Today the cryptocurrency market is facing one of its most difficult stages so far. Ethereum and Bitcoin prices keep falling, transaction processing times remain low, mining rewards are falling, and suggested solutions for the issues of scaling and energy inefficiency are still far from implementation. This improvement go against the established expectation that the economy is about to undergo a fundamental shift, becoming more decentralized. Blockchain have long hoped to see – and help build – a world where cross-border transactions are instantaneous and free, where individuals can conduct their business without the control of any authorities, and where deals will not depend on trust between parties. It should be possible with blockchain.
WHAT IS ETHEREUM CLASSIC VISION?
The Ethereum Classic vision is an open-source, peer-to-peer, computing platform based on blockchain technology and the original Ethereum code. On like Ethereum, it provides a value token, or “altcoin”, called “classic ether” which is used to pay users for products and services, and as a transaction fee when using decentralized apps and smart contracts.
CURRENT MARKET PROBLEMS AND ITS SOLUTION
- Scaling. Ethereum recently processes only fifteen transactions per second, and long backlogs of transactions often form in the network. And since the Ethereum blockchain can only process one payment at a time, its total capacity is only as large as that of each computer in the network. Increasing the number of nodes cannot solve the issue, and as the number of transactions increases,processing times wil lincrease and gas fees will rise.
The solution is to switch from the Proof-of-Work consensus algorithm toProof-of-Stake (see below), but the transition is constantly being delayed, and there is no indication of when it will happen.
- Difficulty bomb. A very special piece of code has been introduced into Ethereum,making it progressively more difficult and less efficient to produce new blocks. But eventually it will become so inefficient and unprofitable that miners will abandon Ethereum and switch to other cryptocurrencies. All the operations within the Ethereum network will cease (this is known as the Ethereum ice age). The purpose of the difficulty bomb is to stimulate the transition to PoS; however,seeing as developers can not reach an agreement on when and how to execute the switch, the“iceage”is becoming an evermore probable scenario.
- Declining rewards. Miners’ rewards have been in decline fort he past year due torising complexity, a slump in cryptocurrency prices, and excessive control acquired by large mining pools. The leadership team of Ethereum has made the situation evenworse:in an attempt to make the network more efficient and win some time for the transition to PoS, the decision to decrease block rewards to 2ETH was made, provoking the anger of most miners.
FEATURES OF ETHEREUM CLASSIC VISION
The Ethereum Classic Vision aims to resolve the major issues facing Ethereum, including scaling, mining inefficiency, and high costs of data storage. The transition to Proof-of-Stake, described in Chapter one constitutes the key element of this plan, but a number of additional modules and features will also play an important role. This part introduces the solutions proposed by Ethereum Classic Vision, their advantages, and implementation plan.
ADVANTAGES OF ETHEREUM CLASSIC VISION
Energy efficiency. The PoW-based blockchains are notoriously inefficient when it comes to electricity. The bitcoin mining itself consumes 0.33% of the global energy usage-more than the whole country of Denmark (or any of other 150 countries, including most states of Africa). Electricity spent on just one bitcoin transaction could power an average household for a whole month.
A Fair distribution of rewards. Proof-of-Stake networks do not have block rewards–they offer only transaction fees to validators.While these are naturally lower than the standard block reward in ETH or BTC, the result of long-term profits can be compared to those obtained with PoW, since operational costs are so low. As a result, even a user with a basic $40 Raspberry Pi computer can become a validator, as long as he or she stakes enough coins (which will come out much cheaper than buying a miningrig).All users are put in equal conditions when earning rewards with a PoS system like Ethereum Classic Vision.
Decentralization. If Ethereum and Bitcoin claims to be decentralized, they are not. The creation of new coins in itself is evermore concentrated in the hands of large mining pools (according to some data,51% of the Bitcoin has hrateis already controlled by pools, with over 40% owned by Bitmain alone) .Independent miners without access to one economy of scale have all but lost hope to compete with large rights.
In conclusion, Ethereum Classic (and its value token, ETC) is the result of a long debate over how cryptocurrencies should handle disagreements within the community and data hacks. That doesn't mean it’s in any way a lesser entity than Ethereum. Differently, the community behind Ethereum Classic aims to make Ethereum Classic the best cryptocurrency on the market.
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