Why ETC Will Benefit from Ethereum Switching to PoS
More and more signals are coming that September will be the culminating month in the long wait for the transition of Ethereum to PoS. Thus, the largest mining pool Ethermine with a combined capacity of 263 Th/s, which makes up a quarter of the entire computing power of the network, added a countdown panel for miners. Approximately on September 15, the pool will stop mining Ethereum and will not support clones, including ETHW (EthereumPOW).
Ethermine offers the participants of the pool to switch to mining other coins and, as an incentive, will provide a 100% discount on fees for participating in the pool. Among the alternatives are: Ethereum Classic (ETC), Ravencoin (RVN), Ergo (ERGO) and Beam (BEAM).
Judging by the hashrate feed, migration has already begun. In two months, the power of the Ethereum network has decreased by 18%. During the same time, the ETC hashrate increased by 90%.
ETC is the original chain, whereas the currently existing Ethereum appeared as a result of a hard fork and Vitalik Buterin’s unwillingness to put up with the hacking of the largest cryptocurrency fund The DAO in 2016.
ETC has received the support of a number of developers and miners, as its ideology is based on the key postulate of decentralization “code is law”. In other words, rolling back the entire network due to errors in a separate project is unacceptable.
The transition of Ethereum to PoS is seen by many participants as a threat to grow into an even more centralized and controlled by a narrow circle of people network. To create a node, you need to freeze 32 ETH (~$50 thousand). Since the amount is unaffordable for many, they will be forced to join betting pools. And it is much easier for financial regulators to put pressure on the aggregator than on individuals.
For example, one of the key players in the ETH2.0 market will be the Coinbase crypto exchange (NASDAQ:COIN), which already has a 15% stake in a deposit contract with a total rate of 2 million ETH. Coinbase is under the supervision of American regulators, so in the case of an order, it will have a difficult choice: proceed with censorship or disable the betting service.
And right now Ethereum is facing a precedent.
A Tornado Cash (TC) mixer was built on the basis of the blockchain, which was blacklisted by the US Office of Foreign Assets Control in early August. TC allows you to mix transactions in the public Ethereum network, as a result of which it is impossible to link the sender and the recipient. However, the passage through the mixer itself cannot be hidden. Now a number of crypto exchanges and DeFi platforms deny users operations or block accounts if coins involved in TC were used.
The situation sometimes comes to asburd, since no one finds out whether the mixer was used for criminal purposes. Moreover, the transaction cannot be refused, which means that any user can be compromised by transferring funds. After TC was blacklisted by the regulator, an unknown person sent 440 transfers to a number of cryptopers, including government officials, the head of Coinbase and the creator of TRON, Justin Sun. Due to the transfer, the latter’s wallet was blocked on the Aave DeFi platform.