Ethereum Classic went from a protest vehicle to a more serious project this weekend following notable nods of support from major exchanges and community members.
That momentum continued today as activity surrounding its new blockchain continued in earnest, and market participants voiced their enthusiasm for the effort. Now, the eighth largest digital currency with a $37m market cap, Ethereum Classic is listed on several exchanges and has quickly built up a small network of services.
For those who haven’t been following, the rise of Ethereum Classic is the latest twist in the narrative surrounding The DAO, the $150m fundraising vehicle compromised in June.
To recover the funds, ethereum developers solicited a community vote early this month, a process that resulted in the decision to “hard fork” its blockchain last week, or implement a change to the code that would return funds to investors.
Still, while presumed to have an endorsement from the community, the decision was met with resistance by a notable minority.
This small, but growing contingent of the ethereum community has continued to maintain a blockchain with the alternative account history (Ethereum Classic), one in which a copy of the original funds are still under control of the anonymous person who executed the attack on The DAO.
For now, just how serious the support is for the project, or whether it will emerge with a unique value proposition, seems uncertain.
Early feedback from the market, however, is positive.
With a trading volume in excess of $10m over the past 24 hours, ethereum classic is just $14m in trade volume behind ether, the native currency for the ethereum blockchain containing the hard fork code (sometimes called Ethereum One or Ethereum Core).
The boost in publicity seems to have briefly sent the Ethereum Classsic market cap up to $77m, but the benefits of the attention have been declining.
At press time, the price of classic ethers was down 44% in the past 24 hours.
Miners see profit potential
Outside the exchanges, Ethereum Classic also seems to be gathering traction from miners who see a value in securing its distributed ledger.
Though skeptics argue miners on the new branch of the ethereum blockchain should stay calm until the novelty wears off, one early bitcoin adopter has thrown a considerable amount of hashing power into the Ethereum Classic effort.
J. Maurice estimates he at one time represented 50% of all mining power on Ethereum Classic, a testament to his confidence in the project. In interview, Maurice said that he believes Ethereum Classic supports his views by rejecting the idea that intervention was necessary to save DAO investors.
“I’m just another crypto-anarchist with a warehouse full of GPUs. I’m just supporting the original blockchain I always have. Apparently, a lot of other people agree.”
Co-founder of WizSec, a security startup best known for looking into the Mt Gox’s transaction records, Maurice said he threw 10 GH/s of mining power into Ethereum Classic when he saw the difficulty to mine a block fall below 1%.
At the time he started mining, the full amount of power on the network was only 20 GH/s, which allowed him to mine 31 blocks in a row, accumulating over 20,000 ETC in just two days.
But that success rate is falling, Maurice says, as more people are recognizing that Ethereum Classic could offer the same functionality as Ethereum, but for a fraction of the cost.
Since Poloniex listed Ethereum Classic, Maurice says he’s only solved 34 of the last 1,000 blocks or so, a sign that reflects growing interest from miners.
Today, cryptocurrency mining pool MinerGate added Ethereum Classic support, and BitMEX and ShapeShift.io revealed they should be announcing support soon.
That said, blockchain data tells a slightly different story.
At press time, the total hashing power supporting Ethereum Classic was 173.7 GH/s, or about 2% of the Ethereum network. This was down from over 5% yesterday.
Not so fast
Successes aside, Ethereum Classic still has its skeptics.
Among them is former Goldman Sachs trader and Bain Capital analyst, Maxime Boone, who told CoinDesk he would only invest in Ethereum Classic if it attracted volumes of at least one-third of ether.
But Boone, now the director of bitcoin market maker B2C2, is skeptical this will happen. “I don’t think it will,” he said.
Still, the man who launched Ethereum Classic, who goes by the name Arvicco, said he’s ready to support the project long enough to potentially convince Boone and other traders to invest.
In conversation with CoinDesk, Arvicco said he’s being contacted by developers who have expressed an interest in building on the Ethereum Classic blockchain.
“Satoshi [Nakamoto, bitcoin’s creator] waited three years before people started to take his creation seriously. I don’t think it will take exactly this long in our case, but some time will no doubt pass before people assign appropriate value to our token.”
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