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Experts shared their opinion on the prospects for a fork of the Ethereum network and talked about what awaits the token of the ETHW project in the near future
The Ethereum update, expected on September 15, will mean the cessation of mining of the largest altcoin by capitalization. Part of the community advocates the branching of the blockchain and supports a version that will preserve the possibility of mining cryptocurrency using the Proof-of-Work (PoW) protocol.
The famous Chinese miner Chandler Guo initiated the development of such a version of the blockchain called EtherumPow (ETHW). The project team has already announced the launch of a mining-supporting chain in the near future after updating the main Ethereum network.
Experts told RBC-Crypto what prospects await this version of Ethereum that supports mining, and what will happen to the new ETHW token.
Failure or development?
Any project has a chance to succeed, says BitRiver financial analyst Vladislav Antonov. He recalled that the Ethereum Classic (ETC) cryptocurrency also appeared as a result of the hard fork of the main Ethereum network on July 20, 2016, and since then it has been mined through mining and traded on the market.
According to the expert, now UTS acts as an alternative token for miners who remain with equipment (designed to mine cryptocurrencies using the Ethash algorithm, which is different from the bitcoin mining algorithm). According to various estimates, investments in equipment for GPU mining in the amount of about $ 15 billion, says Antonov. He is sure that Ethereum miners are ready to support any hard fork to try to mine Ethereum POW. If they are not satisfied with the profitability, then they will switch to other coins, the analyst believes.
It cannot be argued in advance that ETHW/ETHPOW is doomed to failure, Nikita Zuborev, senior analyst at the Bestchange.ru, agreed with the previous expert. He also noted that, most likely, in terms of scale, we will see something similar to the story of the split of ETH and ETC.
According to the expert, the fork of Ethereum will receive the support of a significant part of the developers, and some crypto-exchanges in an attempt to make money “on hype” add futures for a new potential project. Most likely, the fork is viable, but its future will depend on further actions of the community, the analyst believes.
Fate of the project
If the community continues to develop the ecosystem at least with the same zeal as the followers of the ETC did, then the new token will have good prospects, Zuborev suggested. Perhaps there will be gateways with the same Ethereum Classic and Polygon, which will add liquidity to the project, with the proper approach it will be possible to make ETHW an analogue of the PoW sidechain for the basic Ethereum, the expert believes.
“The main factor of potential success is the possibility or inability to continue to support the DeFi infrastructure and attract new projects to your blockchain. Centralized finance is the main fuel for the Ethereum community, without them the project will become a useless second-rate altcoin, “Zuborev is sure.
On the other hand, the specialist suggested that in a negative scenario, the new branch could become an illiquid useless token supported only by a small group of enthusiasts. And its price will be pressured by large sales of Ethereum owners who had a non-zero balance before the split. Duplication of funds (distribution of ETHW tokens when launching a PoW network) is one of the main threats of the planned fork, according to the analyst.
The price prospects for the token are very ambiguous, says Zuborev. In his opinion, most likely, immediately after the physical launch of the “new old” chain, a powerful “Pump-and-Dump” scheme can be expected, after which the price will stabilize and continue to grow moderately as the number of followers increases.
“Despite the fact that there is almost no doubt about the launch of ETHW / ETHPOW, we would still not recommend buying futures for a project whose fate is under great question and serious community pressure,” the analyst warned.
According to him, the safest option to take part in this fork is simply to withdraw your funds and / or buy a simple Ethereum to a non-custodial (over-the-counter) wallet shortly before the fork. Then the classic implementation of the fork will simply “give” the owners new ETHW tokens after the separation, and with them you can do whatever you want, said Zuborev.
At the same time, the financial analyst of BitRiver drew attention to the fact that BitMEX launched a futures product based on ETHPoW tokens, and after its launch, the price is atfell 83% to $16.30. Volumes in the market are low, investors and speculators ignore the token, since the risks of losing money remain, Antonov explained. In his opinion, you need to look at the dynamics of the pair after updating the Ethereum network and starting to mine a new ETHPoW token.
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