There has been a recent discussion about Bitcoin Maximalism lately, most likely due to the sudden rise of Ethereum. This conversation is not new dialogue but typically arises when there is a competitor at Bitcoin’s heels. Many people have written about this subject such as Vitalik Buterin, Daniel Krawisz, and just recently Hivemind creator Paul Sztorc.
Also read: Coincheck: Japan ‘Treating BTC as Currency’
Bitcoin Maximalism: ‘One Chain to Rule Them All’?
When Bitcoin is struggling in fiat value or something crazy happens like a “spam attack,” many are ready to attack it. In the past, and even now, when an altcoin flourishes in value or development it is seen as a threat to the Bitcoin ecosystem. This trend is repeating yet again; as of press time, Ethereum is the second largest market capitalization — and is closing in on Bitcoin. Prior to the token gaining this massive wealth injection in 2014, Vitalik Buterin wrote about Bitcoin Maximalism:
“One of the latest ideas that has come to recently achieve some prominence in parts of the Bitcoin community is the line of thinking that has been described by both myself and others as “Bitcoin dominance maximalism” or just “Bitcoin maximalism” for short – essentially, the idea that an environment of multiple competing cryptocurrencies is undesirable,”
Proponents of this ideology believe that Bitcoin will reign King forever and always be the champion of cryptocurrencies. They say altcoins may exist, but they will be behind the forerunner at all times and leech off its security and network effect.
The digital currency’s network effect does have powerful attributes that are currently superior to the rest of the virtual tokens out there. This includes widespread adoption in many areas including merchants, industry operators and miners. Speculation grows larger as a result, and its value becomes continuously demanded. Bitcoin also has the edge when it comes to network hash power, security and strength.
It is said that the Bitcoin blockchain’s network security fuels those trusting its value. It solidifies the subjective valuation that most prefer it over any other protocol. No other altcoin has this first mover advantage and network effect. With its vast community of miners, supporters, and merchants, the currency becomes a liquid driver constantly progressing. Daniel Krawisz explains this phenomenon in his editorial featured at the Satoshi Nakamoto Institute called “The Coming Demise of the Altcoins (And What You Can Do to Hasten It).”
“A more liquid currency has an advantage over a less liquid one because it can support more trade. Furthermore, liquidity in a currency is self-reinforcing. The more that people buy a currency, the more liquid it becomes. This naturally tends to promote the success of a single currency over all the rest.”
Lately, within the madness of the block size debate and ventures such as R3 and Microsoft’s Azure program, arguments have been made against Bitcoin. The new “blockchain agenda” says the technology underneath the cryptocurrency is superior. Nonetheless, the digital currency remains stronger than cheap talk and vaporware. The digital currency has done fairly well in value this past year, and infrastructure is growing.
The block size debate has been long and tiresome at times but it also shows its truth decentralized strength. Governance is not made up of large shareholders or Masternodes, but is formed by the legions of users, miners and infrastructure providers, all of which outweigh nearly every altcoin in existence.
When you add the combination of merged mining into the equation, you anchor the Bitcoin blockchain even more. As Paul Sztorc explains in his latest blog post called “One Chain to Rule Them All,” merge mining these alternative tokens strengthens the digital currency further. The current hashing power within the Bitcoin network is exponentially larger, so some miners take a smaller hash rate from an altcoin to reap more bitcoin in the end. The King of cryptocurrency’s network runs at 1,277,073,879 GH/s as of press time, and this offers a security like no other. Sztorc believes there will be “one chain to rule them all,” and the Hivemind developer adds, “being ‘ruled by Bitcoin’ is awesome.” Paul Sztorc states in his post:
“Whether you choose to merge-mine a blockchain, or to anchor a file, you will want to use Bitcoin (aka “the blockchain”) as your base-layer blockchain, because…only Bitcoin’s hashrate stands a chance,— Bitcoin currently has the maximum available hashrate on the planet, making it immune to attack from the world’s supercomputers.”
Bitcoin Maximalism will always exist unless there are significant failures throughout the network and the community of users leave en masse. Those that believe Bitcoin is the king will prefer it no matter what altcoin comes into play. And there will be people who continue to support the altcoin ecosystem, believing there is a chance for an altcoin to take the throne. With Ethereum being the second largest capitalization and its value progressing fast, one may ask if Bitcoin Maximalists should worry. Bitcoiners often don’t worry, and when these alternative token events take place, they become more vocal in their support for the king.
Are you a Bitcoin Maximalist? Or do you disagree with their opinions? Let us know in the comments below!