Grayscale Investments, the world’s largest crypto assets manager, has recently highlighted the reason why the price of Ethereum Classic (ETC) surged 103% between 13th March and 24th March 2022, compared to Bitcoin (BTC) gain of just 13%.
It can be recalled that ETC started the notable surge from $26 to a peak of $48.50. According to Grayscale, the renewed interest in Ethereum Classic (ETC) was likely initiated by speculation that the Ethereum merge expected to play out later this year may cause miners to move their hash power to the ETC network.
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A few days ago, it was announced that the merge to proof-of-stake (PoS) consensus mechanism has successfully occurred. This implies that the team may do the same on the mainnet before the end of the year.
The much-anticipated development is expected to disable Ethereum miners from earning block rewards with their existing setups and will need to find somewhere to contribute their processing power.
Currently, Ethereum Classic network is likely the first candidate for ETH miners because Ethereum Classic network has a long-term commitment to Proof of Work (PoW) and is a fork of Ethereum with very similar code.
Impact of miners on a PoW network, such as Bitcoin, Ethereum, and Ethereum Classic, can be observed through changes in hash rate, the average computational power used to secure the network per second.
There will be an increase in hash rate when more miners are mining on the network and decreases when they leave.
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Grayscale noted that since the merge testnet launch was announced, the ETC hash rate has increased slightly by relatively 1% from 15th March to 22nd March 2022, which indicates that Ethereum miners have not started migrating in numbers to the ETC network yet. However, it’s expected to play out later, due to the fact that the hash power from the Ethereum network has to relocate somewhere.
Grayscale believes that the migration of Ethereum miners to the ETC network will certainly boost its hash rate, which also represents greater network security and may lead to more confidence in the network.
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