While the recently issued coins for the Bored Apes NFT collection have captured the attention of the cryptocurrency world, a throwback offshoot token has been surging.
While the recently issued coins for the Bored Apes NFT collection have captured the attention of the cryptocurrency world, a throwback offshoot of the second-largest digital token has been surging even more in value. Ethereum Classic, created after a 2016 software change for the most-used blockchain, has jumped more than 80% in the past week. ApeCoin has increased around 70% during the same period, according to price data on CoinMarketCap. It has also gained more than the rest of the top 100 tokens by market value.
The 26th-largest cryptocurrency — now valued at around $6.5 billion — is climbing amid speculation that another software update to Ethereum will drive advocates of the existing method of how it is mined to the coin.
Ethereum has also gained ahead of the update, which is projected to take place later this year. Called the Merge, the change will take Ethereum from a system called Proof of Work, in which miners order transactions using powerful computers, to a system in which people’s staked coins perform the same function. The last test before the Merge is initiated began on March 15, and appears to be running smoothly. As migration to this so-called Proof of Stake happens, Ethereum’s miners will soon need to take their costly mining equipment elsewhere — and Ethereum Classic expects to be one of the biggest beneficiaries.
“Welcome Disenfranchised Ethash Miners,” Ethereum Classic’s developers wrote in a recent blog post. “This Merge event will disenfranchise the largest EVM’s Proof of Work mining ecosystem. Ethereum Classic is well positioned to absorb much of this abandoned Ethash hashrate.”
Ethereum Classic got started when some Ethereum miners refused to upgrade their software to reverse a hack that impacted an Ethereum project called the DAO back in 2016.
If more miners switch to Ethereum Classic, increasing its network power called the hashrate, that should increase the network’s security. With more miners on board, executing so-called 51% attacks becomes harder. In a 51% attack, more than half of miners can collude to try and mess up the network’s transactions, allowing for double spending of the same coin, for instance. Additional miner support could also potentially boost the price of Ethereum Classic’s coin, as broader ranks of miners hold and trade it.
“Ethereum Classic is rallying due to the positive indication that Ethereum is getting close to the Merge,” said Sasha Fleyshman, a portfolio manager at Arca. “Ethereum miners, GPU and ASIC alike, are scrambling to make their hardware productive; the narrative being established is that miners (if applicable) will point their miners towards the Ethereum Classic network, thereby growing hashrate and strengthening the network. In that sense, the network ‘benefits’ – it becomes harder for it to be compromised.”