Ryan Watkins is confident that the burning of fees will turn Ether into a deflationary asset. There is little certainty about when the Ethereum 2.0 implementation will be complete.
In recent days, Messari analyst Ryan Watkins spoke about Ethereum’s transition to version 2.0. He said that, when the process is complete, the price of Ether (ETH) could exceed that of Bitcoin (BTC), thus becoming the highest value crypto asset.
Watkins explained that Ethereum would move from the proof-of-work (PoW) model to the proof-of-stake (PoS) model, thus accelerating its transformation. He believes that, from that moment, the network would be more secure, its economy would gain momentum, and it would attract more users.
Regarding the possibility that Ether could become more valuable than Bitcoin, Watkins said that it could indeed happen. He predicts that the first step will be the update in July when the burning of fees will take place. He believes that this will contribute to making Ether more deflationary than Bitcoin.
Out of a total of 21 million BTC that there will be, around 18,658,168 units are currently in circulation. As for Ether, data from CoinMarketCap indicates that there are 115,113,616 units, although there is no preset total supply.
According to Watkins, Bitcoin is the cryptocurrency that started the revolution of decentralization of finance. However, he sees strengths in Ethereum that will help attract human and financial capital to build a stronger economy. In this regard, he mentioned the added value of the smart contract network that allows the development of multiple investment options.
The analyst highlighted the growth of the ecosystem of decentralized finance (DeFi), the impact of stablecoins, and the tokenization of art with non-fungible tokens (NFT), among others. He believes that these smart contracts have so much stored value that Ethereum is already the winning blockchain.
Ethereum’s Long Road to Version 2.0
Ever since the Ethereum blockchain emerged, it has used the same PoW mechanism as Bitcoin. However, the developers have spent years planning the migration to the PoS consensus, which may take several more years to complete.
The network will have to go through several phases and face multiple challenges, one of which involves fragmentation as part of the process. Even so, it will need to remain compatible with its smart contracts while it goes fully operational.
When the transition process to Ethereum 2.0 is complete, it will be possible to know the impact on the price of Ether. However, what is clear is the demonstration that miners plan to hold on April 1st. They will transfer all their hashing power to the Ethermine pool, one of the most important on Ethereum, opposing the burning of fees. By doing this, they will go against the protocol that Watkins regards as responsible for Ether being a deflationary asset.
In addition to the above, it is still necessary to observe to what extent Bitcoin will advance in its evolution. To do this, they will take into account that discreet log contracts (DLC) allow creating DeFi applications on the Bitcoin and the Lightning networks.
By Alexander Salazar
