Ethereum’s (ETH-USD) Merge upgrade is the talk of the month. It’s far and away the biggest crypto event investors have seen in years. And while the upgrade is certain to aid Ethereum’s growth and future prospects, there are plenty of other projects sharing the wealth. One of these is Ethereum Classic (ETC-USD), a sibling of — and close rival to — Ethereum. The ETC crypto is benefitting greatly from the Merge news, stepping in to accommodate users who might not be too keen on Ethereum’s proof-of-stake pivot.
The Merge upgrade is expected just next week, coming after a long two years of waiting and half a dozen delays along the way. With it, Ethereum should see a massive increase in performance. A change from proof-of-work to proof-of-stake will mean lower transaction times, lower fees and lower energy consumption of the network overall. In the next year, developers will roll out new performance upgrades enabled by the Merge, like sharding, which will break transactions into pieces for even faster throughput.
Ethereum’s pivot to proof-of-stake is good for almost everybody involved in the network, except for one demographic. With this change, crypto miners get the short end of the stick. Proof-of-stake removes the need for mining at all, with transactions running on staked crypto rather than the cryptographic hashing done by mining machines. This then eliminates one of the most popular modes of passive income generation on the largest layer-1 network in the world.
Mining Ethereum has become massively profitable, especially in the last year. So, many crypto miners are quite angry the cash cow is moving on to greener pastures. Now, they are looking elsewhere for income, and Ethereum Classic is filling the void.
Ethereum Classic Mining Activity Shoots Upward Ahead of Merge
Ethereum Classic has always been an adversary of Ethereum. From its founding, it has tried to distance itself from Vitalik Buterin’s crypto empire. This week, the contrast between the two becomes even starker as it embraces crypto mining whilst Ethereum shuns the practice.
Ethereum Classic came about in 2017 after the original Ethereum network was hacked and drained of many funds. One camp wanted to change the code that allowed the hack to happen, sealing up the cracks and slapping a shiny new coat of paint on the network. Another camp wanted no such thing, as it would compromise the very nature of the network. The former voted to hard fork from the original Ethereum protocol, becoming the Ethereum blockchain giant investors know today. The latter became Ethereum Classic, the network claiming to be the “true” Ethereum.
Obviously, Ethereum Classic users have no interest at all in the massive overhaul Ethereum is undergoing with the Merge. After all, if the community didn’t want to change in 2017, it won’t want to change drastically in 2022.
This morning, Ethereum Classic’s hashrate passed 48.6 terahashes per second. Hashrate is a measure of the computing power a network uses to process transactions, and it gives an idea of how much mining activity there is on a network. This figure seen by Ethereum Classic today represents a 133% increase over its hashrate in July.
Obviously, miners are starting to shift over to mining ETC in response to the coming death of ETH mining. The move is proving highly lucrative for ETC crypto prices, too. The coin’s movement from $31.81 yesterday to $41.43 today makes for a gain of over 30% in a single day. Volume of the coin is also surging by 260%.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.