Post-merger era: Will Ethereum surpass BTC?

“The Ethereum merger is complete! This is an important moment for the Ethereum ecosystem. Everyone who helped realize the merger should be very proud.” After the completion of the major milestone merger of Ethereum, founder Vitalik Buterin (V God) posted on the social platform celebrate.

At 2:45 pm on September 15th, the long-awaited Ethereum “Merge” (The Merge) was completed, with a full transition from PoW to PoS. What will happen to Ethereum after this?

Roadmap next stop

Crypto lending platform Nexo said the new PoS consensus mechanism is not directly related to network capacity. Fees, whether gas fees or NFT minting, will not be affected, at least in the short term. Nonetheless, it’s important to note that #Merge is a key step in this direction and sets the stage for further gas fee reductions. Transaction speeds will remain largely unchanged. While some minor changes are to be expected, it’s likely that end users won’t notice them. The merger is not the last step for Ethereum. Instead, according to Vitalik, the combined network will be about 55 percent complete.

So, what’s next for Ethereum?

The roadmap shows that after Merge, Ethereum has four stages: Surge, Verge, Purge and Splurge.

The Surge:

Divide the entire network of the blockchain into smaller blocks. In the future, multiple shard chains will be able to conduct transactions and verifications at the same time, improving the efficiency of the entire Ethereum network.

The Verge:

Introduce the design of Verkle Trees to optimize data storage on Ethereum.

The Purge:

By eliminating historical data and eliminating technical debt, validators no longer need to use a lot of hard disk space for verification work.

The Splurge:

The coordination of the upgrade of the four different parts is aimed at building bugs and ensuring the smooth functioning of the network.
Most important right now, though, is the upcoming Ethereum Shanghai upgrade.

Previously, several major updates were planned for the Shanghai upgrade:

EVM Object Format (EOF): proposed by the Ipsilon team to improve the EVM without breaking the current contract, provide new functions for contracts deployed with specific identifiers, and keep existing contracts running.

Beacon Chain Withdrawals: EIP-4895 enables the Beacon Chain to process all or some of the withdrawals and count them in the execution layer, allowing validators to withdraw staking rewards and maintain the 32 ETH stake required by validators.

Second-tier fee reduction: Since the existing second-tier solution validates transaction data at the execution layer (L1), most of the end-user fees still come from the data storage at the execution layer. The developer proposes two solutions:

Reduced call data cost: Through EIP-4488, the L1 call data (CALLDATA) storage cost has been reduced from 16 gas per byte to 3 gas.

Sharding: EIP-4844 brings Ethereum closer to deploying full sharding. This proposal introduces Blob sharding transaction type, similar to mini sharding. All nodes need to verify blob data, but data blocks are only accessible for a limited time and not forever storage.

Other improvement proposals:

EIP-3651: Reduce gas cost of accessing COINBASE addresses.

EIP-3860: Limit initcode size, introduce Gas Metering.

EIP-3855: Reduce contract code size.

Ethereum core developer Marius Van Der Wijden said on the 16th that the core developers may agree to resolve the issue of pledged ETH withdrawals in the next “Shanghai” upgrade, but the specific content of this upgrade is still unclear. If there are too many upgrades in “Shanghai”, it may affect the test progress. For example, there are 10 changes in the “Shanghai” upgrade, so each change needs to be tested separately, and it is also necessary to test how the different changes interact and interact with each other. impact, which means that once the number of features included in the ‘Shanghai’ upgrade increases, the testing workload will increase exponentially, eventually causing the ‘Shanghai’ upgrade date to be delayed. Since the “Shanghai” upgrade will solve the withdrawal problem of pledged ETH, once delayed, it may affect the interests of pledgers and validators.

Beyond BTC?

Following the merger, the Ethereum narrative has changed and its token economic model has changed dramatically. ETH supply growth dropped significantly and a deflationary model kicked in. As Raoul Pal, founder of macro research agency RealVision, said on his social platform, PoS will bring positive changes to Ethereum. The biggest narrative for an Ethereum merger will be yield, not supply reduction, and the benchmark yield it offers will change everything.

From this point of view, Ethereum is generating more revenue and profitability, greatly improving its competitive position with Bitcoin.

Brett Winton, the new chief futurist at ARK Invest, said there is a perception in the market that Bitcoin and Ethereum are competing with each other, which is not true, and is actually even less true after the merger of Ethereum. Bitcoin itself is the most likely to win the currency revolution. The conservative nature of the protocol actually means that it has a good chance of replacing second-tier currencies as a medium of exchange over time. Compared with PoS, PoW is a more powerful decentralization mechanism. So all kinds of potential benefits and interesting things come up when Ethereum moves to Proof of Stake, but it actually makes the competing space more segregated.

Bankless wrote: “BTC is the most trusted neutral asset. Over the years, it has withstood dozens of failed attempts by organized groups to unilaterally modify Bitcoin’s underlying code and increase its node size. BTC’s reliability has become The intrinsic value proposition at its core. However, Bitcoin’s reliability does not mean that the asset will retain its value or be denominated in purchasing power or fiat currency. Rather, Bitcoin’s core design is not programmable, with any added value to the holder, Its mining cost structure leads to significant value leakage. That’s why, for Bitcoin, being reliable does not equal investable.”

Bankless pointed out that every major catalyst in the crypto market since 2016 has been driven by the promise or realization of a web3 application not supported by Bitcoin. So far, BTC has only benefited from a huge wave of “actually useful stuff” created by the Ethereum community (and a few others) . This is why BTC as an investment is unsustainable, why overtaking BTC is guaranteed, and why it is good for crypto – because it will eliminate the uninvestable asset that is our industry leader.

However, there are some objections in the market.

Paolo Ardoino, CTO of Tether and Bitfinex, said today that Ethereum is still not on par with Bitcoin as its narrative keeps shifting. Ardoino said: “Bitcoin is a form of money and Ethereum is stuck between claiming to be a form of money and being a platform, but ETH cannot compete with Bitcoin in terms of money because there is no fixed supply, And it’s not really a world computer yet, because it has a shared global state, so it’s too slow to scale.”

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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