What is Ethereum:
Ethereum is a second generation virtual currency that is intended for much more than just online sales and "Bitcoin like" digital currency services. The developers of Ethereum realized that institutions seemed more enamored with the idea of the BlockChain than Bitcoin itself and since has lead the way in providing a virtual currency that sells the blockchain more so than the underlying currency itself. Ethereum is not really positioning itself to be a replacement for Bitcoin as most of its use is in application and smart contract support, though there is some speculation it could inadvertently become direct competition to Bitcoin in conjunction to its current usage. Ethereum is the foundation of Microsoft's BlockChain As A Service (BAAS) and actually allows companies to develop applications on top of the blockchain providing a turnkey versatile global blockchain service.
What is the hardfork:
Recently Ethereum underwent a hardfork which is to say they created a new version of their software and had the global support infrastructure for Ethereum upgrade their software. The development staff also updated a block on the blockchain which is the ledger of all transactions that have occurred. The developers did so because another blockchain built on top of the Ethereum protocol had an exploit which allowed a person to write a contract for ~$50,000,000 worth of Ethereum to be paid out on 21.July.2016, essentially stealing $50,000,000 from innocent investors. The block that was re-written was the block that this exploit occurred, essentially returning all the funds back to their original owners. The change to the blockchain underwent a vote of the entire Ethereum network where as the vast majority of the Ethereum community (Those holding Ethereum) voted to support the change. Typically a blockchain's intent is that you cannot change history, to change a block that has been written to the blockchain was somewhat of a landmark decision.
How was Ethereum Classic created:
Some of the diehard fundamentalist crypto community did not like the idea of blockchain re-write, this is anti-blockchain technology which is supposed to be immutable, that is to say, it isnt supposed to be able to be changed, thats what makes it reliable (Even if it is to prevent an evil doer from robbing $50,000,000 from innocent investors). When the new software was released, a small portion of the fundamentalist crypto community refused to run the new software/blockchain and instead continue to support the old blockchain. There are now two separate ledgers for Ethereum and as of the date of the new software, they have gone their separate ways and do not record any of the same transactions, they have become two separate coins. The original blockchain is now called Ethereum Classic. The Exchange "Poloniex" legitimized Ethereum Classic by creating an exchange marked/liquidity to the old block chain. Whats more there have been 8 digit trading volume per day over the last two days since it started. Whether or not the Exchange did so as support to fundamentalist or to reap the income associated with the trades is unclear.
Should you invest in Ethereum or Ethereum Classic:
Investing is up to each individual but I believe it is important to educate many who may not understand the implications of Ethereum Classic and might be purchasing ETC on blind advice. Here are some important points regarding ETC/ETH that you should consider before buying into it.
-All the businesses that have built on Ethereum will continue building on the new chain (ETH), not the old chain (ETC).
-The new blockchain and software is what the Ethereum development staff is going to continue to support, any support to the old blockchain/software will likely be done by an unknown entity if at all.
-The network hashrate (The computational power supporting the back end transaction processing) for ETC is currently at 240GH, the ETH network is sitting at around 4600GH. The only reason any hashrate is on the old chain is because there are so few miners that the reward for minting new ETC even at the current price is enticing enough to keep some people mining it. Some small portion is also likely due to die hard support of the fundamentalist. The lower the value of ETC, the less hashrate there will be which means less network security or performance.
-Everyone who had ETH before the split have the exact same amount of ETC on the old chain and can sell it without any impact to their ETH (Taking per-cautions to prevent a replay attack). As someone holding a bit of ETH prior, why wouldn't I sell the ETC and buy more ETH with it, ETH almost certainly has a future, ETC almost certainly does not. ETH traders will cash out their ETC and drive it down past the profitability for profit miners to stick around while at the same time, likely pumping the "free money" back into ETH.
- "The developers could revert back to the old chain, you shouldn't sell your ETC". There is no turning back at this point, too many transactions have occurred on the new chain and by all standards, the migration to the new chain and software was a success, this is a scare tactic. Company's (such as Microsoft) are going to choose to stick with the vendor maintained and mainstream blockchain, even more so now that they know that they are less likely to be left holding the bag from an exploit even if they themselves create the exploit.
-People state ETC will go back up, just hold on to it. For the people who say this, ask them to elaborate on why they think it will do so. I suspect if you weigh what they tell you against what you have read here, you will likely elect not to purchase ETC.
-------------------------------------
I wrote this because I see over $25 Million in ETC trades in the last 48 hours, I feel like there are a lot of people who don't fully understand what is going on that are being taken advantage of. Fundamentalist are buying to prove a point, why are you buying, to prove a point or to invest? Hopefully this will prevent you from becoming one of the victims of the the ETC debacle which I feel is just short of a scam coin at this point. I hold ETH and have added to my position on nearly every pullback. ETH is still a risky investment but it is one of the least risky in the sector at the moment and based on technology, development, market support and general marketing it seems to have more potential than most the other virtual currencies out there in my opinion.
-Kilroy
I upvoted You
Expanse
There was no consensus for ETC, and consider what it means to double all the premines, all the whale bags, and that some clearly knew in advance. If people are ok with this, why not Bitcoin Classic, Dogecoin classic, Litecoin classic, and just destroy all of crypto? This is beyond dangerous. ETH should endure fine and Augur is coming, but ETC has the worst distribution of any crypto, since they gave millions of ETC to ETH devs, ETH foundation, and ETH whales. Fair? Hardly.
Your point does make one question how much of supporting the non-forked chain has to do with appeasing the community and how much has to do with extra revenue off the backs of new crypto investors. Many of us have questioned why the heck is Polo supporting the liquidity of ETC but at the same time, one must ask, why did the ETH Dev team release the new Geth in a fashion that supports the the ability for Polo to do so?
What makes you say that businesses will keep developing on new blockchain!. I know few developers are planning to build dapps on old chain. ETC is at its launch. Give it a time
"All the businesses that have built on Ethereum will continue building on the new chain" vs ""planning" to build dapps on old chain". I wont argue that you are wrong as we both may very well be correct in this scenario. But why would one choose to develop on ETC when they could either A) develop on ETH or B) Stay fundamentalist but support another second gen VC that offer a strong development staff and similar innovations such as Lisk or Expanse. I am pretty sure any serious company would consider any other route less risky than using ETC to spend millions of development dollars on, from a business perspective it doesn't seem to make sense.
Congratulations @kilroy! You have received a personal award!
Click on the badge to view your own Board of Honor on SteemitBoard.
For more information about this award, click here
Nice post. Interesting to see I'm not the only one that is thinking about this. Many people say the prices of cryptos are high but we also thought that about Amazon, Apple and Facebok last year. Does anyone know about: https://www.coincheckup.com I don't know any other site that gives such good inisghts in the team, the product, advisors, community, the business and the business model, etc. Go to: https://www.coincheckup.com/coins/Ethereum#analysis To see the: Ethereum Report
Congratulations @kilroy! You received a personal award!
You can view your badges on your Steem Board and compare to others on the Steem Ranking
Vote for @Steemitboard as a witness to get one more award and increased upvotes!
Write good