The Bitcoin Maximalist Attitude: A Threat to Web3’s Future?
As Bitcoin reaches yet another all-time high, the excitement among holders is palpable. However, not everyone is enthusiastic about this milestone. The Bitcoin maximalists, who evangelize the technology as the only viable solution for decentralized finance and Web3 applications, are a significant force in shaping the industry’s narrative. But is their stance justified?
The Reality of Bitcoin’s Design
Bitcoin was created to decentralize finance, but its blockchain was not designed to be built upon. Ethereum, on the other hand, was specifically designed as a foundation for decentralized applications and smart contracts. The maximalist attitude ignores this fundamental difference in design philosophy.
A Detour into Web3 Madness
Take Bitcoin Puppets, for example. People are shelling out over $17,000 for images supposedly drawn by a child. These intentionally sloppy and basic images have no business existing on the blockchain. Similarly, Bitcoin Ordinals, while a creative solution to representing information on-chain through inscribing data on single satoshis, are inefficient and clog the Bitcoin network. Binance’s decision to shut down support for Ordinals indicates that, although attractive to purists or maximalists, they are merely novelties.
The Influence of Maximalist Attitude
The Bitcoin maximalist belief has far-reaching implications, influencing adoption rates, technology development, and the broader narrative around Web3. However, not everything needs to be decentralized or on-chain. The blockchain isn’t right for everything, and it’s time we acknowledged this reality.
The Blockchain Isn’t Right for Everything
Many Web3 builders continue to ignore the fact that the blockchain isn’t a silver bullet solution for every industry or organizational system. Some things work perfectly fine with existing technologies, and the blockchain should complement these systems rather than replace them outright. It’s not as simple as pointing to an industry or methodology and saying, "The blockchain would fix it." Striking the right balance of decentralization is a complex task.
Blending Web2 and Web3
Instead of bridging Web2 and Web3, we should focus on blending these two worlds to create the best user experience possible. It’s good to evolve and try new things, but fighting complementary Web2 technologies doesn’t help. All technologies exist on a spectrum, working together in one way or another.
The Internet as a Basis
The internet remains the foundation for everything we do. Web2 technologies will continue to dominate online infrastructure for the foreseeable future, and the need to transact fiat currency is unlikely to disappear. Even Web1 technologies like static pages and fillable forms still exist. Any blockchain system, particularly those in finance, must coexist with more traditional systems that represent the current standard.
Human Involvement
Blockchain technology will always require human administrators and institutions to run the systems, at least to some degree. Indeed, if done right, we can create trustless systems requiring minimal human input. However, humans still need to be able to intervene when things go wrong. The recent Pump.fun disaster is an excellent example of this.
Trust vs. Verification
The concept of "trust" is often confused with "verification," which the blockchain does provide. Records on an immutable ledger enable you to see the history of whatever was put on-chain, but that doesn’t mean the thing on-chain is trustworthy. Trust stems from things like reputation, history, and community acceptance.
More Distributed than Decentralized
Blockchains today are far more distributed than decentralized. Bitcoin is a perfect example, with 1.86% of address holders holding 90% of the total supply in circulation – not exactly decentralization. At a practical level, many people don’t even know their wallet holds the cryptographic key to access their tokens rather than the tokens themselves.
The Shifting Work
Blockchain technology often relies on the systems it’s designed to replace, which is more akin to shifting the work elsewhere, not actually decentralizing the processes, rules, and access underlying the system. Web3 builders should focus on establishing a durable, flexible, wide-ranging ecosystem rather than overly relying on one blockchain or another at the expense of the wider industry.
Conclusion
The Bitcoin maximalist attitude threatens to stifle innovation and progress in the Web3 space. We need to acknowledge that the blockchain isn’t right for everything and focus on creating a diverse, inclusive ecosystem that benefits everyone. By doing so, we can unlock the true potential of decentralized finance and Web3 applications.
