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What is Bitcoin maximalism?
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You may have heard the term "Bitcoin maximalism" on crypto podcasts or on Crypto Twitter. It’s a term that has evolved from a community that is fierce in its ideological and technological principles. In short, a Bitcoin maximalist believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.
Most maximalists also feel strongly that altcoins (any cryptocurrency that is not Bitcoin) are not just technically flawed, but are morally questionable.
Seeing the “big picture” of Bitcoin maximalism
One thing that distinguishes Bitcoin maximalists from the rest of the crowd is that they look beyond the blockchain’s technical advantages and see Bitcoin as a currency and technology that has profound implications for monetary economics, censorship, and governance.
In other words, regardless of Bitcoin’s price, the very architecture of the cryptocurrency is what makes it so revolutionary.
Faith in the future
Bitcoin may be the most popular decentralized cryptocurrency and have the highest market cap, but it’s certainly not the most efficient. The cryptocurrency still has major issues with scalability and energy efficiency.
Despite these present drawbacks, maximalists are in agreement on the inevitability of Bitcoin being the most valued, trusted and ubiquitous form of money in the future. Just like gold built up the modern financial system through the gold standard and fractional reserve banking, so Bitcoin will be the “digital gold” of the future.
In 2016, Vitalik Buterin, founder of Ethereum, commented that bitcoin maximalism is:
"...the idea that an environment of multiple competing cryptocurrencies is undesirable, that it is wrong to launch 'yet another coin,' and that it is both righteous and inevitable that the bitcoin currency comes to take a monopoly position in the cryptocurrency scene."
Instead of a simple belief in bitcoin’s value’s proposition, Buterin argued maximalism:
“...is a stance that building something on bitcoin is the only correct way to do things and that doing anything else is unethical. Bitcoin maximalists often use 'network effects' as an argument, and claim that it is futile to fight against them."
Another common critique of bitcoin maximalism is that sidechains built on the Bitcoin network are notorious for being unable to scale. While bitcoin maximalists claim any beneficial features of altcoins can also be moved to the bitcoin blockchain without the need for a native token, the reality is that the way security is designed into the bitcoin network makes this near impossible.
For example, this applies to new consensus mechanisms that are not compatible with Bitcoin’s Proof-of-Work algorithm.
Bitcoin certainly has established itself as a “digital gold”. 2019 saw more institutional investment in cryptocurrencies than ever before – and most of this was into Bitcoin. Bitcoin maximalism presents compelling arguments for why Bitcoin might be the main cryptocurrency of the future but whether it will be the only cryptocurrency is an ongoing debate.