Vivek Raman (ETH researcher) believes that Ethereum’s (ETH), upcoming transition from a proof-of stake system will allow it to overtake Bitcoin (BTC), as the most popular cryptocurrency.
Raman, in an exclusive interview with Cointelegraph, stated that Ethereum has, from both an economic perspective as well as because of the effects of the supply shock, the potential to flip Bitcoin.
In September, Ethereum will receive the long-awaited Merge upgrade, which will complete its transition from a proof of work to a proof/of-stake system. The Merge will also transform Ethereum’s monetary policies, making it more sustainable and reducing ETH supply by 90%.
“After The Merge Ethereum will experience lower inflation than Bitcoin. Particularly with fee burns Ethereum will have lower inflation than Bitcoin. Bitcoin will remain inflationary. Raman pointed out that with every halving of the inflation rate, it goes down.”
Raman said that Bitcoin will continue to function as digital gold but that Ethereum will have “a greater adoption space” as the base layer in the decentralized finance economy (DeFi).
Merge will not reduce Ethereum’s high transaction costs, which are still the primary issue that prevents Ethereum from scaling. Raman says that this is not an issue as Ethereum will continue to rely on layer2 scaling to support most users’ activities.
“Users should learn that layer 2 is where they should conduct all their activities. Layer 2s will eventually use Ethereum as a base layer 1, for settlement, security, and decentralization.
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