Ethereumâs imminent transition to a proof-of-stake consensus mechanism will transform its monetary policy, potentially making ETH more scarce than Bitcoin.
Ethereum researcher, Vivek Raman, is convinced that Ethereumâs upcoming transition to a proof-of-stake (PoS) system will enable it to take over Bitcoinâs (BTC) position as the most prominent cryptocurrency.
âEthereum does have, just from an economic perspective and because of the effect of the supply shock, a chance to flip Bitcoin,â said Raman in an exclusive interview with Cointelegraph.
The Merge, a long-awaited upgrade that will complete Ethereumâs transition from a proof-of-work (PoW) to a proof-of-stake system, is set to take place in September. In addition, The Merge will transform Ethereumâs monetary policy, making the network more environmentally sustainable and reducing ETHâs total supply by 90%.
âAfter The Merge, Ethereum will have lower inflation than Bitcoin. Especially with fee burns, Ethereum will be deflationary while Bitcoin will always be inflationary. Although, with every halving, the inflation rate goes down,â pointed out Raman.
While Bitcoin will retain its function as digital gold, according to Raman, Ethereum will still have âa larger adoption spaceâ as the base layer of thedecentralized finance (DeFi)economy.
The Merge wonât reduce Ethereumâs high transaction fees, which is still the main issue preventing Ethereum from scaling. That is not an issue, according to Raman, as Ethereum will rely on layer-2 scaling solutions to support most usersâ activity:
âUsers need to learn that all of their activities should be on layer 2 and then layer 2s ultimately will use Ethereum as a base layer 1 for settlement and security and decentralization.â
https://cointelegraph.com/news/the-merge-is-ethereum-s-chance-to-take-over-bitcoin-researcher-says