ETC cuts finally come, but the dream of halving is broken

At 02:07 pm on March 17, the Ethereum Classic ETC ushered in a reduction in output at a block height of 10,000,000, and the block reward was reduced from the original 4 to 3.2 ETC (a 20% reduction).

This is ETC's second production cut. The first production reduction occurred on December 12, 2017. ETC reduced production at a block height of 5,000,000, and the block reward was reduced from 5 ETC to 4 ETC. It is expected that the third production reduction will take place in two years and four months, and the block reward will be reduced to 2.56 ETC.

As of press time, the QKL123 market shows that ETC is currently reporting at $ 4.62, with a 24-hour increase of 13.60%. The current ETC circulation is 117 million (total 210 million), with a market value of 558 million US dollars, accounting for 0.38% of the total market value of the digital currency market.

Reduced production prices

The reduction in production means that the number of mining rewards decreases, and the mining cost increases accordingly. In theory, it will drive up the price to offset the mining cost. From historical experience, price fluctuations may start early and gradually appear after halving. This was the case for ETC's first production cut.

In December 2017, after the first production reduction of ETC, the price doubled within 20 days, and then fell rapidly. In the interview with Babbitt, the head of ETC's Asia-Pacific Ji Kang said,

"The design of ETC's monetary policy is similar to that of Bitcoin, so the laws of production reduction are similar. After the first production reduction, ETC reached a high level in January 2018 and then fell with the broader market. Overall, the market after the production reduction Will be more volatile than before the cut. "

As the first mainstream currency to reduce production in 2020, price changes in the ETC production reduction cycle are naturally the focus of investors' attention. According to the QKL123 market, ETC rose from a minimum of US $ 3.36 on December 18, 2019 to a maximum of US $ 13.23 on February 6, 2020, with a maximum increase of 74.60%, followed by a decline all the way.

Unlike 2017, the black swan is frequent in 2020, the global financial markets are volatile, and the digital currency market is not immune. In this shock, on the darkest two days of March 12th and 13th, the ETC price plunged from the highest US $ 6.80 to the lowest US $ 3.01, with the largest drop reaching 55.73%. Since then, the market has been steadily rising.

Although the production reduction has arrived, the current performance of ETC in the production reduction cycle is not as expected, which may be a microcosm of the halving market this year.

Regarding the market trend after this ETC production cut, Ji Kang said to Babbitt that short-term investors (speculators) will pay special attention to the production cuts, and medium- and long-term investors will pay attention to the value of the digital currency itself. He says,

"From last year to now, the value of ETC has been greatly enhanced. First, institutional admission, some large institutions use ETC as a way of asset allocation; second, industry applications, UNICEF uses ETC as the underlying technology, and some physical stores use ETC payment; the third is the ETC Core core development team, three fork upgrades and other technological innovations. These have given investors confidence. "

Computing power changes

In fact, the people most sensitive to production cuts are miners. The data of QKL123 shows that the current network computing power of ETC is 12.71 (TH / s), and the difficulty of mining is 158.21 (T).

At present, more than half of the entire network computing power in the graphics card market is in ETH. In addition to "20% reduction in ETC mining rewards", this year ETH 2.0 will shift to the PoS consensus. The superposition of two events makes the calculation between ETC and ETH Force distribution has become the focus of attention of miners.

As can be seen from the figure below, most of the computing power of ETC comes from abroad, and only a few mainstream mining pools in China support ETC.


Figure: ETC mining pool power distribution

OKEx mining pool leader Alina told Babbitt that ETC computing power can be understood as the heavy asset support behind ETC, which has only increased by about 2 times since the same period. Such growth is certainly benefited from the rise in the price of the currency and the overall bullish expectations, but computing power is the indicator we should focus on, and higher growth can be considered a premium.

Looking back at the overall network computing power of ETC in the past month, from the highest point of 16.8TH / S to the current 10.8TH / S. During the period, there were many waterfalls. The computing power declined but did not halve, but the price dropped from 9 US dollars to 4.5 US dollars. Alina believes that this phenomenon can be simply understood as the defoaming behavior of the relative computing power of the currency. Because mining coins always accompany computing power costs, computing power costs can indeed be regarded as the basic support for a project.

Mining incentives to reduce production, will ETC computing power escape? If ETH2.0 is released, it is expected that the original ETH miners will directly switch to ETC mining, and its computing power will also increase significantly. Can ETC take over these computing power?

Alina said,

"It can be seen from the figure below that ETC does have the support of multiple parties to ensure that the production reduction process is smooth and excessive. Therefore, the current miners' mining ETC benefits have decreased, but they have not given up on supporting ETC's later development. I believe that ETC may still be the public The agency believes that the son of ETH to undertake computing power after the conversion of PoS. "

Picture 1

Ji Kang expressed the same view. He believes that after ETC cuts production, there will be a small amount of computing power to escape, but it will not have a great impact. Because some miners have a better understanding of the ETC ecology and have certain beliefs, they are planning ahead of time, rather than waiting for ETH2.0 to be transferred to PoS before choosing.

"It mainly depends on the mining input-output tables handed to the miners by the major mining pools. At present, the input and output of ETC and ETH are comparable, and the mining union considers it from its own revenue and technical feasibility. Force switching. "

basic introduction

The emergence of ETC originated in June 2016, and the Ethereum popular project The DAO was hacked. In order to redeem the investors ’losses, on July 20, 2016, Ethereum implemented a hard fork solution at the height of 1920000 blocks, and finally divided into two chains: one is the fork chain“ Ethereum ”and the other is the original The chain is "Ether Classic", and its tokens are ETH and ETC.

In October 2016, Ethereum Classic issued the Declaration of Independence, announcing independence;

In February 2017, the team of long-term contributors and volunteers of ETC was renamed the ETCDEV team;

In December 2017, the new monetary policy proposed by Ethereum Classic reduced the block reward by 20% every 5 million blocks;

In September 2019, ETC implemented the Atlantis hard fork to make it compatible with the Byzantine upgrade of Ethereum;

In January 2020, ETC implemented the Agharta hard fork to make it compatible with the Constantinople upgrade of Ethereum;

After March 2020, ETC will conduct a Phoenix hard fork to make it compatible with the Ethereum Istanbul upgrade.

Although there are many differences between ETC and ETH, there are many similarities on the technical level. The hard fork upgrade in the past year is to make ETC and ETH more compatible and interoperable in order to enrich the application scenarios and share Build ecology.