Miners flock to Ethereum Classic in anticipation of the Merge

Over the weekend, the price of Ethereum Classic (ETC) added a whopping 51%, having breached the 50-day exponential moving average, one of the key bullish indicators.

Ethereum, the second largest cryptocurrency, is set to transition from the proof-of-work consensus mechanism to a more environmentally friendly proof-of-stake through the network upgrade called “Merge.” Since April 2022, two blockchains have been running alongside a PoW mainnet and a PoS test chain. The Merge will join them into one unified blockchain.

According to data shared by the founder of Week in Eth news, Evan Van Ness, the Merge is scheduled to go live in mid to late September. Miners, however, have already started migrating to other PoW cryptocurrencies. For instance, a decentralized storage coin Arweave recorded a 37% spike in hash rate over the past week, while Ethereum Classic has seen a 41% increase in its hash rate. The latter is expected to be the main beneficiary of the Merge, as only a minor update is required to switch from ETH to ETC mining.

Ethereum Classic emerged in July 2016 after the fork was initiated in response to the DAO attack. Hackers exploited a security vulnerability in a smart contract, draining over 3.6 million ETH. Over 85% of the community voted to fork the network, so the stolen funds could be transferred from the faulty contract to a new contract. However, some miners refused to fork because the DAO incident wasn't a defect in the protocol. They stayed on the original chain, which was renamed Ethereum Classic.