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Tag #Ethereum Classic

Inferno picks: ETC update

A couple of weeks ago we wrote about what was going on with ETC, warning that the situation is rarely as straightforward as it first seems. Now we have some updates…

 

Two weeks ago we posted an Inferno article about Ethereum Classic. ETC has always been an interesting project, as the ‘original’ Ethereum whose community chose to maintain the integrity of their ledger in the wake of The DAO exploit. They chose to uphold the principles of blockchain over short-term financial gain.

 

The immediate cause for concern in this episode was ETCDEV, a major developer for the platform, running out of funds and closing operations. But – as ever – there was more to it than it first seemed. In our last article we wrote:

 

1) The counter narrative. The community does have dev funds; those who hold them have suggested they were willing to help, but that a formal request was never received. There is an implication of a fallout, and ETCDEV unnecessarily shutting up shop.

 

And indeed, it transpires that the move was part of a power play to seize control of ETC development. The situation evolved, in true crypto style, into a battle of information conducted over public forums. (In fairness, the nature of crypto means this is often the best way to address matters and inform the community; the other side of the coin of engaging the grassroots is a lowest-common-denominator approach to conflict resolution.) But under the ‘he-said, she-said’ nature of it all, there’s a clear take-home message.

 

In short, the group representing the broader ETC community states that Digital Finance Group – a blockchain business group and hedge fund, managed to gain control of the code repo.

 

DFG replied with this post, claiming that their intentions were not malicious, but that the lack of coherent development and infighting in ETC had prompted decisive action.

 

A representative from ETC quickly fisked the reply, stating that – amongst other things – DFG had never been a part of or consulted the ETC community, and had not communicated adequately (if at all) with other developers.

 

At this point, the situation starts to appear somewhat clearer. A finance group saw an opportunity to grow an investment by taking a closer interest in a project, and made a move. That, at least is the simplest explanation given the posts above. Whether or not it took place with intentional malice is unclear. We should bear in mind Occam and Hanlon’s razors, which are, respectively:

  1. The simplest explanation is usually the best
  2. Never attribute to malice that which is equally well-explained by ignorance or ineptitude

 

Together, they can be summarised as Inferno’s Razor: Never attribute to competence that which can adequately be explained by incompetence.

 

In other words, casual greed, thoughtlessness, standard-issue human selfishness and short-sightedness are usually better explanations than careful, premeditated malice. Most people can screw things up pretty well just on the fly; they don’t need to think too carefully to manage that. Obviously, we can’t rule out malicious conspiracy, it’s just that it’s not necessary most of the time.

 

To finish, let’s take a brief excerpt from ETC’s Declaration of Independence from Ethereum when it first formed.

 

We will continue the vision of decentralized governance for the Ethereum Classic blockchain and maintain our opposition to any centralized leadership takeover, especially by the Ethereum Foundation as well as the developers who have repeatedly stated that they would no longer develop the Ethereum Classic chain.

 

We likewise will openly resist the “tyranny of the majority,” and will not allow the values of the system to be compromised. As a united community, we will continue to organize for the defense and advancement, as required, for the continuation and assurance of this grand experiment. The Ethereum Classic platform, its code and technology, are now open to the world as Open Source software.9 It is now freely available for all who wish to improve and build upon it: a truly free and trustless world computer that we together as a community have proven and will continue to prove is anti-fragile.

 

There aren’t many cryptos that have a properly decentralised network or governance process. Bitcoin’s development is slow, inefficient, arduous and messy because it is one of the few that do. It’s also the biggest and most robust store of value by an order of magnitude. It’s anti-fragile. Ethereum has proved it’s not. Ethereum Classic made a commitment to maintain that ideal.

 

In the light of that declaration, any attempt of any kind to gain control of the platform (at least, by any means other than hashrate), for any reason, whether that reason seems good or bad, is

 

The.

Most.

Colossal.

Facepalm.

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Inferno picks: Ethereum Classic

The ‘True Ethereum’ has always been interesting, but now it’s in trouble. What lies ahead?

It seems that every year holds at least one defining moment for crypto, and sometimes more. One of 2016’s critical events was the hack of The DAO, a decentralised, investor-directed fund that raised a then-unprecedented $150 million in ETH – around 7% of all the ETH in existence at the time.

This article does not constitute investment advice. Traders and investors are encouraged to do their own due diligence.

When a hacker found a way to compromise the smart contract and drain tens of millions of dollars from the fund, the Ethereum community was left with a quandary. Take the hit, or fork the blockchain to fix the problem. The first would impose enormous losses on investors; the second would compromise the integrity of the blockchain. Never again could Ethereum claim to be a permanent, immutable ledger.

The community – more specifically the miners who control the network – went for the second option. A vocal minority continued to maintain the original chain. The blockchain forked into two: the majority hashrate chain kept the title and brand, Ethereum, while the minority and ‘true’ chain ended up being known as Ethereum Classic (ETC).

Classic didn’t have the devs or funding of Ethereum, but it’s always been interesting because its community upheld one of the key principles of blockchain, and didn’t fold to pressure from investors. The DAO’s funds were lost to investors in that version of reality. Ethereum’s pragmatism in recovering funds over upholding the integrity of the chain have been glossed over ever since. ETC is Ethereum, unedited.

Anyone who held ETH at the time of the fork automatically received the equivalent amount of ETC, and while ETC has never enjoyed ETH’s market cap, it’s always been high on CoinMarketCap and had substantial trading volumes.

Trouble ahead?

Now, ETC is struggling. A recent tweet from ETCDEV – one of the leading dev teams for Ethereum Classic – has announced they are shutting down due to lack of funds. The tweet states that the market downturn, combined with a ‘cash crunch’ in the company, has done for them. ETCDEV CTO Igor Artamonov says they appealed to investors in the community for funds, and to external investors, but nothing was forthcoming. Game over?

Now, the situation doesn’t look great for ETC, with the loss of one of its major developers. Technically, too, ETC isn’t in great shape. Volumes have dropped, it looks like it’s painting a bear flag, and recent support has been broken. Down would not come as any surprise. But let’s take a look at the other side of the coin.

1) The counter narrative. The community does have dev funds; those who hold them have suggested they were willing to help, but that a formal request was never received. There is an implication of a fallout, and ETCDEV unnecessarily shutting up shop.

2) It’s a bear market. Everything is suffering. It’s not a valid approach to try to correlate news with the ups and downs of the chart.

3) There are other developers. ETCDEV is not the sole dev for Ethereum Classic. The project doesn’t just stall here.

4) Ethereum has been here before. Back in 2015, the pre-fork Ethereum was rocked by speculation and ultimately confirmation of a lack of funds. In the subsequent months, it did just fine.

TL;DR don’t write off Classic just yet. Sure, tough times may be ahead, but that’s true for most cryptos – and the ones that make it through the bear market will have been forged in fire.

Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.

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