Original version of this article was part of the Bitcoin Fundamentals Report #199.
The fallout of the Nic Carter temper tantrum continues, and has morphed into a fight over the term "bitcoin maximalism". He went on a podcast bashing bitcoiners, saying they were holding him back all along and "my star will continue to rise". His 15 minutes are about up.
Surrounding this mini-scandal is a rhetorical game about the term "bitcoin maximalism", so, I thought I'd take a few lines to clear this up.
First and foremost, some people like Nic shorten the term to just "maxi" to make the slur more stinging, but ultimately it just makes you sound dumb and spiteful. The more these pluralists use it the better for bitcoin actually.
What is Bitcoin Maximalism exactly? From the Bitcoin Dictionary:
1) Originally, a pejorative intended to mean an unfounded belief in Bitcoin’s superiority, characterized by close-mindedness, aggressive debate style and public confrontation.
2) The general understanding of the technological, social and monetary properties of Bitcoin and how they explain the observable dominance of Bitcoin relative to altcoins.
Discussion: The term Bitcoin Maximalism was coined by the Founder of Ethereum, Vitalik Buterin, to poison the well against bitcoin arguments. 5 The label was quickly re-appropriated by bitcoiners to emphasize the economic and technical theory behind this technology.
Bitcoin maximalists typically have an appreciation for sound money and markets. They are passionate about free speech but have little patience for willful ignorance and con men intentionally misleading investors
Today, I most often use the term bitcoiner instead of bitcoin maximalist. A bitcoiner is a person who has reshaped their moral code and mental model of the world around the lessons bitcoin teaches. Those include sound money, privacy, free speech, free markets, low time-preference, private property, frugality, patience, ethics being more important than getting rich quick, demanding the highest personal standard, family, honesty, and a requirement for objective evidence. Bitcoin Maximalism is like economic Stoicism.
Perhaps the defining realization of bitcoin maximalism is that the use of money is convergent, meaning it tends to consolidate around a single money and currency due to network effects. Different monies can dominate specific regions or economies, but only due to intervention mandating an inefficiency on the market (legal tender laws). Therefore, holding altcoins is suboptimal in the long run, because economic forces would converge onto a single money.
The next step in bitcoin maximalism is to understand that each piece of the system is required and exactly balanced to make the system work. Any deviation from the bitcoin blueprint creates an inefficiency, and almost certainly a vulnerability to the entire functioning of the altcoin system. Even if the inefficiency is not fatal to the altcoin network, it still must compete long term against bitcoin's convergent superiority.
Much more can be said on bitcoin maximalism, but that should suffice for this short article to show that it is not a position taken lightly or one without the most rigorous support, both theoretical and empirical. It stands in very stark contrast to the pluralist arguments that oppose it. Indeed, in order to take a position against bitcoin maximalism, you must either defer to a logical contradiction or admit it is a purely subjective position.
None of this is to say that altcoins will go away. There are still manifold scams out there like pyrimid schemes, affinity schemes, and most famous of all Ponzi schemes. They appear, blow up, and reappear. As humans we will never be able to get rid of scams.
That brings us to the last point about bitcoin maximalism, why they can be viewed as toxic. The above leaves very little room for a legitimate altcoin. Either they will fail due to economics and trade-offs, or it is a plain scam. These two options are ultimately the same thing. Bitcoiners come across as "toxic" because we point this reality out, refusing to share in the delusion of pluralists scammers.
This iteration of the perennial bitcoin maximalist debate will fizzle out soon enough, like all others before it.