Ethereum researcher Vivek Raman is convinced that the upcoming Ethereum (ETH) transition to a proof-of-stake system will enable it to take over Bitcoin (BTC) as the leading cryptocurrency.
“Only from an economic perspective and due to the supply shock effect, Ethereum has a chance to flip Bitcoin,” Raman said in an exclusive interview with Cointelegraph.
The merger, a long-awaited upgrade that will complete Ethereum’s transition from Proof of Work to Proof of Stake, is set to take place in September. Additionally, the merger will transform Ethereum’s monetary policy, making the network more environmentally sustainable and reducing the overall ETH supply by 90%.
Raman noted, “After the merger, Ethereum will have a lower inflation rate than Bitcoin. Especially with fee burns, Ethereum will be deflationary while Bitcoin will always remain inflationary. Even though the inflation rate has halved.”
While Bitcoin will retain its function as digital gold, according to Raman, Ethereum will still have “more adoption space” as a base layer for the decentralized finance (DeFi) economy.
The merger will not reduce the high transaction fees of Ethereum, which remains the main problem preventing Ethereum from scaling. This is not a problem, according to Raman, as Ethereum will rely on Layer 2 scaling solutions to support the activity of most users.
“Users need to know that all of their activity must be on Layer 2 and eventually Layer 2 will use Ethereum as a base Layer 1 for settlement, security and decentralization.”
Check out the full interview on our YouTube channel and don’t forget to subscribe!