ETC Dominates over Ether as Support Grows | dinbits


Since the DAO hack, we've heard explanations, seen mistakes, watched the blockchain industry spit out allot of opinion on the topic, and watched a community divide over the the outcome while engaging in a fierce debate over a controversial hard fork.

One issue with the hard-fork and its consensus process, however, is that only Ethereum developers and miners seemed to have any say in the outcome. The developers propose, the miners accept or reject. 

It's a known fact that the proposed fork code was released before consensus and technical accommodations were put in place to support that while they convinced more miners that is was a good idea. Most of the oppositions feelings on the topic fell on deaf ears since users and investors (those making Ether worth valuable) had no voice, no vote, and no decision making power. 

It was operated more like a dictatorship and those with the most to gain and the resources to push the code into place did so regardless of any support or opposition from anyone else. If you followed the debate it was clear that there was a strong divide. 

Regardless, the developers can write whatever code they want and since the effect on the miners is virtually non-existent, they had little vested interest either way and can be persuaded into adoption rather easily and tend to follow the flow of majority. For them its just a quick install update. This is something a stronger network might have prevented and certainly makes more difficult. Ethereum will eventually get to that point but it clearly wasn't the case here. 

They also knew that being only a year old grants them room for mistakes like these since there is time to recover before they are widely used. This is true.

The Voice

Everyone involved or holding Ether was put at risk in this process of forking. Those without the ability to voice an opinion on the matter could do nothing more than wait and hope their investments were going to be safe. That was until the hard-fork happened. 

When that happened they were given a voice. They then had an option. Follow new chain or stick with the original and they have spoken rather loudly.

It's not apparent if anyone saw this coming but the investors, users, and holders of Ether on the Ethereum network flocked to support the original network now relabeled Etherum Classic or ETC for short. Not only did they speak, they dominated the new chain in volume. 

At the time of this writing ETC is doing more than double the volume than that of ETH (the new Ether) with growing support of its trade and hash power. It went from a relatively low hash rate to over 700GH in a single day completely rendering threats like those of some malicious miners to attempt a 51% attack with 100GH reserved for the purpose.

ETC dominated ETH over the course of the day into into today's session while ETH consistently traded downwards and dropped steadily with less than half of the volume.

Ethereum Classic Trading 24 Hours

Rally | Profit Taking | Volumes |  ■ Averages

This equates to ETC being valued at approximately somewhere near 50% of the valuation of ETH when the valuation and market capitalization is considered and it did this in a single day. It traded somewhere around 162000 XBT in volume, roughly $105 million USD. No digital currency or asset has ever done that in its first 24 hours. 

Today Ether has traded at a volume of around $32 million USD while ETC continues its dominance already hitting $64 million in volume. That's not just speaking, that's more like screaming at the top of your lungs from the top of Mt. Everest.

The Support and Market

Poloniex, where the above data is extracted from, was the first to support ETC and after reaching about 50 million in volume, Genesis quickly joined and reported an immediate 100k in volume in interest. Bitfinex, Kraken, Coinbase, Bter, Genesis, Yunbi, and others have all moved to implement support for ETC trading with the exception of Coinbase who will restrict support to withdraws only pending further analysis and ultimately the support of the longest chain.

Yunbi ran into a glitch when implementing causing a small loss of 40k ETC due to the way the hard fork is implemented. This is a well documented issue that Ethereum developers made available to everyone and most exchanges took precaution. However, you have to dig for this information and Yunbi obviously didn't get the memo. 

There's obviously a serious communication problem between Ethereum developers and the rest of the planet. However in their defense we knew about it and felt it was well covered.

Still, it doesn't cover up the fact that there's a gigantic mess here and that can be attributed to poorly communicated efforts.

Coindesk and media outlets published articles that seem to relay a "surprised" realization of the secondary fork and its ability to continue as an operating chain which is actually the original chain. The new Ether is a copy. 

"an unexpected consequence: the creation of two parallel ethereum chains" - Mathew Spoke

Whereas the fact was actually the opposite as we reported, and generally most poeple paying attention knew in advance. That said, the entire process was very difficult to follow and close attention to highly technical explanations had to be decyphered to realize any of this leaving the common user at a complete loss.

Vitalik Buterin

Regardless of your opinion of Vitalik Buterin, he has done positive things in the industry and Ethereum is one of those resulting efforts. I remember when he first started the effort and many people denounced the idea. Granted that was in the middle of Altcoin 1.0 when we saw a new Altcoin almost daily much like Altcoin 2.0 will soon over-saturate the market with a thousand Altchains (alternative blockchains) or distributed ledgers like IBM, R3DEV, Ripple, and others. I'm personally am waiting for BatChain. Regardless Ethereum is a positive thing for the industry, positive thing for bitcoin, and overall a good thing for everyone. 

Ethereum enthusiasts might be surprised to hear that remark, but bitcoin supporters predominately encourage and support Ethereum since it ultimately helps bitcoin and helps the entire industry (if you have to ask how, then you should save your opinion until you figure that out).

That said, the situation and perception of the outside world is certainly damaged in its current form. Even some ETC supporters were baffled and confused about what is going on and how the original chain is now being labeled an alternative chain. 

Buterin said this himself:

The foundation has committed to support the community consensus on the admittedly difficult hard fork decision. Seeing the results of various metrics, including carbonvote, dapp and ecosystem infrastructure adoption, this means that we will focus our resources and attention on the chain which is now called ETH (ie. the fork chain). That said, we recognize that the Ethereum code can be used to instantiate other blockchains with the same consensus rules, including testnets, consortium and private chains, clones and spinoffs, and have never been opposed to such instantiations. ...
...
All users who had ETH before block 1920000 now have both ETH (the fork chain) and ETC (the community effort to continue the no-fork chain). Users are generally advised that most Ethereum client defaults, including clients developed by the Foundation and by third parties (eg. Parity), will select the ETH chain; if you are offered a choice on a fork in the Mist interface, then selecting “Yes” on this choice will direct you to this chain. 

Basically that means that the new Ethereum chain is now called (ETH) and is the one they will support and ETC (Ethereum Classic) is the alternative chain. 

It's interesting to see the original chain described as "alternative" when it is in fact the original. It is also interesting to see all of the doom and gloom being preached about how unsafe the chain is when after the hack everyone was told how safe it was. The statements are rather contradictory leading to further confusion and most people don't like the idea of confusing change when it comes to something protecting their assets.

Just about all communications were like that of the above, other tried to explain it better and the efforts were of minimal success, including here at dinbits.com.

At the end of the day, it appears as if more of the Ethereum community than previously assumed were taken by surprise and/or were opposed to the hard fork in the first place.

Its really no real shocker that the developers are going to support the hard forked chain and actively labeling the original network the "alternative implementation". Anything other side would be kind of stupid and in case you've missed this entire drama we can explain this one the same way it should have been explained in the first place because then everyone would have understood that like everything else, it always comes down to money:

1. Hard-fork = $70 million richer
2. Original Ethereum = Not #1

Starts making sense now doesn't it?





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Image source: dinbits staff

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