The Debate Rages On
In many ways, Bitcoin has proven itself as a store of value, especially when compared with gold. This is, however, over a medium to long-term investment period. Nobody has ever lost money holding Bitcoin over 5 years. The same however cannot be said of gold. In fact, up until very recently, gold had been flat for almost 10 years. Not a very convincing store of value, especially when you begin to factor in the inflation rate.
Compounded inflation over 10 years will eat away at any asset’s value whose price remains stationary. And yet, some are adamant that gold remains a store of value. It’s clear from the data that gold ceased being a true store of value some time ago. A store of value has to incorporate and outperform inflation, without which there is no preservation of value.
Bitcoin provides a superior store of value to gold. However, Crypto extends beyond money and the preservation of value. If Bitcoin were able to provide perfect solutions for every Crypto use case, perhaps maximalists would have a case. The truth however is that Bitcoin is not well suited to many alternative use cases. Not only that but other blockchains provide excellent solutions to alternative and growing use cases.
Reality & The Dynamics That Govern The World
For a protocol to become the standard, it has to meet the current demands of the industry. Even with the help of layer 2 solutions, this is an impossibility. Maximalists desire an unrealistic outcome, sacrificing productivity and efficiency for idealism. Maximalism requires perfection across multiple sectors, to make the case for a single-chain future.
Imagine trying to enforce such a scenario. Capitalism will always choose a multi-chain existence. Participants within the Crypto space are incentivized to develop and create. This is the heart of capitalism. The fact that maximalists are pushing for a Bitcoin standard without first attending to the existing issues points directly to an unrealistic and unattainable vision. Having a vision is admirable. However, it has to be attainable.
A perfect solution will win many admirers and converts. However, perfection is an impossibility in most cases, especially within a new and developing industry and technology like Crypto. Eventually, Bitcoin will offer more than simply being a store of value. For example, take a look at Saylor’s new Orange. This is a good example of expansion, regarding the everyday use cases and practicality of Bitcoin.
Essentially, maximalists should spend more time developing, as opposed to evangelizing. Use cases that enhance day-to-day life will speak for themselves, and trigger a heightened level of adoption. That’s just my opinion. Creating products that people need and want is the cornerstone of commercial success. The worst thing you can do is convince everyone that you have the solution when you do not.
Bitcoin has potential beyond a store of value. However, there needs to be a lot more exploration, and eventually, expansion before any of these ideas can be taken seriously. Furthermore, considering that a perfect chain is practically impossible, the idea of maximalism (by choice) is somewhat unrealistic. Diversity and choice are what make blockchain exciting.
Final Thoughts
We all have our own perceptions and viewpoints. However, there will always be fundamental truths involved. The finer points ultimately decide which opinion or viewpoint is accurate, or at least, the most accurate. The idea of Bitcoin maximalism is more of a desired outcome, rather than a practical destination. These are my thoughts regarding this ongoing debate. What are your thoughts on maximalism?
Disclaimer
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This article was first published on Sapphire Crypto.