- >What Does It Mean to Be A Bitcoin Maximalist?
What Does It Mean to Be A Bitcoin Maximalist?
There are literally thousands of different cryptocurrencies in the world today. For new investors this can be quite daunting. Fear not, there is a philosophical standpoint that makes investing in cryptocurrencies much more simple. It’s called being a Bitcoin Maximalist. One of the most common questions new investors will ask themselves is “Which cryptocurrency should I invest in?”. The answer from a maximalists perspective is simply “What other coins are there?”. To a maximalist, there is nothing but bitcoin. All other coins are useless knockoffs of the supreme crypto overlord that is bitcoin.
Keegan Francis | Dec 9, 2020
The Degrees of Maximalism
Just like with the political spectrum, there are degrees of maximalism when it comes to bitcoin. One one side, there are the maximalists that are willing to accept that other cryptocurrencies have a use case. On the other side, there are maximalists who see bitcoin and only bitcoin.
A pure maximalist is someone who is a diehard bitcoin supporter. These individuals have a special label for anything that isn’t bitcoin. Shitcoins. This harsh term strikes frustration into the arbiters of alternative cryptocurrency projects. Pure Maximalists often call upon economic principles and theories of money to support their conjecture that bitcoin is the future of all money. (Store of Value, Unit of Account, Medium of Exchange). A pure maximalist holds only one cryptocurrency, bitcoin.
A pure maximalist recognizes certain unavoidable truths about the nature of cryptocurrency projects. One of the main truths is that all projects, except for bitcoin have a face. Ethereum has Vitalik Buterin, Ripple has Brad Garlinghouse, and EOS has Daniel Larimer. The creator of bitcoin has no face. That is, the persona of Satoshi Nakamoto is obscured to the point that they could be anyone. This is an important fact for pure maximalists. They use this fact to lend credence to the notion of bitcoin as a “people’s currency”.
There is often an aspect of anarchy built into the pure maximalist perspective. One may make the argument that most if not all world currencies are on the (albeit slow) road to failure. The pure maximalist perspective is that the adoption of bitcoin is the inevitable return to financial sanity. The experiment of fractional reserve banking, alongside FIAT enforced value was doomed to fail from the start. The only long term viable currency is one that is owned, operated, and used by the people of the planet.
Digital Gold Maximalist
A digital gold maximalist is one who believes that bitcoin is gold 2.0. They believe that the function and purpose of bitcoin is not to be money, but instead to be gold. Their belief compels them to invest in bitcoin, rather than gold in periods of economic unrest or uncertainty. This class of maximalism rejects the possibility that any other cryptocurrencies can perform the same gold-like function. An argument against bitcoin as digital gold, is that a new cryptocurrency with an even more scarce supply can be created tomorrow. The reality is that no other cryptocurrency has the head start that bitcoin does.
The momentum that bitcoin has gained in the decade that it has been around is staggering. The memes, and free marketing built up around bitcoin as a money, store of value, or digital gold are inumerable. Therefore all other cryptocurrencies are not really all that scarce, since one is simply a replica to one degree or another of the next. Bitcoin is the only scarce asset out there, because it is the one that has widespread acceptance as a digitally scarce asset, much like gold. A digital gold maximalist holds most of, if not all of their portfolio in bitcoin.
A soft maximalist is willing to accept that bitcoin is part of a broader cryptocurrency ecosystem, rather than being the whole ecosystem itself. This type of maximalist tends to be more flexible with their opinions, as they are open to the possibility that the purpose of bitcoin is not yet known. A soft maximalist allows individuals to decide what bitcoin is to them. Instead of insisting upon it being money or gold 2.0.
A soft maximalist may be open to recognizing the shortcomings of bitcoin (volatility, efficiency). In recognizing these shortcomings, they are open to the acceptance of other cryptocurrencies that solve these problems. For example, they may recognize the existence of a USD stablecoin as a non-volatile counterpart that adds stability to the broader cryptocurrency ecosystem. A soft maximalist is likely to diversify their cryptocurrency holdings. This diversification is based on utility, wherein they look to hold assets that perform functions that bitcoin cannot, i.e. speed in tx/s.
The Path to Maximalism
Most maximalists don’t start out that way. Coincidentally, a lot of maximalists follow a similar journey to arrive at the same conclusion. The path often begins with hearing about bitcoin, then learning everything you can about it. After learning about the shortcomings, the next logical step is to search for cryptocurrencies that are “more advanced” or “faster” than bitcoin. One will be tempted to move all of their holdings from bitcoin into projects that look like they have a brighter future. A lot of people get hung up on the inefficiency of bitcoin, or the slow transaction speeds. The path to maximalism means realizing that those aspects don’t matter near as much as acceptance as a currency does.
The reason why bitcoin is so successful is obviously not because of its shortcomings. The reason why bitcoin is successful is because it has gained tremendous bipartisan support from ordinary people and business. Bitcoin has not political views, nor opinions because it has no leader. Therefore the path to bitcoin maximalism is realizing that bitcoin was conceived in such a way that can never be replicated ever again. It was born in a small corner of the internet, and treated as a joke by most of the world for the first few years of its existence. Now that it has proven itself, and people understand it is not a joke, the copycats run rampant. Where are you on your path to becoming a bitcoin maximalist? What kind of maximalist will you be?