Ethereum’s Shift to PoS will Pave Way for “Flippening” of Bitcoin
Because Ethereum is moving to proof-of-stake (PoS), a researcher working in the field of decentralized finance (DeFi) has proposed that the platform has the potential to unseat Bitcoin (BTC) as the most valuable cryptocurrency. A researcher by the name of Vivek Raman said in a Twitter thread that the impending merger between Ethereum and another platform might result in an improved economic structure for the smart contract platform. According to Raman, the transition to Proof-of-Stake (PoS) brings about decreased Ether (ETH) inflation, improved security, and establishes cryptocurrency as a digital bond.
Raman predicted that after the merger, the rate of inflation in ETH will drop to 0.22 percent from 4.3 percent. The researcher said that as a result of this change, the ecosystem would see a drop in issuance of 95 percent, which will place a cap on the total quantity of ETH that can be traded in a single day. The researcher went on to explain that following the merger, the platform will operate using improved security measures. Raman stressed, with the help of a paper written by Ethereum co-founder Vitalik Buterin, that it would be more expensive to launch an attack on the network once it operates on PoS.
In addition to this, Raman is of the opinion that the Ethereum merger will make it possible for ETH to supplement the use cases of Bitcoin by acting as a store of value and collateral. While Bitcoin will serve as a kind of digital gold, Raman contends that Ethereum will establish itself as a form of digital bond, and that the primary assets held by DeFi will be utilized as collateral.
The average gas costs required to conduct transactions on the Ethereum network dropped to $1.57 earlier this month, a value that was not seen until the year 2020. The reduction in gas prices continues the downward trend of NFT sales, with daily NFT purchases falling to one-year lows. This is the case since the NFT sales are directly correlated to gas prices.
Despite the low gas pricing on the network, there was a 200 percent rise in the number of people who registered for the Ethereum Name Service. This occurred at the beginning of the month of July when the ENS Dashboard showed a spike from 11,042 registrations to 29,727 registrations. The hoopla may also be related to the fact that the second-largest ENS auction took place during the same weekend that a wave of registrations took place.