buterin to create Ethereum was to provide users with a more valuable platform that could allow them to send money, implement smart contracts, and run decentralized applications. Here is a break down of the main events in the Classic Ethereum history.
- On July 30th of 2015, Vitalik Buterin launched the Ethereum blockchain and formed the Ethereum Foundation. The Ethereum cryptocurrency became the first blockchain-based turing-complete smart contracts platform.
- On April 5th of 2016, Slock.it designed the Ethereum DAO. A security audit was also done by Dejavu.
- On April 30th of 2016, the DAO crowdsale began, and the DAO smart contract got deployed. The members of the public were hasty to buy DAO tokens. A total of $150 million was raised during the crowdsale.
- On June 9th of 2016, a Call Bug was discovered as serious security vulnerabilities were revealed. These vulnerabilities had been overlooked during the Solidarity contracts.
- On June 17th of 2016, DAO was hacked, and 1/3 of the total value raised during the crowdsale siphoned away. The debate on the next action starts with the developers differing sharply on whether to implement a soft or hard fork.
- The implementation of the hard fork was finally agreed on July 20th of 2016 and implemented on July 23rd of 2016. This immediately created Ethereum Classic. On the same day, Poloniex listed BTC on its trading list.
- On August 15th of 2016, the Ethereum Classic declared independence and indicated that it did not want to be associated in any way with the Ethereum Foundation. Five days later, the millions that had been frozen after the DAO attack became available to the DAO token holders. The price of Ethereum Classic continued to do relatively very well.
- In March of 2017, the Ethereum Classic network started an investment fund.
- In December of 2017, the ETC changed unlimited token emissions to a fixed cap fiscal policy. This made Ethereum Classic similar to Bitcoin with 210 million tokens.
Who Created Ethereum Classic?
Though Vitalik Buterin is the commonest name that comes up when you search anything related to Ethereum, it was the community that forced the hard fork that yielded ETC. When the DAO attack took place, Buterin and the development team strongly differed with the community on what to do. When they could not agree, a hard fork had to be implemented splitting Ethereum into two.
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