Will Ethereum take over Bitcoin position after the Merger

By: Ikenna Odunze

Will Ethereum take over Bitcoin position after the Merger

July 25, 2022 12:27 PM

The transition that's about to take place, of Ethereum to a proof-of-stake consensus mechanism, will greatly change its monetary policy, with the possibility of making Ethereum more scarce than Bitcoin.

 

Vivek Raman, an Ethereum researcher, is certain that the upcoming transition of Ethereum to a proof-of-stake  (PoS) system will make it able to take over BTC's position as the number one cryptocurrency.

 

The long promised upgrade (The Merge) that will conclude Ethereum’s transition from a proof-of-work to a proof-of-stake system, is fixed for September. Ethereum’s monetary policy will change greatly, due to the merge, which will make the network more environmentally sustainable and cutting down on Ethereum’s total supply by 90%.

 

“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,” pointed out Raman.

 

According to Raman, while Bitcoin retains its function as digital gold, Ethereum will still possess "a larger adoption space" as the base layer of the DeFi economy.

 

Ethereum’s high transaction fees won't be cut down by The Merge. And the transaction fee is an obstacle keeping ETH from scaling. According to Raman, it's not a problem, as Ethereum will depend on layer-2 scaling solutions to support most user's activity.