Hello all! Recently, Ethereum Classic (ETC) increased significantly in value. Though ETC is declining now and I don't believe that Ethereum Classic is likely to retain much value, the success of the Ethereum main fork is in cryptocurrency's best interest. The purpose of this article is to explain why the Ethereum Foundation should announce a plan to draw down its Ethereum Classic holdings, which it inherited from the initial Ethereum pre-sale. Doing so would accomplish a number of objectives that would further the development of the cryptocurrency industry, while also setting a precedent for the future and providing the Foundation with more financial resources for continued development.
Vitalik Buterin and the Foundation have made it clear that they intend to support more hard forks of Ethereum in the future, most notably to implement proof-of-stake and three second block times. Ethereum Classic was the first of what will eventually become many legacy blockchains, each of which is likely to be supported by a coalition of people with different objectives. Some will support the old chain on the basis of political ideology, some will try to profit by increasing the price of the old chain in bubbles and panics, and others will use the old chain to conduct replay attacks against exchanges and people like Coinbase who don't care.
Aside from the criminals who will conduct attacks, it's fine for people to make their own decisions about other chains. That said, any coin that is premined, as Ethereum is, has a unique opportunity to shape its future development by using the premined holdings to place sell orders that cap the price of old blockchains. The Ethereum Foundation should place a cap on the value of Ethereum Classic through a massive sell order, beginning immediately, and do so for the legacy chain with each successive fork.
First, while the majority of companies have indicated that they support Ethereum, and Buterin himself said that he will not support Ethereum Classic even if it were to increase in price above Ethereum, words are not as strong as action. The Foundation's sale of its coins, and the sale of their personal coins, would send a powerful message to businesses who are planning their strategies for the future of smart contracts. While Buterin's comments were enough to convince some to convert bitcoins into ETH yesterday, people who are skeptical of his character will be more convinced if the Foundation begins selling its holdings of Ethereum Classic.
Second, the developers of ETC themselves have made it clear that they follow a different philosophy than do the developers of Ethereum, and that they will be taking different development paths in the future. Removing the influence of the Foundation from old blockchains is also the right thing to do for the developers of those chains, so that they can direct development effort where they wish without interference from the Foundation hanging over their heads.
Third, the sale of the Foundation's holdings would raise needed capital to pay developers. The Foundation undoubtedly holds millions of dollars in Ethereum Classic right now, even with its falling value. The money can be converted into ETH, to demonstrate support for the currency and to be sold at a later time to pay labor costs. Given that ETH is already a more capable network than BTC, this is a golden opportunity to accelerate the development of ETH into the #1 blockchain.
Fourth, this particular case of ETC is different than future cases in that at least 1/8 (and possibly 1/5) of the currency is controlled by attackers, counterattackers, and various unethical people. As these coins leave the DAO and replay attack wallets, they will eventually make their way to exchanges to be sold. The Foundation has a moral obligation to see that the money on the orderbooks is used to do good in the world, rather than to reward people for ethically questionable activities. In addition, hackers would see the Foundation's action and adjust their behavior in the future, since they will realize that they will place themselves at risk of arrest for little gain. It seems that there is still insufficient outrage over the idea that thieves were able to overrule justice and turn something that was worth nothing into ill-gotten gains worth millions of dollars. People seem to be forgetting that this wasn't a "bailout" for an organization with a poor business model, but a recovery of stolen money.
Finally, the most important reason for liquidating the Foundation's holdings is because this time isn't the only time there will be multiple versions of Ethereum. Over time, there may be three, or four, or five old chains, each claiming to be Ethereum. Those old chains themselves will likely fork to implement features different from the main Ethereum fork. Neutrality is an untenable position when there are so many different versions of the same thing around. If nothing else, there would be a shortage of manpower to keep track of all the coins.
In conclusion, the purpose of any open source association is to take action to further the interest of the software's users. In this case, the most useful action the Ethereum Foundation can take to increase business owner and investor confidence is to eliminate its holdings on the Ethereum Classic and any future old-fork chains. In addition to restoring certainty and stability to the markets, selling unneeded coins would provide additional funds for development, would prevent unethical people from cashing in on their profits, would eliminate the Foundation's unwanted influence over people who clearly do not want to be associated with it, and would set a precedent for future forks that the same action would be taken to set a clear direction for Ethereum development.
There was plenty of time for debate and discussion. Every major poll, conducted using a number of different weighting methods for voting, indicated majority support for moving forward with ETH by users currently invested in Ethereum. While others are welcome to develop and invest in their chains as they see fit, the Foundation's job is to support one Ethereum blockchain, and it is time for the group to supplement words with action. Let those who support ETC go their own way without interference, and make a commitment to the support of one chain moving forward.
Thanks
