Ethereum researcher Vivek Raman is convinced that Ethereum’s (ETH) imminent transition to a proof-of-stake system will allow it to take the position of Bitcoin (BTC) as the most important cryptocurrency.
“Ethereum has, only economically and due to the effect of the offer shock, the ability to flip Bitcoin,” Raman said in an exclusive interview with Cointelegraph.
The merger, a long-awaited update that will complete Ethereum’s transition from a proof-of-work system to a proof-of-stake system, will take place in September. Additionally, The Merge will transform Ethereum’s monetary policy, making the network more environmentally sustainable and reducing total ETH supply by 90%.
“After The Merge, Ethereum will have lower inflation than Bitcoin. Especially with the fees burned, Ethereum will be deflationary while Bitcoin will always be inflationary. Even if, with each halving, the inflation rate goes down,” Raman pointed out.
Although Bitcoin will retain its function as digital gold, according to Raman, Ethereum will still have “wider room for adoption” as the base level of the decentralized finance economy (DeFi).
The merger will not reduce Ethereum’s high transaction fees, which is still the main problem preventing Ethereum from scaling. This isn’t a problem, according to Raman, as Ethereum will rely on Tier 2 scaling solutions to support the business of most users.
“Users need to learn that all their businesses should be on level 2 and then level 2 will eventually use Ethereum as the base level 1 for settlement, security and decentralization.”