Toxic bitcoin maximalism has been in the spotlight. For the past few days noted bitcoin booster Udi Wertheimer has been kicking the cyber hornet’s nest, challenging a non-dominant opinion in some of the online spaces bitcoiners congregate that bitcoin is the one, true crypto asset.
“[K]nowingly pushing people away from bitcoin [in] the short term is, in udiverse’s opinion, highly immoral. gatekeeping is not a virtue,” Wertheimer said on Twitter, referring to himself as udiverse. He’s been on a tear, questioning the immune-like response bitcoiners activate when anyone denigrates “the coin” or mentions other cool crypto things happening on other chains. Everything “crypto” – that is non-bitcoin – is a scam; everyone who sees value elsewhere is a scammer.
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Not to call anyone out in particular, but here’s a good example of a bitcoin influencer turning on Nayib Bukele, the “Trojan horse” presidente of El Salvador who pushed through legislation putting BTC on equal footing with the U.S. dollar, for experimenting with TRON. “Idiot!”
Bitcoin toxicity may seem like a trivial issue. That this battle is being taken up by someone who talks in the third person as some sort of cartoon platypus speaks to the absurdity. The internet is not “real life.” Twitter’s infinite scroll is infinitely dumb. But at the same time, udiverse – the troll of trolls – has a point.
Many a public figure has been chastised for stating views counter to the bitcoin mindset – sometimes pushing them out of the fold. Best-selling author Nassim Taleb has been savaged (though he may have been asking for it), as have figures like the lovable Neeraj Agrawal. Some folks, like Bloomberg editor Joe Weisenthal, playfully engage the beast. But for many, being dogpiled by “maximalists” is an unnerving experience.
As bitcoin continues to gain prominence in the global economy and activity on the internet, it has also become central to some people’s sense of identity. Bitcoin is not just an asset to hold but a movement in which you participate. Extreme fanaticism conflates perceived attacks on the Bitcoin network to one’s sense of self. It also allows no quarter to people who haven’t yet “grokked” bitcoin, or may be troubled by its effects on the world.
As Wertheimer argues, the case for coin tribalism is wearing thin. In his reading, maximalism as we know it today took root in 2017, when the bitcoin community was divided over the question of block size. This was a mostly technical debate about changing a few narrow parameters of the Bitcoin source code, but it was at heart an argument about what Bitcoin is. Should developers pursue a “digital cash” system, or is bitcoin “digital gold?”
Those who took the former position and wanted more transactions per second, making BTC more usable money, they reckoned, were deemed bad actors. (There were legitimate concerns about increasing the block size: Bigger blocks would diminish the fee economy; true scalability would likely require layer 2 systems regardless of block size; perhaps most importantly, bigger blocks would make it harder to run a node, thereby diminishing Bitcoin’s decentralization.) Many former insiders were cast aside.
I’m a subscriber to the idea that Bitcoin is something of a “Protestant reformation” in the history of money – stripping financial control from technocrats and empowering individuals to pursue their own path – and think “bitcoin maximalism” could justifiably be described as a puritanical turn. Bitcoin became a mind colony. Ideas about bitcoin hardened, the scope of acceptable debates shrunk and everyone slightly heterodox was now a heathen. Leaving aside the heavenly visions of hyperbitcoinization, much of this unfolded in good faith.
“[S]eparatism used to be a fitting response, e.g., in 2017, when actual bad actors tried to hurt the movement,” Wertheimer said. “[H]owever, 2021 is different, the new crowds aren’t trying to hurt anyone, and separatism doesn’t achieve the stated goal of ‘educating’ anyone.” (Wertheimer did not respond to a request for comment.)
Wertheimer isn’t the only hardcore bitcoiner to soften his views. Eric Wall, a researcher and chief investor for Arcane Assets, has also recently begun striking out against toxic maximalism. Wall and I spoke earlier this month about how identities form in the crypto industry, what value they provide and the possibility of changing your mind. His is a story of personal transformation, but it’s not about any single individual’s beliefs – not Wertheimer’s or Wall’s – but about community orientation. It applies also to other forms of blockchain maximalism.
The strongest case for bitcoin supremacy is made by those who want bitcoin to succeed in becoming a universally accepted scarce asset.
“In order for bitcoin to compete as this store of value, we need to make sure that it stays the number one asset. If Bitcoin gets replaced by Ethereum, and then Ethereum gets replaced by Solana [and that] gets replaced by whatever the next smart contract platform or cryptocurrency is, then it’s going to be very hard to make the case that we’ve actually invented digital gold,” Wall said over Zoom.
That’s a position Wall will fight for “until my last dying breath.” But creating an “alternative to the fiat money we have” does not preclude the success of other blockchain-based applications or tools.
Wall is a thorough if sometimes uncouth researcher. By his own account, he has made enemies of every coin camp – being labeled a Cardano, Ethereum and Bitcoin maximalist – for asking tough questions about each chain. For years, he had been skeptical of Ethereum and believed that in time, through scaling solutions, Bitcoin could achieve the same functionality as the so-called “world computer.”
“I used to believe that Bitcoin should be the base layer of everything and we should just build layer 2 solutions on top … to add flexibility,” Wall said. Looking a little closer, however, Wall discovered that these add-ons failed to live up to their expectations. All, excluding the Lightning Network, reintroduced the problem of “trust” that Bitcoin had solved (allowing parties to interact without an intermediary).
That wasn’t the case for Ethereum, which has suffered from its own expansion issues but found “flexible,” “feature rich” and “decentralized” solutions like rollups. “That’s something that made me start to change my position on whether or not bitcoin was the only asset that had a role to play in the cryptocurrency ecosystem,” Wall said. Blockchains can be complementary systems, he said.
This position, both financial and ideological, put him “at odds” with some bitcoiners. When asked why that is, Wall said that sometimes when people invest in a blockchain’s promises, “they feel as if they have no way of backing out or changing their mind in light of new information or evidence.”
But crypto markets are open 24/7, and markets account for all available information.
“When I realized this, the only thing that I had to do was to buy some ether [the native currency of the Ethereum blockchain] to be in alignment with my beliefs,” he said. “Now I’m not afraid of ether becoming successful.”