Ethereum Classic (ETC +22.44%) is one top-50 cryptocurrency project that many investors may have forgotten about. The original Ethereum (ETH +4.93%) proof-of-work blockchain (which was forked in years past as Ethereum looked to shift toward a proof-of-stake model) is still powered by the same mining consensus mechanism that Bitcoin and other crypto projects operate with.
Thus, with most of the activity attributed to Ethereum taking place on its proof-of-stake chain, Ethereum Classic's appeal has dwindled, as has its token price over the past year.
Still down on the year, Ethereum Classic's 28.9% surge as of 1:05 p.m. ET Friday suggests this token may move back into the green on the one-year chart as momentum starts to pick up for this legacy blockchain project.
Let's dive into what's driving the investment thesis around Ethereum Classic today.
CRYPTO: ETC
Key Data Points
Investors are looking for proof-of-work alternatives
I've seen a number of pieces from notable crypto experts in recent days touting Bitcoin alternatives, the volume and likes of which I haven't seen in some time. To a certain extent, I don't really know what's fundamentally driving this outsize investor demand for Bitcoin alternatives. But for projects like Ethereum Classic that look and feel a lot like Bitcoin (with greater application development potential), I think that's an intriguing thesis to consider.
Image source: Getty Images.
The idea that Ethereum Classic could benefit from a back-to-the-future trade in which crypto purists shift their focus back to proof-of-work tokens once again is a compelling argument, though I'm still skeptical. The amount of energy used to power networks such as that of Ethereum Classic is astronomical. And given the sort of compute and power required for other mega trends, such as artificial intelligence (AI), to play out, there's an argument to be made that these legacy networks could be a thing of the past sooner than investors think.
That said, the security and durability of Ethereum Classic's blockchain are impressive, and that's driving strong trading volume (around $150 million daily) on this network. If we see solid growth on this front, maybe the narrative will shift back. That could be what's happening right now. I'll be sure to provide more updates as they come, but this high-momentum move is one I'm going to be watching.
