20 Jun While Ethereum Surges, Ethereum Classic Plays The Dark Horse
Ethereum is experiencing historic growth in terms of price and market capitalization. In less than three months, the price of Ether, the underlying cryptocurrency of Ethereum, has risen from around $50 to almost $400. Ethereum Classic, its parallel chain, has seen its underlying cryptocurrency ETC rise from about $2 to over $23, as at the time of writing.
Like Bitcoin, like Ethereum
Crypto Consultant President Jason Cassidy tells Cointelegraph that one of the reasons for the historic rise in the value of Ethereum is the fact that it has rebounded with conviction, having survived a contentious hard fork in 2016.
This is similar to how Bitcoin has developed over the years. In 2011, Bitcoin suffered a major setback which saw the cryptocurrencies’ price decline by up to 94 percent. However, since its recovery in 2013, Bitcoin has shown exceptional resilience and bounced back from several other setbacks.
ICO frenzy is fueling Ethereum’s growth
Mostly considered as the major reason for Ethereum’s historic rise in value is the fact that the platform has been embraced by a significant segment of the cryptocurrency ecosystem.
A lot of projects are being developed on top of the Ethereum platform. In 2017, there has been a litany of ICOs successfully debuting on the Ethereum platform. According to Cassidy, this is a significant addition in terms of investment for the technology.
“The constant stream of successful ICOs that are debuting on the underlying Ethereum platform only adds more value to the investment side. Keeping in mind that Ethereum is not a store of value but more of an enterprise-level platform for utility, it has and should continue to do very well in the near future.”
Simply put, an ICO is a fundraising tool that trades future crypto coins in exchange for cryptocurrencies of immediate, liquid value. Therefore, having these new projects debut on the Ethereum platform creates more demand for its underlying cryptocurrency and, ultimately, an increase in value.
ETC: The dark horse
While Ethereum (ETH) appears to be taking all the media attention, Ethereum Classic (ETC) seems to be playing the role of a dark horse. Gradually, Ethereum Classic is also being embraced by a couple of projects. This has influenced the value of its cryptocurrency which now trades at about $23 as at the time of writing.
Projects being built on Ethereum Classic include Inpay, which claims to be a versatile and user-friendly cryptocurrency with dual Blockchain support (Ethereum Classic and Waves).
The propagators of Inpay claim to leverage on the completely decentralized infrastructure of the smart contracts and DApps of Ethereum and the decentralized exchange technology of Waves to offer an immutable large community of fast and cheap transactions. The technology of Ethereum Classic is employed by Inpay to enable features such as decentralized voting systems and aliases.
Another Blockchain-based project which adopted ETC as a means of transaction during its ICO is ChronoBank.
With its goal to disrupt the HR and recruitment industry, ChronoBank is perceived as one of the most successful ICOs of 2017
Despite the wide gap in price between ETH and ETC, the recent correlation in the price movement of the two cryptocurrencies is obvious. Therefore, considering both trends in unison would not be out of place.
How will it scale?
A concern that Cassidy holds regarding Ethereum is how it will scale in the future, being a platform meant for businesses. He states:
“There are scaling solutions in place for the road map so we will have to see how things evolve. The Bancor ICO revealed some areas of improvement for the network. The bottom line is, the more complex a system is the more potential for faults to occur within it.”
With the big moment in Bitcoin coming, as the scaling debate nears a crescendo, players in the crypto market are in close observation of how the outcome will affect other altcoin prices. Top altcoins are expected to exhibit some significant reactions depending on how the Bitcoin debate plays out.
In Cassidy’s opinion, if the situation becomes chaotic, then Ethereum and many other top cryptocurrencies may reap the benefits of the panic that may set in. The capital inflow to Ethereum itself could be substantial.