An Answer to Ethereum or Ethereum Classic

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.

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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