Whew! I took a "Mini-Hiatus" from the writing game for a day or two, and now I feel like a lazy fat ginger man. Well, I am a lazy fat ginger man, so there you go. It's in my nature, don't yell at me. I'm sensitive.
OH, big shout out to CryptoSorted, they recently gave me a cool opportunity to gallivant around their webspace with a dick opinion, so I'm really happy about that. Follow them. Read them. They're up-and-comers and I think they have a lot of moxie. Oh and check out my FIRST POST with them! Everything you see there is EXCLUSIVE SkinnerCrypto Material. Hope you like it.
So, I figure stirring up the shitstorm makes for good conversation. Not only that, it's also fun to really see how passionate people get about a particular subject. If you read the title, you know exactly what I'm about to do. I'm gonna be talking about Bitcoin Maximalists. More specifically, I'm gonna tell you why I think Bitcoin Maximalists why they miss the mark further than Helen Keller at a Shooting Range.
Definitely Going To Hell For This Joke.
But Wait... What The Hell Is A Bitcoin Maximalist?
A Bitcoin Maximalist is a person who thinks that the only cryptocurrency that matters - forever and for all time - is the one that started it all. In short, here's a few impressions I have from researching them (In no order whatsoever, and without bias as much as possible):
1.) Because of Metcalfe's Law, Introducing More Coins in The Space is hindering Bitcoin Adoption. Those who invest in "Altcoins" are being taken away from the network and preventing mass adoption of bitcoin.
2.) Getting Investors to build trust in the crypto space is difficult, especially with all the shady ICOs and scams that have come out of the woodwork in recent years.
3.) Bitcoin is All That Matters, It Works, and If you don't like that, then you're probably falling for a scam. See number 2.
4.) It's difficult to diversify investment with altcoins because most of them trend with Bitcoin. Just Stick with Bitcoin.
That's at least the major points I have gleaned from the maximalists. Obviously this is not an exhaustive list, nor is it completely indicative of all the motivations. But, in order to make this as fair as possible, I'm going to direct you to a couple folks in the industry, such as Chris Derose, who made an explanatory video on bitcoin maximalism (TRANSCRIPT HERE) and this article pretty fairly covers come public statements and fair points from some really interesting influencers in the space. Cool stuff, honestly. A lot of these guys know their stuff and I have no beef with them. HAVING SAID THAT, I still think that a laser tight focus on bitcoin is wrong. Now for the meat and potatoes.
The Economics are Ass Backwards When You Consider BTC's Original Motivation.
Everyone knows that Bitcoin has a finite, fixed supply of 21 million coins. No more, no less. Presumably, bitcoin is supposed to be a currency - meaning that it should have a relatively stable value in order to be a store of value. Because of the limited supply, it is inherently deflationary and will continue to rise in value over time.
Hold up, why the HELL is that a bad thing? Shit, that's a GREAT thing, right? Certainly, if you're an investor or a speculator. But, what if you wanna buy a loaf of bread with bitcoin? The volatility just by basic economic standards makes it an infeasible option for use as an everyday currency. In fact, some people have argued that it may not even be easy to have a stable price of bitcoin, just by its very nature. I have argued this point before.
Does that mean it CANNOT happen? No. It could, but the protocol would have to be fundamentally changed in order to allow a higher total supply. That's... a problematic thing, and I'd wager that many maximalists might have trouble with this. Now, it might be possible that the total supply could be in principal static, and that the fractional nature of bitcoin could be leveraged. For example, I imagine it could be possible for people to shift the goalposts and say, consider half an original bitcoin to be the new standard. In effect, people could be talking about BTC as half its price and double its supply. Why go one way when there's so much room at the bottom? What would we even call that? Like... a "Re-quantification"? Redefine the BTC to be say 50 million Satoshis instead of 100 million.
In any case, there might be solutions, but I figure the effort might overtake the efficacy with BTC if the goal is to make it a stable synthetic commodity. And while BTC introduced blockchain and basically created the Wild West we live in today, there's just no easy way to make it stable with a fixed supply.
There's Improvements to Be Made.
Anyone can tell you that while Bitcoin is the highest market cap and THE MARKET in many ways (more on that in a bit), there are some fundamental flaws with it that makes it rather untenable. The first of course, is the STUPID RIDICULOUS amount of energy it takes to mine bitcoin. Good God Almighty, Look at these Damn Numbers! That's crazy! Bitcoin's PoW protocol is not that efficient.
Also, the Transactions per Second (TPS) for bitcoin is nearly laughable at between 3 and 4. Compare that to Visa's thousands per second. This is ultimately the bottleneck with making Bitcoin something that everyone uses; Scalability is gonna be HARD.
Also, it may be the case that there are several fundamental improvements that can be made to distributed ledger technology, such as Directed Acyclic Graphs (See my FIRST CRYPTOSORTED ARTICLE for more details) that increase both energy efficiency and speed.
In short, I think to consider the first implementation and iteration of a new technology to be the "end-all-be-all" is at the very least, hubris. Think of it this way; The Model T was the first major mass produced vehicle ever made. For its time it was a hell of a car, but to compared to today's cutting edge vehicles, it is a relic. With the exception of collectors, I would consider it REALLY weird if someone came to me and said, "The original Model T car by Ford should be the only one people use". In fact, if this happened I don't know if I would shit myself, laugh, or do both simultaneously. We have better stuff now! Why not use that?
The rebuttal to these complaints would seem to be something akin to "sure, BTC has its problems, but that's why we need to implement layer-2 technologies that can help it do better!" The most popular of these layer two solutions is the Lightning Network. In a nutshell, it is using smart contract scripting to set up "microchannels" and settle transactions on the blockchain less often, but maintains security of the transactions. Separate nodes are set up for the express purpose of doing this, and the blockchain is only directly often used for say, transferring BTC to cold storage. It effectively has the user interacting with these channels for everyday stuff instead of the blockchain itself. And... There seems to be a slow adoption of it for good reasons. This is one of those situations where it seems like instead of fixing the technology, it's tacking on some scrap metal to cover the holes. In short, it isn't very encouraging.
BTC Maximalism Stifles Innovation and Competition.
This is a big one. The network already has its technology in place, and while it might be possible to add to it for better performance like the Lightning Network, problems arise when people find better ways of getting things done. Developers are stuck with what they have, and it seems rather infeasible to say, get the ENTIRE NETWORK to fundamentally change after the fact.
Doing this would be like stitching a hole in your jeans, but then realizing you messed up halfway through and the only way to get back to the starting point would be to cut off the thread, pull it out and start over, or slowly but surely put the needle BACK through every single hole you made, and hope you don't get snagged in the process. Then, if by some chance you actually succeeded, you'd probably be so jaded and world-weary, you would sign up to take a ride on the Euthanasia Coaster to put yourself out of your own misery.
YEAH, It's a Real Thing.
Furthermore, imagine if the maximalists were successful. No other chains. No other technologies or improvements. No nothing. BTC would be all that there is, and we would be hopelessly reliant on it for all of our Crypto Adventures. Having another competitor come into the space would be akin to having a "mom-and-pop" shop take on Walmart. We all see how that panned out. So, the lack of competition could inevitably lead us to the first problem, where innovation stagnates and we don't ever see much of nothing improve. I don't really wanna live in a world like that. It would be a Crypto Dystopia.
Oh, and remember Metcalfe's Law? Sure, there could be more value and more connections made in the network the more it grows, but if there's competition, consumers are likely going to go for the best technology available. That doesn't happen in a BTC-only world.
The shit train has reached its destination, and it's time for you to get off in the comments and tell me how goddamn stupid I am. I will probably agree, but there are a lot of points here that makes it seem absolutely inevitable that other blockchains and tech would eventually arise to challenge Bitcoin. That's what happens in Captialism and a free market; people find better ways to do things and then try to make a living by making it a reality for everyone. Why would we not want that? Sure, it has its own problems in and of itself and I won't deny it, but I think the alternative is much bleaker than the current Zetigeist, even with all its flaws. Fortunately, it seems that as things are going, the maximalist is probably in the minority, and Crypto is a huge diverse space for all kinds of fun shit to happen. I like it.
Thank you SO much for reading, I really appreciate it. If you enjoyed this post, please consider checking out some of my other stuff. Follow me if you want more!
Also, if you'd like to help keep this train rolling with minimal effort on your part, please consider joining me on the Storm Play App and use my referral code: 5IQEJZMX
Until Next time, keep your eye on the markets, and buy something other than Bitcoin. Not financial advice.