Ethereum researcher Vivek Raman believes that Ethereum’s (ETH) upcoming transition to a proof-of-stake system will allow it to take over Bitcoin’s (BTC) position as the most prominent cryptocurrency.
“Ethereum has a chance to flip Bitcoin purely from an economic standpoint and because of the impact of the supply shock,” Raman said in an exclusive interview with Cointelegraph.
The Merge, a long-awaited upgrade that will complete Ethereum’s transition from a proof-of-work to a proof-of-stake system, is scheduled to take place in September. In addition, The Merge will change Ethereum’s monetary policy, make the network more environmentally sustainable and reduce the total supply of ETH by 90%.
“After The Merge, Ethereum will have lower inflation than Bitcoin. Especially with fee burns, Ethereum will be deflationary while Bitcoin will always be inflationary. Although the inflation rate falls with each halving,” Raman pointed out.
While Bitcoin will retain its function as digital gold, according to Raman, Ethereum will still have “a wider acceptance space” as the base layer of decentralized finance (DeFi).
The merger will not reduce Ethereum’s high transaction fees, which is still the main problem preventing Ethereum from scaling. According to Raman, that’s not a problem as Ethereum will rely on Layer2 scaling solutions to support most users’ activities.
“Users need to learn that all their activities should take place on Layer 2, and then Layer 2s will eventually use Ethereum as the base Layer 1 for settlement, security and decentralization.”
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