Where does Bitcoin maximalism go from here?


You may have recently seen some of the unhealthy gut dramas engulfing the Bitcoiner”communityespecially around who is – and who is certainly not – a “maximalist”.

A Bitcoin maximalist, in the broadest possible definition, is someone heavily invested in Bitcoin who believes that Bitcoin is the only cryptocurrency that matters and that all other cryptocurrencies are, if not scams, distractions from this project. dignified and overwhelming.

The purpose of this project remains a subject of intense debate within the maximalist world: there are monetary theorists who believe that the “naturalness” of Bitcoinhardness» guarantees its future status as the world’s reserve currency; others think it should only serve as a buffer against government interference in the money supply; others who view the cypherpunk ideal of censorship resistance as the deadliest use case and disparage other cryptocurrencies primarily for relying on inferior security architecture.

It is this first group, the hard-money theorists, known as “toximaxis” because of their tendency to be aggressive on Twitter towards anyone who does not share their views, who are currently in crisis.

More recently, they harangued a perceived former ally, VC and essayist Nic Carter, after he revealed on Twitter that his fund, Castle Island Ventures, had invested in a company developing a wallet-based login feature that had nothing to do with Bitcoin. Maximalists fumed over the apparent betrayal of a prominent supporter. Carter joins with a Average position praising maximalism as a ‘disease’ and then was seen jokingly fraternizing with a fearsome ‘no-coiner’. It was all very childish and embarrassing.

But it wasn’t the first time that a prominent Bitcoiner, Carter surely is still – has actively sought to distance himself from a movement whose obsession with purity continually costs him the support of influential people who would otherwise be natural allies.

The group forever alienates other potential travellers: Tweeters Udi Wertheimer and Hasu fled in disgust not too long ago, and former hero Bitcoiner Nassim Taleb went so far as bitterly withdrawing its preface from a founding maximalist economic text.

Others softened their rhetoric. Alex Adelman, the CEO of Bitcoin-only shopping rewards app Lolli, now calls himself a “optimistic Bitcoin” and praised NFT culture at NFT NYC, and previously zealous maxi Dan Held says he is a “Most mallisted bitcoin.”

Not to mention the series of Bitcoin pioneers who have long taken a multi-faith approach to cryptocurrencies, such as Erik Voorhees, Roger Ver, and Jesse Powell. And then there are the pragmatists, like Carter and Anthony Pompliano, who see the alpha pushing the Bitcoin fanatic vanguard, until it turns against them.

There is also a clear sense that the project of hard money maximalism is cannibalizing itself, that there is a rot among its core adherents. It is noteworthy that many members of the core group itself, unable to resist an attractive market opportunity, have embraced schemes that would once have scandalized the virtuous.

For example, another former maximalist, Eric Wall, told me he left the movement when influential voices became “increasingly hostile” to his interest in bitcoin layer 2 chains called “drivechains”. , a way to explore “altcoin features” like smart and decentralized contracts. exchanges via bitcoin. Plans for the chain of transmission were eventually shelved for obscure technical reasons, and Wall looked elsewhere.

“That’s how I got out of maximalism,” he said. It was “the realization that the Bitcoin base layer was not going to power these cool features that we see on other chains, such as ZK-proof technology for scalability and privacy for example.

The irony was that these same people, mostly employees of influential developer Blockstream, then rolled out Liquid, an Ethereum-style “sidechain” network enabling token sales and decentralized finance on the Bitcoin blockchain, just as Wall had hoped. . When Ethereum exploded last year, Blockstream clearly wanted a piece of the action, marketing a series of NFT launches on the platform. just when the NFT market was really starting to fizzle.

The liquid has not really taken off. The majority of Liquid blocks have an average of one transaction: the miner paying for the privilege of verifying the block. The failure resulted from a “lack of human understanding,” Wall said. He added that Liquid developers, blinded by allegiance to Bitcoin, failed to consider frills such as user experience and product market fit. “You have to understand humans to understand why Liquid isn’t attractive. Blockstream only cares about its own anal arguments, it’s not how you impact the world. (Blockstream did not respond to a request for comment.)

Similarly, over the past few years, maximalists have backed platforms that allow the sale of Bitcoin-based tokens, and many defend centralized stablecoins like Tether, acknowledging their role in ensuring the capitalization and liquidity of Bitcoin. The breathless Support for authoritarian Nayib Bukele, the introduction of bitcoin as legal tender in El Salvador was a particularly infuriating sight.

All of this begs the question: are maximalists all too happy to betray their ideals when the opportunity arises? Have big gains made elsewhere in the crypto market corrupted them so easily?

Pete Rizzo, a former CoinDesk the editor who now works for crypto exchange Kraken and actively identifies as a maximalist (albeit of a subtly different ilk), told me that none of these constitute “rot” ​or a betrayal of principle: that it wasn’t tokens, NFTs, or stablecoins that were the problem. Rather, he said, the danger presented to retail investors lies in unregulated securities offerings on platforms like Ethereum.

“The criticism,” he said, “isn’t that non-Bitcoin tokens are inherently bad, it’s that they’re structured in such a way that liability is placed on retail investors. .”

NFTs actually originated from the Bitcoin Counterparty platform, he added (that’s true!), and the attempt to bring them to Bitcoin is hardly a great translation. “Bitcoin maximalism simply states that Bitcoin is the only decentralized cryptocurrency,” he said. “It’s the only one where value accumulation and exploitation occur equally, so it’s best to strive to rebuild everything on bitcoin (however long it takes), with the goal wished to bring as much as possible.”

Rizzo’s attestation of a deeply principled approach, however, is difficult to reconcile with the reality of the maximalists’ many side projects: their Supportfor example, for the aforementioned Tether, which runs on Ethereum and has always been less than honest with retail investors, or the key cases in which the maximalists have ostensibly not brought any innovation in which they are to Bitcoin. Who, for example, can forget the time when former Blockstream potentate Samson Mow, one of Carter’s top critics last month, argued – wait for it – a Ethereum token!

Rizzo argued this the token was only accessible to accredited investors and posed no risk to small retail investors, but then you have to ask yourself: where do these people draw the line? Is it about valuing Bitcoin’s use case above all else? Or to ensure that all crypto innovations only work on Bitcoin? Or that the retail business is not shorn? What about the whole country that was fleece by Bukele’s aborted “Bitcoin link”?

Then there is the overabundance of beautiful promises and Byzantine prediction models that, one after another, have crumbled: the famous “stock-to-flow” modelnon-stop “halving off” hype, bitcoin as “inflationary hedge” as “digital money” each ends up being abandoned when the predictions don’t come true. Other so-called maximalist tenets, such as an aversion to state interference, are just as unnecessary: ​​Recently, maxis including billionaire Bitcoin bull Michael Saylor called for regulators to shut down competitor networks like Ethereum, even if they try to profit from knockoffs.

You must be wondering what maximalism means, if anything. In Rizzo’s view, the current strain of hard-money maximalism has little in common intellectually with the anarcho-capitalist ethos of free trade that spawned it, and Rizzo observes that good many of the most proudly libertarian bitcoin extremists like Ver and Voorhees left long ago with the explicit intention of pursuing other opportunities. The remaining core embraced a quasi-theological lifestyle brand version of the entirely stripped-down ideology of libertarianism and its temptations, peddling seed oils and keto diets and tradwives. Obviously, they are meddling with the broader crypto markets as well, but only under the guise of an array of abstruse justifications.

At best, this particular brand of “maximalism” is now a threadbare weathervane ideology, one that sells and rebrands with every market correction. Like the girl group sugababes and its fungible members, the doctrine is only form and null content. It is an empty ideal that means nothing lasting – rigid enough to instill devotion, but mercurial enough to survive the inevitable betrayals of its most “toxic” adherents.

This is why I believe Bitcoin maximalism will last forever.

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