Ethereum Unlikely to Remain the Dominant Blockchain Operating System – BofA
2022.07.28 11:54
Ethereum Unlikely to Remain the Dominant Blockchain Operating System – BofA
By Sam Boughedda
BofA analyst Alkesh Shah released a note on Wednesday focusing on Ethereum‘s transition from a proof of work (PoW) consensus mechanism to proof of stake (PoS).
The analyst told investors the move “seems imminent with an Ethereum Foundation member stating that he tentatively expects the transition to occur in mid-September.”
The Merge, one of five planned Ethereum upgrades, will join Ethereum’s existing execution layer with the Beacon Chain, a PoS consensus layer.
Shah said, “PoS decreases Ethereum’s energy consumption by over 99%, lowers barriers to entry for investors to generate yield as network validators and alters ETH’s supply/demand dynamics.”
“The PoS transition also acts as a precursor for the ‘Surge,’ the second planned upgrade, which aims to improve Ethereum’s scalability from ~15 transactions/second (TPS) to ~100k TPS and decrease gas (transaction) fees,” added the analyst. “Our view is that Ethereum is unlikely to remain as the dominant blockchain operating system without near-term scalability improvements.”
