RV Blog How to Buy Ethereum Classic (ETC)

How to Buy Ethereum Classic (ETC)

How to Buy Ethereum Classic (ETC)

Ethereum Classic (ETC) is an Ethereum hard fork that occurred due to the DAO hack in 2016. The proof-of-work (PoW) Ethereum Classic blockchain maintains the original Ethereum code and a permanent record of Ethereum transactions before the cyber theft, which led to division within the original Ethereum community. ETC is Ethereum Classic’s native cryptocurrency.

Why Buy Ethereum Classic (ETC)

Ethereum Classic is currently receiving some renewed interest because of the Ethereum Merge. As a result, ETC’s price reached a four-month high of $45.51 on August 13, 2022, which was about one month prior to the Merge. At the time of writing this article, ETC was holding strong above $30. Some people are predicting that ETC will not sustain the current valuation despite its recent growth. That being said, are there still any reasons investors should be turning to ETC in the near future?

In September, Ethereum’s Merge happened, which made the blockchain completely shift from proof-of-work to proof-of-stake (PoS). This means Ethereum mining will no longer be possible, and miners’ profits will go to zero from one day to the other. Consequently, to keep on making revenues for themselves, these miners will have to look to alternative cryptocurrencies in order to keep their mining operations going.

Ethereum Classic is a possible alternative for Ethereum miners because it still runs on the PoW consensus mechanism. The blockchain has also received the stamp of approval from Vitalik Buterin, who recently suggested that PoW enthusiasts can migrate there to continue using their mining equipment after the Merge. As a matter of fact, Ethereum miners can easily start mining on Ethereum Classic since only minor upgrades are required.

Mining pools are already considering their options post-Merge. So far, ETC has attracted the attention of Antpool, which invested $10 million toward increasing the number of Ethereum Classic developers. Should more and more miners move over to Ethereum Classic post-Merge, the hashrate of the blockchain could increase and potentially lead to a continuous price increase further down the line. While there is no guarantee, such a scenario could be possible, nonetheless.

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What are the caveats?

So, while there are some reasons to consider Ethereum Classic and some prominent voices advocating for this, other industry experts are albeit concerned about how the situation post-Merge will play out. For instance, Colin Wu believes a 51% attack could happen if any of the leading Ethereum miners move to ETC. They would hold a significant share of the ETC hashrate, allowing them to control the network. If Ethereum Classic was indeed controlled and potentially sabotaged by miners after the Merge, the blockchain’s cryptocurrency would certainly stand to lose from it. As it stands, it would not be the first time Ethereum Classic would experience such an attack with its cryptocurrency taking a hit thereafter. The blockchain already faced some setbacks in the past when it was hit by a 51% attack in 2019 and several more in 2020.

Another factor that could disfavor Ethereum Classic after the Merge would be the creation of yet other forks such as ETHPoW for example. A group of influential Chinese miners has already announced that they will be trying to fork Ethereum once more, creating other PoW alternatives to Ethereum Classic. They could also be gaining hashrate, taking it away from Ethereum’s original fork. The more forks there are, the more competition there could be for Ethereum Classic after the Merge. After all, current speculation has it that there could be more than half a dozen Ethereum forks following the Merge update.  

How to buy Ethereum Classic (ETC)

Step 1: Choose an exchange

The most obvious place to buy ETC is a cryptocurrency exchange. Several different exchanges support Ethereum Classic. They include Binance, Gate.io, Coinone, Coinbase, Huobi Global, Bitfinex, and Kraken (note for US readers – some of these exchanges don’t permit US users, so check that first).

Step 2: Create an account with an exchange

Visit the website of your preferred crypto exchange (CEX) or download their app if they have one. Next, register an account and complete the know-your-customer (KYC) process to trade. It will be required of you to provide personal information such as name and address. At the same time, you will need to provide an official public document (driver’s license, ID, or passport) and upload a proof of address (utility or tax bill). If done correctly, this process will only take a few minutes.

After submitting the documents and receiving an initial approval, most crypto exchanges let you use the account right away. However, if you want to have each and every account feature available, you will need to go through extra identification. In terms of security, it is wise to activate 2-factor authentication as well as other safety measures (delayed withdrawals and withdrawals only to white-listed addresses).

Step 3: Fund your account

Add funds to your exchange account or connect one of the supported payment methods with your account. You can wire funds from a bank account, which will be free of charge but take a few business days to process. Another option would be to use a credit card, which comes with higher costs though.

Step 4: Purchase ETC

Buy Ethereum Classic directly from the exchange or create a limit or market order if this option is available. The crypto exchange will credit ETC coins to your exchange account. In most cases, ETC is traded against U.S. dollars and other major cryptocurrencies like BTC, ETH as well as stablecoins like USDC or USDT.

How to secure Ethereum Classic (ETC)?

After buying ETC, you need to decide how to secure your coins. Below are some options to consider.

Leave ETC on the exchange wallet

This is a convenient but risky option because crypto exchanges could be vulnerable to hacks. Also, the custodial nature of the exchange means that you do not have complete custody of your assets as private keys to your crypto assets reside with the exchange.

Transfer coins to a web/software wallet

A non-custodial software wallet (hot wallet) gives users full control over their assets. However, the risk of cyber theft remains. Popular software wallets that allow users to interact with the Ethereum Classic and store ETC in self-custody are Trust Wallet, Exodus, Atomic Wallet or ZenGo.

Transfer Ethereum Classic to a hardware wallet

Hardware wallets (cold wallets) keep crypto assets offline, protecting them from online theft. Examples of hardware wallets that support ETC are Ledger, Trezor, KeyPal, SafePal, and Ellipal. These types of wallets are recommended if users want to store bigger amounts of ETC.