If you have delved into crypto Twitter, you’ve surely seen a few influencers with a bio that says “Bitcoin maximalist,” or “Ethereum maximalist.” This means that the only crypto they see working out in the future is either Bitcoin or Ethereum. When I see this, it makes me question whether they know what a smart contract is or not, because Bitcoin and Ethereum clearly have different purposes.
The only argument you can make for maximalism
Maximalism is subjective, based off of a person’s values. For instance, if the only thing you cared about was price increasing as fast as possible, Bitcoin might be your best bet. I could definitely see how a pure investor would be a Bitcoin maximalist as it has proven to perform better than any other crypto, including Ethereum, by a long run.
If you are thinking about what tech will have the biggest impact on the world, Ethereum makes more sense. Transactions are potentially faster, you can build an entire financial infrastructure inside of it, and since governance is liberal there is more room to develop.
Even though I can understand these perspectives, “maximalists” must understand that there is more than one role to fill in this industry. In consumer tech, Apple maximalists think the user experience matters most, Android maximalists think innovation and accessibility matters most. AMD maximalists value productivity and Intel maximalists value gaming. You will find super-fans of each, even though each product fulfills different roles.
Blockchain isn’t just about investing in a coin or building with a coin, it’s about both. This, again, is why I feel like maximalists are actively choosing not to look at the bigger picture.
Why you shouldn’t be a Bitcoin maximalist
Bitcoin doesn’t have smart contracts. This is an immeasurable difference because it essentially adds a programming language to Ethereum. Smart contracts allow people to build lending protocols, decentralized exchanges, stablecoins, social media sites, and more all within Ethereum.
There is a difference between gold and Amazon. In this situation, Bitcoin is gold and Ethereum is Amazon. Bitcoin’s scarcity is a huge factor in its price action, where as Ethereum depends on value settled within its ecosystem.
I like to compare Ethereum to Amazon because they both experienced what some people refer to as a bubble and others call a growth cycle. Amazon survived the dot com bubble, but was stagnant for many years after. Jeff Bezos was quoted in an interview saying that everyone was talking about their stock performance, but he was never worried because he knew his model was profitable and provided a unique service.
Ethereum’s bubble happened in 2017 during the ICO craze which has tons of similarities to the dot com craze. Just like how everyone thought they could solve the world’s problems with the web during the dot com bubble, everyone though they could solve the worlds problems with blockchain applications in 2017. Many credit the ICO craze to Ethereum’s invention of smart contracts, because it allowed people to create blockchain projects that do things other than transfer money.
Like Amazon, Ethereum is proving its use case through steady growth. The most obvious area where Ethereum has been useful is by constructing the decentralized finance (DeFi) ecosystem. This allows people with Ethereum based tokens to lend, borrow, and exchange with one another. While prices of cryptos have fluctuated to extremes since 2017, value locked in DeFi has shown consistent growth. You would not be able to build this type of ecosystem on Bitcoin, because it does not have smart contracts.
Why you shouldn’t be an Ethereum maximalist
Ethereum’s brand is nowhere near the level of Bitcoin’s. This is super important because people don’t actually understand the technology behind either assets yet, but they are being recommended to invest in crypto.
Bitcoin is the asset that people can get their hands on easily. They don’t need to fully understand it, but by sending Bitcoin from one wallet to another without a bank, a significant fee or processing time, they are able to understand why people think it’s cool.
People didn’t understand the web in the late 90s, and they still don’t today, but they use it so much that it doesn’t matter to them. Bitcoin is the most popular thing in crypto because people have found practical uses for it, mostly through investing. The two major draws to Bitcoin right now is as a store of value and as a relief from the banking system.
Though Bitcoin’s price is volatile, it continues to prove that it will not go away and die. People thought that Bitcoin was over after the 2018 crash, but it came back around in 2019 and almost reached the previous $20k high. Bitcoin needs to keep proving people wrong in this manner in order to maintain its relevancy as a store of value.
Blockchain is the internet of finance, and Bitcoin is the crypto where people can see tangible results. People want to have a bank-free place to keep money and Bitcoin gives that to them, plus decent returns. The funny thing is, they can store their value offline in any crypto, but Bitcoin’s brand is so prevalent that newcomers will choose it over alternatives a majority of the time.