Ethereum researcher Vivek Raman is convinced that Ethereum (ETH) the upcoming transition to a proof-of-stake system will allow it to take over from Bitcoin (BTC) position as the most important cryptocurrency.
“Ethereum has, purely from an economic perspective and due to the effect of the supply shock, a chance to topple Bitcoin,” Raman said in an exclusive interview with Cointelegraph.
The merger, a long-awaited upgrade that will complete Ethereum’s transition from a proof-of-work to a proof-of-stake system, is expected to take place in September. Additionally, The Merge will transform Ethereum’s monetary policy, making the network more environmentally sustainable and reducing the total supply of ETH by 90%.
“After the merger, Ethereum will have lower inflation than Bitcoin. Especially with fee burns, Ethereum will be deflationary while Bitcoin will still be inflationary. Although with each halving, the inflation rate decreases,” pointed out Raman.
While Bitcoin will retain its function as digital gold, according to Raman, Ethereum will still have “a larger adoption space” as the base layer of the decentralized finance (DeFi) economy.
The merger will not reduce Ethereum’s high transaction fees, which remains the main issue preventing Ethereum from growing. This is not a problem, according to Raman, as Ethereum will rely on Layer 2 scaling solutions to support most user activity.
“Users need to learn that all of their activities should be on Layer 2, and then Layer 2s will eventually use Ethereum as their base Layer 1 for settlement, security, and decentralization.”