With The Merge expected to arrive in September this year, Ethereum is also about to transition to a proof-of-stake (PoS) consensus mechanism. In this regard, Ethereum researcher Vivek Raman firmly believes that this will make Ethereum more scarce, so it is expected to Replacing Bitcoin as the “King of Cryptocurrencies”.
Vivek Raman said in an interview with the media, “From an economic point of view alone, due to the impact of supply shocks, Ethereum does have a chance to replace Bitcoin.”
Ethereum still relies on the “Proof of Work” (PoW) consensus mechanism for mining. Once the merger and upgrade is completed, Ethereum will transition to the PoS consensus mechanism.
In addition, the merger and upgrade will change the monetary policy of Ethereum, eliminate the mining mechanism, make the network more environmentally sustainable, and reduce the total supply of Ethereum by 90%. At that time, users will contribute or pledge tokens according to their own contributions. Validate the transaction amount to get rewards. Vivek Raman pointed out,
After the merger, the inflation rate of Ethereum will be lower than that of Bitcoin. Especially in the case of fee consumption, ETH will go into a state of deflation, while Bitcoin will always be in a state of inflation, although the inflation rate will be suppressed with each halving.
Vivek Raman said that while Bitcoin will retain its function as “digital gold,” Ethereum will still have “greater room for adoption” as the base layer of the decentralized finance (DeFi) economy.
However, the merger upgrade does not reduce Ethereum’s high gas fees, which remain a major problem hindering Ethereum’s scaling. However, according to Vivek Raman, this is not a problem, as Ethereum will rely on the Layer 2 scaling solution to support the activities of most users. He says,
Users need to understand that all their activities should be on Layer 2, which will then eventually use Ethereum as the Layer 1 base layer for settlement, security, and decentralization.
Researcher of this article: Merger and upgrade will be the opportunity for “Ethereum to replace Bitcoin” first appeared on Blocker.