Ethereum researcher Vivek Raman is convinced that Ethereum (ETH)’s upcoming transition to a proof-of-stake system will allow it to take the place of Bitcoin (BTC) as the most visible cryptocurrency.

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“Ethereum does have, simply from an economic standpoint and because of the supply shock effect, a chance to flip Bitcoin,” Raman said in an exclusive interview with Cryptooshala.

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The merger, the long-awaited upgrade that will complete Ethereum’s transition from Proof-of-Work to Proof-of-Stake, is due to take place in September. In addition, the merger will change the monetary policy of Ethereum, making the network more environmentally sustainable and reducing the total supply of ETH by 90%.

“After the merger, Ethereum will have lower inflation than Bitcoin. Especially with fee burning, Ethereum will be deflationary while Bitcoin will always be inflationary. Although with each division by half, the inflation rate is reduced,” Raman said.

While Bitcoin will retain its function as digital gold, Raman said Ethereum will still have “a wider acceptance space” as the base layer of the decentralized finance (DeFi) economy.

The merger will not reduce Ethereum’s high transaction fees, which are still the main problem preventing Ethereum from scaling. This is not a problem, Raman says, as Ethereum will rely on layer 2 scaling solutions to keep the majority of users active.

“Users need to internalize that all their activities should be done on layer 2, and then layer 2 will eventually use Ethereum as the underlying layer 1 for settlement, security, and decentralization.”

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