The Merge is Ethereum’s chance to take over Bitcoin, researcher says
The Merge is Ethereum’s chance to take over Bitcoin, researcher says
The Merge scheduled to take place in September will cause Ethereum Mainnet to shift to PoS
By Shashank Bhardwaj
Image: Shutterstock
Ethereum researcher Vivek Raman opines that Ethereum is looking to dethrone Bitcoin and take the position of the major crypto asset in its upcoming Merge upgrade. The Merge, an upgrade gearing to take place in September, would convert Ethereum from a proof-of-work to a proof-of-stake system, thereby reshaping its monetary policy. The new proof-of-stake consensus mechanism would make the process more environmentally sustainable and have large-scale effects on ETH’s supply, which is projected to decrease by 90 percent.
Raman said, “Ethereum does have, just from an economic perspective and because of the effect of the supply shock, a chance to flip Bitcoin. “ He added, “After 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.”
Stating that it is “one of the most impressive engineering feats in blockchain history,” Raman explained that widespread changes scheduled to happen as a part of the Merge upgrade in the Ethereum blockchain would allow it to be viewed as the more sustainable option over the long term. In his view, Bitcoin is among the likes of gold, which does not experience large movements over a period of time, thereby giving Ethereum the chance to establish itself as a more portable form of money and provide it “a larger adoption space”. He also suggested that Ethereum’s staking yield would attract institutions that want a yield to “earn validator awards and be part of a digital economy.”
It is important to note that the upcoming upgrade will not offset or affect Ethereum’s high transaction fees in any way, which has proven to be an obstacle preventing the crypto asset from scaling in the last couple of years. However, Raman stated that it should not be an issue since Ethereum would support most users’ activity by leaning on layer-2 scaling solutions.
Raman projected that transitioning to a complete proof-of-stake regime could allow Ethereum to potentially gain more value proposition than that of Bitcoin and establish itself as the eminent crypto asset.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
