With production cuts approaching, ETC may become a new investment hotspot

Although the recent ETH cat-raising incident and Bitcoin surge have attracted too much community attention, it seems that ETC is more like a group of dark horses that have been developing and exploding in a low-key manner. After the hard fork on July 20, 2016, although the codes of ETH and ETC are almost identical, the monetary policies have developed in two different directions. ETH currently has no upper limit and is in a stage of continuous issuance. ETC has returned to the tradition of the Austrian School of Economics, and the new monetary policy formulated in the way of Bitcoin will not exceed 230 million.

ETC production reduction plan

On November 13, the ETC Global Summit held in Hong Kong reiterated the monetary policy and economic model of ETC digital assets. ETC will adopt an asset policy similar to Bitcoin, ECIP-1017. According to the ECIP-1017 rules, ETC will reduce production by 20% on December 12, and will reduce production by 20% every five million blocks thereafter. This monetary policy will gradually reduce the total amount of ETC, and ultimately maintain the total amount at 210-220 million, not exceeding 230 million. This will effectively curb the inflation of ETC.

Production reduction boosts ETC price recovery

The announcement of the ETC production reduction policy is a positive for the ETC market, driving the crazy growth of ETC prices. Since ETC and ETH parted ways, the price of ETC has remained at a low level. This time, ETC broke the previous record and rose to a maximum of $34. Before that, its price had been hovering between $9 and $12. Affected by the news, ETC rose to a high of more than $30 in a short period of time, and the price doubled by nearly 300%. Compared with the initial price of ETC of about $2, this is a very big breakthrough. At the same time, ETH has also begun to gradually recover recently, but the price has only risen by about 60%.

Production cuts further push up ETC prices

At present , the issuance of ETH is still in the stage of additional issuance, while ETC has begun to reduce production. There is an old Chinese saying that "scarcity makes things valuable", and the total issuance of digital assets is limited, which lays the groundwork for the rise of their value. As the market expands, more and more people, more and more physical enterprises, and more and more good products enter this field, which will inevitably lead to the appreciation of the digital asset. Bitcoin is a very good example. ETH uses its first-mover advantage to suppress ETC in the short term, but in the long run, since the supply of ETH is unlimited, as time goes by, a large number of ETH entering the market will inevitably lead to oversupply in the market. After the frenzy, investors will inevitably choose rationality, and ETH's first-mover advantage will gradually fade. The market will inevitably return to rationality, and the value of ETC will gradually be recognized by the market and users. In terms of price, Barry Silbert, a big shot in the digital currency industry and a digital currency group, also hinted on Twitter that the price of ETC will surpass Ethereum. All signs indicate that it is only a matter of time before ETC surpasses ETH.

ETC network is more secure

Compared with ETH, the ETC network is also more secure. Because the developers of ETC said that they will not use the POS mechanism for mining like ETH, but will still use the POW consensus algorithm. The core of the blockchain is the consensus mechanism. The POW mechanism based on proof of work has been proven by the market to be the best system. Eight out of the top ten digital cryptocurrencies in terms of total market value are based on the POW mechanism. For POW, miners can choose to mine or not mine at any time, while for POS, latecomers completely lose the opportunity to participate. ETC's use of the POW mechanism will attract more miners to join, making any nodes connected to the dynamic network profitable and making the network more secure.

The Internet of Things will become a new hot spot for ETC

At present, ETC has been applied to the Internet of Things to a certain extent, and is providing power for the global development of the Internet of Things. As ETC obtains more and more data traffic from IoT devices, the value of ETC will continue to rise. As Grayscale, the sponsor of the ETC Investment Trust, wrote in a paper published in August this year: "We believe that ETC will one day become the foundation of a global, highly secure, decentralized Internet of Things (IoT). If ETC can obtain 10% of the data traffic of IoT devices by 2025, the price of each ETC will be close to $150." In addition, compared with the recently popular IOTA, ETC has incomparable universality and has stronger application support capabilities in the field of IoT. In terms of price, due to excessive centralization, the price of IOTA is irrationally high, and at the same time, various loopholes have been exposed recently. As an old decentralized digital currency, the price of ETC will definitely surpass IOTA in the near future.