Digital currency investment: Will ETC be the next hot spot?

ETC, also known as Ethereum Classic or Ethereum Original Chain, has been around for a while and has experienced dramatic ups and downs. It was even threatened with a 51% attack by Chinese miners. It is currently showing unusually tenacious vitality. Recently, the digital currency market has been surging. Bitcoin and Litecoin have both seen an increase of more than 30% in the past two weeks. Many people ask Martians what the next hot currency will be. Every time, Martians recommend ETC without hesitation. Why? In this article, Martians will talk to you about the essence of ETC and why the value of ETC is far underestimated.

Philosophy

1. Rule by man or rule by law

This is the essential difference between ETH and ETC, that is, the difference in the main idea. It is precisely because of the suspicion of the financial institution system and human nature that "code is law" has become the innovation of Bitcoin. From then on, humans can complete the transfer of value without trusting each other. The current market value of Bitcoin exceeds 15 billion US dollars, which fully proves the expectations of human society for it. On the other hand, when the DAO incident occurred, the Ethereum Foundation headed by Vitalik forcibly launched a hard fork, resulting in two chains, ETH and ETC. Vitalik even declared: "Immutability is worthless in the face of blockchain development." By making such a statement, Vitalik has gone to a very dangerous extreme. If the blockchain can be modified at will, then what is the difference between it and a private database? Although the concepts of private chains and consortium chains are very popular, with the passage of time, only public chains have demonstrated social value. If you believe in human rule, please choose ETH; if you believe in rule of law, please choose ETC.

2. Monopoly and corruption

In the field of digital currency, miners and mining pools are decentralized, exchanges and wallet services are decentralized, and the writing and use of smart contracts are decentralized, but the operation and maintenance of the core code is currently centralized. Power leads to corruption, and absolute power leads to absolute corruption. There is a saying that Martians have not verified, but it is terrifying to think about it: the Ethereum Foundation has crowdfunded more than 40,000 bitcoins, but most of them were raised by the Ethereum Foundation itself. The crowdfunding and issuance of DAO were also done entirely by people inside the Ethereum Foundation. Most of the ETH stolen by hackers also belong to the Ethereum Foundation, so the Ethereum Foundation will forcibly modify the Ethereum blockchain despite the opposition of the integrated community. The entire Ethereum ecosystem is completely manipulated by the centralized foundation, which is the sadness of the digital currency community. Miners and digital currency players, please support ETC and adhere to the concept of decentralization, which is the core value of blockchain.

3. Value comes from scarcity

Since the fork, the monetary policies of ETH and ETC have also taken different paths. 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 has planned to reduce production in the same way as Bitcoin. The total amount will not exceed 210 million in the end. If there is no scarcity, what is the difference between digital currency and real-world legal currency? At most, it is to swap miners with the central bank of the real world. Central banks of various countries are frantically printing money to dilute the wealth of ordinary people. Will digital currency follow the same path? What's more frightening is that ETH currently does not even have a monetary policy. The specific policy will not be determined until it is transferred to POS. So who can determine this monetary policy? It is the centralized Ethereum Foundation again. For supporters of digital currency, what we need is clear expectations. Please support the limited production of ETC.

4. The battle between POW and POS

The core of digital currency is the consensus mechanism. The POW mechanism based on proof of work has been proven by the market to be the best system. Eight of the top ten digital currencies in terms of total market value are based on the POW mechanism. PeerCoin, which first proposed the POS mechanism, has almost disappeared. The setting that owning coins will generate more coins will lead to a serious Matthew effect, where the rich get richer and the poor get poorer. What is fairness? If we cannot achieve fairness in results, we must at least achieve fairness in mechanisms. For POW, miners can choose to mine or not at any time, while for POS, latecomers completely lose the opportunity to participate. In addition, hot wallet online mining will also lead to serious security issues and easily lead to hacker attacks, which has already happened to PeerCoin. From the perspective of economics and cryptography, the POS mechanism is a castle in the air and will inevitably collapse. Supporting ETC is supporting the POW system.

Economic aspects

Comparison of ETH and ETC trends

1. Same code, different price

At present, the codes of ETH and ETC are almost identical, but the prices are different. This is a strange thing. No wonder many people in the Ethereum community shouted the slogan of Sell ETH buy ETC. For the Ethereum community, when the fork happened, everyone had the same amount of ETC and ETH at the same time. Once the market started, everyone had the same chips. From a purely technical point of view, the codes of ETC and ETH are exactly the same, and the risk is even lower. ETH has recently encountered repeated code modifications and forks, resulting in continuous obstruction of withdrawal and recharge business of exchanges that have listed ETH. If ETC can reach the market value of ETH, it means that ETC still has at least 7 times the market space. Then for investors in the Ethereum community, there is a possibility of obtaining high returns at extremely low prices, and it will be realized sooner or later.

Second, the deficit in quantity

The current total amount of ETC is set at 210 million, while the current total amount of ETH is undetermined. If the transfer to POS fails, which is a high probability event in the eyes of Martians, then ETH will have no upper limit, and the final total amount will be more than ten times that of ETC. Here comes another interesting thing. The quantity and price of ETH and ETC have doubled. What does this mean? Assuming that the total market value of ETC = the total market value of ETH, then the price of a single ETC should theoretically be ten times that of ETH, which is a reasonable market price. If the current price inversion of ETC and ETH is taken into account, then ETC itself may have 70 times the room for growth! And this will be captured by the market and reflected in the basic disk.

3. Support from Trust Fund

A big factor in the current rise of Bitcoin is the participation of large trust funds. The earliest Bitcoin trust fund was established by Barry Silbert of Digital Currency Group DCG. The trust fund is now listed on the Nasdaq with the code GBTC and holds more than 200,000 Bitcoins. By 2016, more and more Bitcoin trust funds began to be established, and these trust funds formed a continuous buying cash flow. Barry Silbert has clearly stated on Twitter that DCG supports ETC and will not sell ETC until the price of ETC surpasses ETH. In addition, Barry Silbert also stated in the ETC Slack group that when the monetary policy of ETC is locked, an ETC trust fund similar to GBTC will be established. As the current leader of the industry, DCG will undoubtedly have a huge impact on the market.

Talent

1. The counterattack of foreign communities

After the initial wild period, ETC's core code construction is accelerating. The number of developers with commit permissions in ETC's GitHub has reached 34, far more than the initial 1. ETH's main clients are Geth and Parity. ETC recently gave birth to a new development team, Grothendieck, which is led by Charlie, the former CEO of the ETH project and Hong Kong IOHK. Unlike ETH's non-mainstream language, Grothendieck chose Java. Currently, more than 80% of the entire programmer community uses Java. The new path will bring a qualitative leap in the talent pool. At the same time, various indicators of the ETC community, including the number of followers on Twitter, Reddit, Slack, and Telegram, have continued to rise. In contrast, ETH has rarely made any moves since the DAO incident. The latest news is the theft of Shen Bo, the fund manager of Distributed Capital, and the construction of foreign communities has stagnated.

2. Outbreaks in domestic communities

Unlike ETH, which is mainly participated by foreign communities, ETC's first ICO project was born in China. The largest single miner in the Chinese community launched the crowdfunding of ETCWIN and successfully raised more than 1 million ETC. Etcathon, China's first FinTech Connect hackathon, used the ETC blockchain as a development tool. Beijing's first blockchain gambling project, Block Racing, was born, and the project's warrants will be publicly traded soon. Shanghai Kuoyue Technology announced the ETC incubator plan in Shanghai, Wuhan, and Chengdu. In the future, more excellent smart contract applications will be born based on ETC. The Chinese ETC community has established the ETC Promotion Association, and almost all companies in the ETC-related industrial chain have joined it. Chandler Guo, a well-known angel investor in the digital currency community, plans to invest in at least 100 ETC ICO projects in the future. In contrast, since the fork of ETH, no ICO and smart contracts have been born in China.

3. Support from large miners

Due to the stability of the code and the clarity of the monetary policy, ETC has gained more and more support from miners. As the actual maintainers of the blockchain, miners are unwilling to be used as a temporary stepping stone. Just as Bitcoin Core's arrogance towards the mining community will eventually hurt their own reputation. For ETH, publicly announcing the transfer to POS is an insult to the mining community. According to Martians' private understanding, most miners have no plans to hold ETH, and Chinese miners represented by 91pool are constantly increasing the computing power of the ETC network to show their continued optimism about ETC. On the other hand, since the announcement of the transfer to POS, the price and computing power of ETH have continued to decline. Without the support of miners, the public blockchain will become a sourceless water.

Summarize

Martian has said so much in this article. In fact, friends who don’t have time to read can completely skip all the above information. The meaning of this article is: the price of ETC will exceed ETH in the future, and the current price of ETC has at least 7 times of appreciation space. As a value investor, the most important thing is to make a good trend judgment and insist on value realization. If you missed the 10 yuan Bitcoin, I hope you don’t miss the 10 yuan ETC.