The Two Kinds of Cryptocurrency Maximalism
Cryptocurrency maximalism (usually of the Bitcoin variety) evokes a wide range of reactions, from fanatical certainty of it being the inevitable outcome, to it being called “bovine excrement.”
But not all cryptocurrency maximalism is created equal, which I think helps to explain the wide range of reactions to it. I’d like to distinguish between two types of maximalism, which I call Ideological Maximalism and Principled Maximalism.
This is the brand of maximalism that insists, usually with lots of pejoratives, that their preferred cryptocurrency (usually Bitcoin) is the “one true cryptocurrency” and that therefore all other “altcoins” are, a priori, scams that will certainly eventually go to zero. No other cryptocurrency could ever take the maximal position, because… they just can’t!
Ideological Maximalism seems to have its origins in the early years of Bitcoin, a time when recognizing the value of Satoshi’s innovation was a mocked minority position, and when “altcoins” truly did offer little of value compared to Bitcoin. That environment led some to a fanatical, quasi-religious devotion to Bitcoin, one that has been seemingly vindicated with Bitcoin’s massive value gains. It has intensified, however, in the last few years as new cryptocurrencies, such as Ethereum and others, have started offering truly innovative new features and have won significant market share from Bitcoin (even as the whole market has grown exponentially).
But Ideological Maximalism isn’t the only kind of maximalism out there.
For example, Tuur Demeester, Editor-in-Chief at Adamant Research, wrote in April 2017: “Because of various network effects, I hold a cryptocurrency maximalist position, believing that one protocol will eventually win +80% of the market. With that as a given, I currently have a binary view on the ecosystem: either Bitcoin will win, or Ethereum.”
There are three important differences between this position and Ideological Maximalism.
First, Demeester holds that long-term cryptocurrency maximalism will come about due to the power of network effects, rather than because a particular cryptocurrency is the “one true cryptocurrency.”
Second, since other cryptocurrencies are not dismissed automatically as scams, they might provide some value, hence his position that the top cryptocurrency will, in the long term, capture +80% of the market, rather than near 100%.
Third, and most importantly, he believes the long-term maximalist position could be captured by any cryptocurrency, not only Bitcoin.
Evaluating the Two Kinds of Maximalism
Ideological Maximalism really is toxic for the cryptocurrency community – not mostly because it’s “not nice” or because it doesn’t properly value crypto-diversity, but because it’s unreasonable, close-minded, and unjustifiably dogmatic.
Principled Maximalism, on the other hand, is based on reasonable, good-faith argumentation. As such, I not only do not consider it to be toxic for the cryptocurrency community, I take it seriously as one possible long-term outcome (among many possible outcomes).
In the course of actual history, Principled Maximalism as a theoretical prediction may be proven correct or incorrect, but until then, since it is based on principled argumentation, one needs to provide the same to reject it.
Ironically, this means that those who dogmatically reject Principled Maximalism, perhaps because they view it as unfriendly, without taking seriously its arguments are akin to Ideological Maximalists: one side thinks a cryptocurrency maximalist prediction is a priori toxic, the other holds that all non-preferred-cryptocurrencies are a priori scams.
This means we could also distinguish between Ideological Anti-Maximalism (all maximalist predictions are toxic) and Principled Anti-Maximalism (Principled Maximalism is incorrect for given reasons; a position, I will add, I also take seriously). Or maybe we should use a more positive term for this position, like Principled Pluralism?
Further, some people predict an oligarchical outcome in which a small number of cryptocurrencies dominate.
The point is this: cryptocurrency is a radically new technology and no one really knows for sure exactly how it will play out in the long term. No prediction about the future should be held as rock solid, impervious to correction.
Instead, as with all endeavors, all of us would do well to practice humility, stay open-minded, and have a willingness to adjust our positions when presented with new information.