Making a Bitcoin Maximalist
By Wes Carlson on ALTCOIN MAGAZINE
Following the huge economic value Bitcoin generated as a decentralised cryptocurrency, understandably the incentives are very high to try and replicate or clone it. There are currently over 2000 listed cryptocurrencies and tokens listed on coinmarketcap.com, each touting their “unique” features. Behind the plethora of cryptocurrencies and tokens are project teams that profess to be creating innovative products or services to solve one problem or the other. Majority of these teams are apparently trying to create the next Bitcoin. The bitcoin maximalist, however, disagrees and basically considers Bitcoin the only cryptocurrency that matters when it comes to sound money and achieving dominance.
Perhaps expectedly, Bitcoin maximalists get a lot of flak for being somewhat hostile towards other cryptocurrency projects. Opponents of bitcoin maximalism are of the view that different cryptocurrencies serve different purposes. To them, there is more than enough room for multiple crypto projects to coexist without a single one having to dominate the others. Others also draw comparisons with social media giants like MySpace losing out to Facebook, a newer competitor. The point made with the comparison is that it is too early to decide which cryptocurrency will eventually dominate the ecosystem.
It is also true that in the debates surrounding bitcoin maximalism, sides are often taken as a result of motivated thinking based on the cryptocurrencies owned by individuals. In this blog post, I dispense with all sentimental views and explore the theoretical arguments that support the ideology.
Only Bitcoin Survives in the Long Run
According to bitcoin maximalists, bitcoin will be the only surviving cryptocurrency in the future. All other cryptocurrencies, in this case, are expected to lose most of their value or be simply abandoned. One reason behind this notion is that bitcoin’s huge and growing network effect is expected to keep it more valuable than other cryptocurrencies. Metcalfe’s law, which states that the value of a network is the square of the number of connected users, is frequently quoted to support this argument.
Additionally, bitcoin maximalists consider the majority of cryptocurrencies and tokens as basically clones of other projects without any additional value, impact or innovation. Such projects are not expected to be around in the long-term. Some are already struggling to survive the current bear market with most of them losing over 95% of their value.
On the other hand, the few cryptocurrencies with truly unique innovations can be co-opted into Bitcoin. Useful technologies of such cryptocurrencies can be incorporated into the Bitcoin network eventually once proven useful. For instance, a promising payment-focused cryptocurrency like Nano is unlikely to compete favourably with bitcoin with the introduction of the Lightning network. Monero and other privacy-focused coins may be left without a unique use case if privacy enhancing features are to be incorporated in bitcoin. RootStock (RSK), which is a peer to peer smart contract platform on the bitcoin blockchain can also easily outcompete other smart contract platforms because it would be anchored to Bitcoin and benefit from its network effect and brand.
Based on the analysis above, most bitcoin maximalists have concluded that in the long run, other cryptocurrencies are not worth investing in.
The Oldest and Most Secure Blockchain is the Most Trusted
Since its invention almost a decade ago by Satoshi Nakamoto, Bitcoin has survived several attacks ranging from bans from governments to hostile forks or splits in the protocol. The main bitcoin protocol is also yet to suffer any hacks or failure. Overcoming each attack or obstacle to its growth over the years has made the network more resilient and has led many to refer to it as anti-fragile. As a result, the bitcoin network is the most trusted and comes with the least uncertainty in the cryptocurrency space.
The increasing hashrate of the bitcoin network is also an indicator of its strength as well as the trust investors have in it as an asset. Additional mining power continues to be added to the bitcoin network in spite of the bearish trend this year.
Conversely, several altcoins have either been hacked, double spent (51% attack) or experienced protocol failures. It is also not uncommon for bugs to make it to the mainnet of some altcoins. For instance, the problems with NEO’s version of the delegated Byzantine Fault Tolerance (dBFT) consensus mechanism were brought to light when the network came to a standstill in March 2018 due to the failure of one node. There is also the famous DAO hack on Ethereum that had to be fixed by a fork that returned stolen funds to the accounts they were stolen from. This action meant Ethereum, the second largest cryptocurrency by market cap, does not have an immutable blockchain after all.
These problems have so far been avoided on the Bitcoin network due to the rigorous processes carried out before modifications or updates make it to the mainnet. It is also a known fact that the best developers in the cryptocurrency space work on Bitcoin.
Being the most decentralised cryptocurrency project with miners, developers, and users worldwide coupled with the absence of the founder, has removed certain risks associated with bitcoin. Majority of the existing cryptocurrencies are touted as decentralised but are controlled by a few individuals. Such cryptocurrency projects come with the risk of being affected by actions taken by leaders (or founders) in a way that is similar to how Tesla’s stock price is affected by actions of Elon Musk, the CEO. Bitcoin is without this risk due to the absence of its creator, Satoshi Nakamoto. It is highly unlikely for any rogue group of influencers to take control of the project. This also contributes to Bitcoin’s decentralised nature and makes it the cryptocurrency most capable of delivering censorship resistance.
To conclude, I would clarify that different bitcoin maximalists have varying views on the topic. At one end, there are those who consider any cryptocurrency that isn’t bitcoin a scam that should not be entertained. Others are of the view that most of the cryptocurrency projects around should rather be considered experiments and not serious investment instruments or currencies. The uniting factor, however, is that bitcoin the best cryptocurrency to deliver multiple functions of cryptocurrencies which require a secure, immutable and truly decentralised network.
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The purpose of ALTCOIN MAGAZINE is to educate the world on crypto and to bring it to the hands and the minds of the masses. This article was written and composed by Wes Carlson on ALTCOIN MAGAZINE.
