By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) - U.S. investment firm Grayscale Investments has launched the first private fund focused on ethereum classic, a blockchain platform, with a seed capital of $10 million, Barry Silbert, founder of the company's parent, Digital Currency Group (DCG), said on Wednesday.
The fund is called Ethereum Classic Investment Trust, with the initial capital provided by Silbert, DCG and Glenn Hutchins, co-founder of private investment company Silver Lake.
The new fund will track the price of ethereum classic, the sixth-largest digital currency in terms of market capitalization, totaling $419.1 million.
The coin powers a decentralized blockchain network in which developers can create different applications that can facilitate or enhance the transfer and sharing of information and value.
Ethereum classic (ETC) was built on the same fundamental principles as bitcoin: decentralization and immutability, which means that once data or information is placed on the blockchain, it cannot be changed.
On Wednesday, ethereum classic traded at $4.60 on digital asset exchanges, surging more than 200 percent over an eight-week period.
"We're excited about ethereum classic, as opposed to ethereum (ETH), because ETC has a fixed supply and the potential to serve as the smart contract and micropayment layer to the Internet of Things," Silbert said.
Smart contracts are self-executing transactions.
The internet of things, on the other hand, has become the buzzword for the technology community. Essentially, it involves connecting all kinds of devices such as cellphones, with an on and off switch to the internet.
This will be the second digital currency fund for Grayscale, which launched the Bitcoin Investment Trust in 2013, the only publicly traded bitcoin-focused U.S. security.
Ethereum classic came out of a split from the original ethereum blockchain platform created by Russian programmer Vitalik Buterin and launched in 2015.
A decentralized application was hacked on the original ethereum platform, losing millions of dollars in funding. That forced the network to undertake a "hard fork," creating an entirely new version of the ethereum blockchain, erasing any record of the theft and restoring the stolen funds to their owners.
The new blockchain platform kept its ethereum name, and the original version was branded as ethereum classic. Both ethereum and ethereum classic trade on digital asset exchanges.
The new ethereum has a larger market cap of $4.7 billion, with the token trading at $52.15 on Wednesday.
Blockchain, a ledger of transactions maintained by a network of computers, first burst into the scene as the technology underpinning bitcoin.