Crypto News

Will Ethereum Classic Be A Repeat Success in Coinbase?

Two days ago, Coinbase announced the addition of Ethereum Classic (ETC) to their markets. This caused the price of ETC to spike by over $3, from 12.92 to $16.15 before settling in the mid $14 range. The announcement came as much as a surprise as it did as a mystery. Despite being one of the top 20 coins in a market of an estimated 1,628 coins, ETC is not regarded as a essential project, or a sought after addition to any portfolio. In the overall scheme of the market, ETC simply lacks the potential for growth or creativity necessary to drive major projects. Therefore the question on everyone’s mind is what is the real reason behind Coinbase’s decision and will it succeed.

What is ETC?

ETC is an open source platform for the development of decentralized applications (Daaps), and the deployment of smart contracts. It uses Proof-of-Work, and offer block production rewards to miners.

History

ETC the remnants of the original Ethereum blockchain. After the DAO hack in 2016, where $50 million were stolen, the developers of Ethereum decided to create a new blockchain to restore the stolen funds to their victims. This resulted in a hard fork that created two independent strands. The new strand kept the original name and symbol (ETH), while the old renamed itself Ethereum Classic. ETC offers the same features as ETH but it is a separate blockchain.

Coinbase

The addition of ETC to Coinbase had a mixed reception. In a market stoked by high profile projects like Ripple, Ethos, Iota and many others, ETC simply pales in comparison. ETC doesn’t have the trading volume or valuation as the aforementioned projects. And being a completely different blockchain, it will not share in the scalability upgrades being developed for ETH.

Coinbase for its part defended it’s decision by saying that ETC was selected for its “regulation compliance and decentralization.” This is a vague statement that only serves to fuel speculation as to the real reason behind the addition. It is possible that with the selection of ETC, Coinbase is trying to play it safe and avoid the fiasco created with the addition of Bitcoin Cash. Or Coinbase plans to develop the smaller blockchain into a competitor for Ethereum. Given its capability to develop ERC20 tokens, paired with the rumored listing of the 0x token, it is not unlikely that Coinbase may be trying to expand its sphere of influence into decentralized exchanges much like Binance is doing.

Conclusion

The true reason behind the acquisition is speculative at best. And no doubt the path of ETC will be fruitful as much as risky. In the last few months, it’s become apparent that the number of 51% attacks target smaller coins with vulnerable, fewer, nodes. The news of the Coinbase – ETH partnership will undoubtedly raise the value of ETC but that will also make it a tempting target for malicious attacks.

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