More than just a couple of my friends asked me today – what the f@ck is going on with the cryptocurrency market. So I decided to write a short article about current events. If you are interested in Ethereum project, you may find it interesting. Disclaimer – I am not an “expert”! What I am trying to do, is describing current events to the best of my knowledge. I may be mistaken somewhere, but hope that you won’t hold it against me.
It all began while we were asleep. And by “we” I mean both European and US markets. Poloniex (one of the largest cryptocurrency exchange marketplaces) added ETC to listing, allowing users to trade it. If you weren’t observing latest events, you may wonder WTF is ETC? Allow me to explain.
After the hacker’s attack on the DAO (Decentralized Autonomous Organization) which resulted in the loss of 3.6m ether tokens, part of the Ethereum community decided to roll back, regaining lost tokens. The problem with that decision was that the hacker in fact did not break any rules, he just found a way to exploit them. So according to the original Ethereum’s “code is law” idea, that was a completely fair move. Also a forced attempt to “roll back” proved that the Ethereum is not 100% decentralized and is subject to manipulations.
As a result, not everyone in the community was ok with the “roll back” idea. Nevertheless, the “hard fork” was executed, basically meaning that attack on the DAO never existed. And the Ethereum project carried on, trying to forget about this shameful event.
However, part of the community still believed that the true Ethereum cannot be manipulated and tried to stick to the ETH Classic (ETC), the version of this cryptocurrency where the attack on DAO wasn’t erased and ignored. This part of the community didn't actually have any influence on the market because of it's minority. That was true until today. When Poloniex allowed users not only to trade ETC, but also added ETC to everyone’s wallets who owned ETH by the time of the “hard fork”, it gave ETC credibility (and free money of course :) ). Thus, ETC trade volume skyrocketed today causing roller coaster trading.
Next step was even more interesting - miners found out that while difference in price between ETH and ETC is 20 times, difference in mining difficulty is 100 times. That meant that mining ETC was 5 times more profitable then ETH. Guess what? Miners switched to ETC. Right now it stabilized, the difficulty in mining is more or less relevant to the price difference.
What will happen next? I honestly don’t know. But, I am sure as hell, that we will remember this date 24th of July. Thank you for reading this.