Ethereum Classic, the original Ethereum chain, has been growing by leaps and bounds in the past two years. From a forgotten pre-fork to a fast-growing player with significant external financial support and interest, Ethereum Classic has undergone serious rebranding and is preparing to enter the world of IoT and other promising technologies. Given the amount of news and expected updates, we decided to contact the ETCDEV development team and ask them about what was happening. We spoke with ETC Cooperative Director Anthony Lusardi and his ETCDEV colleague, Darcy Renault, about the current status of the ETC and the band's future plans.
Interviews with ETC Cooperative and ETCDEV
Correspondent: First, I would like to thank you for agreeing to talk with me about Ethereum Classic. Could you first give a general description of how the project is developing this year?
Darcy, ETCDEV: Things are going well. Our team is growing - today 10 people work in ETCDEV. The processes are getting better, the release of Emerald Wallet V1 is already very close, SputnikVM is very stable.
Anthony, ETC Cooperative: Everything is going well. I must say that in IOHK, too, quite a few people are working on the development of ETC. On the part of the ETC Cooperative, we are actively involved in information activities, began to give more interviews, launched a new version of the site, and are working on several interesting projects with the Ethereum Foundation (PeaceRelay). In addition, Ethereum Classic received good coverage in the upcoming book by Andreas Antonopoulos "Mastering Ethereum" ("Mastering Ethereum").
Corr.: One of the most important changes in the Ethereum Classic network is LiquidationA liquidation is a sale of cryptocurrencies, usually forced, as a result of an investor's inability to secure a minimum margin for their leveraged position. Notorious for their volatility in the market, cryptocurrencies can quickly and easily lead to liquidation, especially when investors lose their leveraged positions and their investment plunges into negative balance, requiring them to sell crypto assets when a position is forced out. This usually happens in cryptocurrency margin trading, when investors borrow money from a crypto exchange or broker to increase their funds or assets for trading. While leveraged trading positions can lead to higher potential profits, this is a very risky move that could lead to liquidation if the price of the asset drops sharply and you lose your initial margin or equity. If you do not have enough funds to continue trading and cannot meet the minimum margin requirements for your leveraged position, the exchange may automatically close your position, resulting in a permanent loss of funds from your initial margin. This liquidation loss can be partial or total, depending on the initial margin and the extent of the price drop. A partial liquidation occurs when a position is partially closed at an early stage in order to reduce the position and the investor's leverage, while a full liquidation occurs when almost all of the initial margin has decreased due to a price drop. To better illustrate the liquidation process in cryptocurrency margin trading, here is an example: Suppose you start with an initial margin of $100 and 10x leverage. This means that your total trading position is $1, of which $000 is borrowed from an exchange or broker. The amount of leverage corresponds to the size of your profit or loss from the position. With 10x leverage, a 5% increase in the price of an asset will give you 50% profit. The same goes for a 5% drop in the price of an asset, which will result in a loss of 50% of your initial margin. The formula for calculating profit or loss is as follows: Initial Margin × (% Price Change × Leverage) = Profit/Loss. Based on the above calculation, a 10% decrease in the price of an asset will result in a loss of 100% of your initial margin. Before you lose all of your initial margin, you can get a margin call when the liquidation threshold is reached so you can decide if you want to add more equity to your margin to keep your position open (or lose your initial margin entirely when the exchange or the broker will automatically liquidate your position). When you force-close a position, the exchange or broker may charge you a liquidation fee, but you can avoid this fee if you close the position before it is liquidated. Liquidations often occur when investors are tempted by higher leverage, which can potentially bring them greater profits, but do not consider the possibility of incurring large losses, which can also lead to liquidation. Therefore, it is very important to apply smart crypto trading strategies in order to avoid liquidations, whether starting with lower leverage or carefully monitoring margins and liquidation prices. Using a stop loss order is another way to limit your losses as the order will automatically close the position for investors when it hits the stop price to prevent further losses. Investors may also consider using exchange insurance funds to protect themselves from excessive losses. complexity bombs. Could you tell us a little about this process, including how much work this step required, and if there are any other complexity bombs that need to be removed in the future?
Darcy: A “complexity bomb” was included in the code to force the Ethereum network to transition to PoS (or the adoption of other changes, such as a change in monetary policy). In ETC, this mechanism was initially suspended, but now it is completely removed.
Anthony: I will add: there were no other “complexity bombs” in the ETC code, this was the last fix of this kind.
Corr .: According to the roadmap, this year in Ethereum Classic a technology called sidechains should be implemented. Could you tell us a little about what it is and how Ethereum Classic intends to use them?
“We want to scale ETC by providing the business with a separate network, more flexible, with the option of mutability ...”
Darcy: Sidechains are, in fact, private blockchains for business, which give third-party developers the opportunity to include their applications in the blockchain, but in compliance with business-important rules and with more accessible consensus mechanisms like PoA. They are suitable for web and mobile applications, the operation of which is based on transactions, and we are currently working on an experimental version - proof of the concept's working ability - together with the global cloud credit system OpenStack Foundation. We want to scale ETC to provide a separate network for the business, more flexible, with the option of mutability to match GDPR and support for other functions demanded by business.
Corr .: The roadmap also talks about the upcoming SputnikVM release. What are the main functions of this virtual machine and how would you explain them to a non-expert audience? Will this virtual machine offer any significant advantages or improvements over what Ethereum or other similar blockchain projects can offer?
Darcy: This is a new implementation of EVM (Ethereum virtual machine) written in Rust, the changes are purely technical at the moment, but in the future it will be optimized specifically for working with low-power embedded devices (IoT).
“SputnikVM makes the ETC network compatible with as many devices as possible.”
Anthony: If in the simplest words, then SputnikVM makes the ETC network compatible with the maximum possible range of devices.
Corr .: In the past few months, several decentralized applications (dApp) have been launched on the Ethereum Classic platform. In light of the upcoming release of the dApp SDK, will this help increase the number of applications and projects that choose Ethereum Classic to launch instead of other similar platforms?
Darcy: We hope so. Today, there is a clear lack of tools for developing applications. Application developers have no desire to delve into code at the protocol level. So platforms with good SDKs and APIs have a better chance of adoption. We also take a more proactive attitude towards the development of the developer community. Now it is quite small, but we are only at the beginning of the journey.
Corr .: I would like to know your opinion for what reason. Over the past two years, several competing projects have been created aimed at providing the same service that Ethereum offers - a customizable and programmable blockchain with support for decentralized applications, on which you can also create new tokens. First of all, of course, Ethereum and Ethereum Classic, but there are also QTUM, Lisk, Cardano, Stellar, Neo and many others. Do you think there will be enough space on the blockchain market for these competing projects to coexist, or do you expect some of them to be forced to cease to exist or merge into one project?
Darcy: To be honest, we have not yet seen much competition in this area. ETH and ETC seem to me to be the only proven projects focused on ready-to-use code. ETH focuses mainly on the legal side of contracts, such as contracts between people, while ETC focuses more on inter-machine communications. We believe that ETH and ETC actually complement each other, and we have yet to see significant products from other projects.
Anthony: I agree. We see many bright sites and attractive advertising, but so far there is very little real competition. Neo, for example, is an Ethereum clone with a centralized consensus mechanism. Stellar, although an interesting project in terms of payments, is written in a Turing-incomplete language, Cardano is not decentralized at the moment, Qtum's quantum “resistance” is not what can be called the main market need at the moment, but about Lisk I honestly not well informed. Ethereum-based software appears to be the most mature software in this area.
Corr .: Several official sources said that Ethereum Classic will continue to work with the current Proof-of-Work mining system and is not going to switch to alternative algorithms like Proof-of-Stake. With this in mind, what do you think will happen to the hashing power and economics of Ethereum Classic mining when all current Ethereum miners start looking for a new cryptocurrency? Do you expect them to migrate to Ethereum Classic?
Darcy: This is of course just speculation, but we expect ETH hash power to be distributed to other blockchains proportionally and starting from those projects Mining in which it will be most simple and profitable for them. Given that we have removed the difficulty bomb, the effort to migrate miners from ETH to ETC will be minimal. Therefore, we expect a significant amount of hash power.
"The war with ASIC seems to be lost ..."
Corr .: And as far as mining is concerned, will Ethereum Classic take any steps to secure the network from ASIC mining, now that Bitmain has created ASIC miners compatible with Ethereum Classic? Conversely, if Ethereum Classic does not plan to maintain ASIC resilience, would a sudden increase in mining activity in Ethereum Classic be beneficial to the network, harmful, or perhaps not at all significant in your opinion?
Darcy: Without specific numbers, this is difficult to judge. The main problem, obviously, is that Bitmain is currently the only ASIC manufacturer. We are not for or against ASIC, but we would like to see more competition in the ASIC miner market. Our position is not to panic, to monitor the speed of hashing and, if necessary, to make changes based on data and feedback received from the community.
Anthony: I agree. The fight against ASICs seems to be lost, and this is likely to lead to an increase in the centralization of ASIC mining rather than a decrease, since only the most well-funded ASIC manufacturers can afford to resist attempts to make ASICs unusable. The more manufacturers and the more Ethash mining hardware available, the better the network's long-term prospects for decentralization will look like. If you are a manufacturer of mining equipment, we would be happy to talk to you.
Just the beginning?
Although Ethereum Classic did not grow by leaps and bounds, from the moment of its creation, it still has a long way to go before reaching a level of acceptance comparable to other large projects like Bitcoin or Ethereum.
At the same time, the group is not without external support. ETC Cooperative just recently announced it has received $ 250 in funding from the Digital Currency Group to support the platform's continued growth and development.
Additionally, IOHK and Cardano's Charles Hoskinson appear to be fully supportive of the project, and the company plans to host a second ETC Summit in South Korea this year.
So, despite the number of technological and marketing obstacles ETC faces, it certainly seems prepared enough to overcome these obstacles. ETC