What Is Maximalism In Crypto And Is It Relevant In 2023?
One of the first cultural bugs (or features, depending on who you ask) that newcomers to crypto notice are maximalism: “Why do the Bitcoin people ban us from their Clubhouse rooms when we start talking about altcoins?” Why do Ethereum users refer to newer blockchains as “ghost chains”? Why isn’t their greater collaboration amongst the multiple blockchain core development teams?”
These are some of the questions that people have asked me at venues like Clubhouse. Even Urban Dictionary has a definition for Bitcoin Maximalist.
Maximalism in crypto, in my opinion, refers to a fervent, singular, and blind belief in only one blockchain. Crypto maximalism, like nationalism, racism, and other isms, is fueled by a fear-based emotional superiority complex. There is a legitimate concern that the success of other blockchains will result in a decrease in the value of their asset.
Maximalism is a cultural phenomenon that is not limited to cryptography. Other technologies that have come to market at the same time have historically been surrounded by dogmatic fervour.
A brief history of technological maximalism
For hundreds of years, technology has been dominated by maximalism. Inevitably, this maximalism has sparked disagreements among proponents of various technologies that strive to solve comparable problems in different ways.
Both DC and AC electricity were intended to bring power into American homes for the first time. On the other hand, the proponents of the respective technologies were total maximalists. Edison, in fact, secretly ensured that the electric chair was powered by AC power. Edison was then able to show the public pictures of the horrors that AC can cause! In particular, the 1880s’ War of the Currents, led by Edison and Tesla, was a particularly nasty conflict.
While not nearly as brutal, the battle for the consumer’s heart waged by Microsoft and Apple over the past two decades in the area of computing is nevertheless vividly remembered today. At the very least, these marketing campaigns used humor rather than a shock to reassure consumers about the shortcomings of alternative technology.
As these examples demonstrate, maximalism is far from a unique phenomenon in the cryptosphere.
Bitcoin during its heyday
Everything in crypto was rainbows and unicorns in the early days, such as in 2013. The crypto community was incredibly small then, and many early adopters had similar ideologies. Censorship resistance, privacy, and independence were all values held by many of the early Bitcoiners. In fact, instead of corporate conferences like Consensus, the Liberty Forum in New Hampshire, a conference for people who want to be free from government influence, hosted Bitcoiners every year.
Brilliant thread on the #Bitcoin community mindset. Monetary maximalism don’t demand technological maximalism. Indeed, absolutely the contrary, technological diversity and interoperability make #Bitcoin more strong and anti-fragile. https://t.co/ruHZpzcwJJ
— Diego ‘Aequalitatem Honoris’ Gutierrez-Zaldivar (@dieguito) September 5, 2020
To begin with, adoring Bitcoin was akin to adoring freedom. You didn’t have to dislike other blockchains just because you liked freedom. However, in 2014, as more people in the crypto world became aware of Vitalik’s ideas, this view began to shift.
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How maximalism in crypto gained traction
When Vitalik Buterin proposed using smart contracts on a blockchain, he thought the Bitcoin community would back him up. “A cluster of entrepreneurs and developers… [who] were trying to push Bitcoin’s limits and whether it could be used for more than digital currency… their efforts were known as Bitcoin 2.0,” Vitalik said (Infinite Machine, 40). Indeed, Vitalik Buterin was a passionate Bitcoin supporter, as proven by the fact that he co-founded Bitcoin Magazine. He wrote a lot about what Bitcoin could be used for.
Many members of the BitcoinTalk Forum wished Vitalik luck with his project when he first proposed it on the BitcoinTalk Forum. However, even as early as January 2014, many Bitcoiners were vehemently opposed to the Ethereum project, mostly for ideological grounds. Many members of the community have accused Ethereum of being a money grab, claiming that the technology adds no value to the ecosystem.
🔷If ETH Isn’t a Security Then Nothing Is🔷
“The Ethereum Project was announced on the bitcointalk forum in January 2014 by cofounder Vitalik Buterin. The announcement solicited “investors and evangelists” who would be protected by a “fiduciary team,” “https://t.co/Rbsf6Ap2nW
— John Carvalho (@BitcoinErrorLog) May 5, 2018
Vitalik felt impelled to publish a piece criticizing Bitcoin maximalism even before Ethereum launched when the idea for a new network based on smart contracts was gaining traction. Many in the Ethereum community are now calling Bitcoiners maximalists a slur to combat the perceived closed-mindedness. In this post, Vitalik questions the value of such a dogmatic viewpoint and whether Bitcoin maximalism is good for the crypto community as a whole.
Of course, the Bitcoin community did not pay attention to Vitalik’s viewpoint, and as Ethereum’s adoption grew, so made the Bitcoin community’s criticisms:
Of course, not all prominent Bitcoin figures believe that maximalism is the most effective way to evangelize users and developers to their cause. In fact, Andreas Antonopoulos, a leading Bitcoin educator, believes that Bitcoin maximalism is harmful to the ecosystem.
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How financial incentives can influence maximalism in crypto
I’ve talked to a lot of Bitcoin maximalists about this, and the justification I’ve gotten for their actions boils down to this: we need to protect new users from being scammed. Many Bitcoin maximalists point to the cryptocurrency market’s plethora of scams. There are plenty of areas Bitcoin maximalists can point to that create a less-than-acceptable picture of the ecosystem outside of Bitcoin, from unethical ICOs to rug pulls in DeFi to vaporware.
What’s more, you know what? All of these statements are correct! There are a lot of scammers in crypto, and having a technology that is resistant to censorship attracts a lot of them. That said, saying Bitcoin is bad because criminals use it to sell drugs and use the network for terrorist financing is the same thing.
At the end of the day, maximalism is primarily motivated by financial considerations. Why did Edison use AC electricity to power the electric chair and efficiently choreograph the killing of a criminal? Because Westinghouse, the company that invented the air conditioner, was Edison’s biggest rival! From Edison’s perspective, Westinghouse posed the greatest threat to his bottom line.
The largest reason for maximalism, in my opinion, is the financial motivations of advocates of specific technology.
However, I find crypto’s maximalism to be not only toxic but also entirely nonsensical. Ethereum and Bitcoin, unlike Microsoft and Apple, are not even in direct competition with one another. Bitcoin has definitely established itself as the network that will sustain the world’s most important store of value in the future. In contrast, Ethereum has evolved into a platform for decentralized apps.
I once tweeted a prominent Bitcoin influencer with this exact sentiment. His reaction to my question was that Ethereum and Bitcoin are in direct competition for a spot on the balance sheet. This argument effectively states that they must compete because ether and bitcoin are two distinct assets.
This logic, in my opinion, does not hold water. I believe Apple, a leading consumer products company, does not compete directly with Barrick, a leading gold mining company. Even though both of these companies have publicly traded equities, they are not direct competitors. Apple’s and Barrick’s business models, suppliers, and customers are all very different.