Ethereum Classic is a decentralized platform that runs smart contracts: applications exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference. Ethereum Classic fuels a new era in the digital world by transmitting value and information across the digital economy in a decentralized manner, supported by smart contracts, and unlocking value worth trillions of dollars in the process. After the DAO hack forced the Ethereum community to implement a hard fork, thereby restoring the siphoned funds to their original owners and wiping out any record of the theft, some participants in the Ethereum community who were against the direct interference with the Ethereum protocol decided to continue the original version, retaining the unaltered transaction history, which includes the DAO theft, and the foundational concepts of decentralization and immutability. Subsequently, the original version of the Ethereum protocol was renamed as Ethereum Classic and its underlying token as ETC.
We feel Ethereum Classic has the potential to displace traditional metal commodities, such as Gold and Silver, as an instrument to hedge against inflation and to preserve value, akin to Bitcoin, in the long run. Second, Ethereum Classic could well be the fuel that powers the next generation Internet of Things through its inherent smart-contracting feature. We discuss the potential market opportunity for Ethereum Classic in both the cases.
The Digital Store-of-Value Market Potential: As increasing number of investors are substituting gold for Bitcoin as an inflation hedge instrument, we believe Ethereum Classic could be viewed as digital silver or platinum given its store-of-value properties and applications in the digital economy. In addition, Ethereum Classic would be a valuable addition to a Bitcoin portfolio as its negative correlation with Bitcoin will improve risk-adjusted returns of the portfolio.
The Internet of Things Market Opportunity: As we move further into the digital age, we are going to witness a world where cars, refrigerators, toasters, etc. are connected to each other via the internet, not just humans anymore. According to McKinsey, the total economic impact of full-scale IoT is expected to be between $4 trillion and $11 trillion by 2025. Cisco believes that 99% of physical devices with IoT potential are still unconnected due to the lack of a common platform required to connect all the devices. We believe Ethereum Classic satisfies all the requisite properties to become the gas that powers Machine-Payable web system.