Confessions Of An English Bitcoin Maximalist

A Eunuch's Dream

Jean Lecomte du Nouÿ I. The limits of perception

It starts with money—and the desire to have more. Satoshi Nakamoto wanted it that way. Nothing focuses the mind quite like base greed.

For me, bitcoin began life as a distraction to read about during lunchbreaks. It was 2013. Pockets of the mainstream media were reporting on a “digital coin” that had somehow created billions of dollars of value out of thin air. Google and Reddit indulged my curiosity. I grasped little of what I read. Soon, the price of one of these bitcoins had fallen from an absurd $259 to an absurd $100. If I was going to gamble on absurdity, at least I was getting a good price. I bought.

Later that year, somewhere in the skies above Iran or Iraq, I connected to the on-board WiFi of an Emirates Airline Airbus A380. The novelty of airborne internet wasn’t enough for me. How much sweeter to deploy this new technology while capitalizing on another? Bitcoin was approaching $300, a fresh all-time-high, three times what I’d paid for it. The gamble was a success. I sold.

By the time I’d landed in London, my ego felt fragile. Modest mistakes won’t break you. Life-changing miscalculations might.

The blows came with bitter regularity over the next few weeks: $400, $500, $600—quicksand for organs—$700, $800, $900—surely not?—yes, $1,000. Congratulations turned to commiserations following clarifications. “If I’d just…” is the stupidest phrase in the English language. You didn’t. Move on. The pain eased as bitcoin fell back from its peak, of course, but the regret and the sense of missed opportunity lingered. It wasn’t until 2014 that I was ready to gamble again. And it was another gamble, for I had learned nothing beyond a grudging acknowledgment that timing markets is difficult. I believed that bitcoin could, potentially, become a new global currency. I also believed that was probably wishful thinking. Hedging your bets is a reasonable strategy if you aren’t willing to invest the time needed to make a better informed, more decisive judgment. The years rolled on. A family tragedy meant that the 2017 bull run passed by in a haze—an irrelevance, no engagement, no regret. Covid propagated. Bitcoin stirred again. Time to give this thing some proper attention.

Perhaps I should be embarrassed that it took me eight years to even begin to understand bitcoin. But I’m not. Life got in the way. The journey only begins when you gain a sharper awareness of your starting point, and that comes easier to some than others. If you didn’t surrender your youth to studying and working, only to see your education devalued and your labor exploited—you won’t be compelled by a sickly sense of injustice. If you didn’t save five times as much as your parents for a home deposit by the age of 30, only to be priced out of the property market another five times over—you won’t feel tormented by the regression of your economy and the rubble of your aspirations. If the country of your birth or the events of your early life didn’t put you on a worse path than less intelligent, less diligent people—you won’t be desperately seeking meritocracy around every corner.

Nakamoto recognized that the best way to incentivize the development of a brand new monetary system is to appeal to human selfishness. Bitcoin, I gradually discovered, really could achieve some remarkable things. But those potential benefits were—and largely still are—theoretical. The only reason I was even thinking about them was that the prospect of their deliverance was, apparently, making me money.

Let’s acknowledge, then, without hyping it up, that bitcoin gives people living under repressive regimes the ability to protect their assets from seizure. No need for a domestic or overseas bank account. No need to seek permission to make a transfer. No need, even, to smuggle a memory stick across international borders. The concept of autonomously digitizing money—effacing its physical form, sending it into the ether, and then retrieving it with a memorized string of words—is a tough pill to swallow. Skepticism, logic and a lifetime of dependence on third parties make that degree of self-sovereignty appear fanciful. Even when informed about bitcoin, even when educated about its trustless nature, few of those who stand to benefit the most from the technology have embraced it.

Likewise in democratic countries, where the threat of authoritarianism gives way to a subtler, more pernicious assault on financial liberty. Content with their relative good fortune, the citizens of these countries place staggering faith in the institutions that govern their lives. Injustices are griped about but generally misdiagnosed. So, crippling inflation is conceived as a “cost of living crisis” caused by political missteps, rather than by a deliberate policy of currency debasement by central banks; unaffordable housing is blamed on restrictive building regulations and a lack of support for homebuilders, rather than on a deliberate policy of leveraging homes as investment vehicles. That decades of technological progression have been accompanied by surging inequality should sicken every decent person. It should be and is reversible. Yet those paying the price—the lower classes—are both deemed, and deem themselves, intellectually unqualified to join the economic discourse. Economics, the great obfuscator, the least scientific of the sciences, has become the preserve of those benefiting from the inequality it unleashes.

Bitcoin obviously can’t fix all of this. But it can allow the ordinary man in the street to excuse himself from the game, to reject his government’s monetary policies, to take his stack off the table, and to convert it to an incorruptible, deflationary form of money that preserves value and rewards saving. And yet, again, the number of people actually doing so today is negligible.

That’s because bitcoin’s meteoric rise from zero to $69,000 wasn’t propelled by economic purity or egalitarian potency. The thrust came almost entirely from market speculation and a selfish desire to make money. Small wonder, then, that so few who have profited from the asset have bothered to also understand it. Technological insight isn’t a prerequisite to gambling. To know that a blockchain creates immutable data that’s recorded on a distributed ledger is helpful when defining bitcoin. But to know that the SHA-256 cryptographic hash function achieves this end—and to understand why it’s so mathematically impenetrable—is, let’s be honest, superfluous for most people. The same applies to timestamping mechanisms. Any bitcoiner who can’t tell you how proof-of-work mining secures the network is, admittedly, behind on their homework. But should they really be expected to understand why the computational effort of that form of mining creates a superior shield to other, equally complex consensus mechanisms?

The reality is a fraction of bitcoin holders actually grasp the basics of the technology they're betting on. Still fewer will do so in future, if it enters the mainstream. Deep understanding will be restricted to experts and developers, as is the norm across industries. But this creates a dilemma in bitcoin’s early days. Ordinary users like myself can develop a sense of the sublime. We can perceive shapes in the economic fog. Yet our pseudo-science will always be unprovable, and our technical insight always assailable. What to do, then, but fall back into abstraction?

II. The allure of radicalism

"the mind in the presence of the sublime, attempting to imagine what it cannot, has pain in the failure but pleasure in contemplating the immensity of the attempt"

The German philosopher Immanuel Kant argued that perceptions of the sublime arise from the interplay of aesthetic imagination (comprehension) and mathematical reasoning (apprehension). When the two come together, any person can gain an ethereal understanding of a subject that their mind couldn’t otherwise wrap itself around—handicapped, as we all are, by either low creativity or unschooled faculties.

It’s an important lesson for anyone who thinks you need an economics degree to have a valid opinion on economic affairs, or a computer science degree to have a valid opinion on bitcoin. You do not. Of course schooling in these fields will home your technical skills and extend the reach of your reasoning. But that reasoning will always fall short. There will always be more books to read, more theories to learn. And no matter how grand your intellectual architecture, the totality of the subject will never resonate without an emotional spark. In matters of the sublime, it's the simpler man—the exploited worker, the impoverished renter, the gambling pleb—whose experience shines through and enlightens.

As an exercise in social justice, this is a pleasing truth. But the scope for manipulation is vast. Consciously or subconsciously, proportionately or through distorted senses, all of us are tormented by our limits.

When you awaken to the personal, social and economic potential of bitcoin, when the enormity of the subject dawns on you, the scale of your inadequacy balloons in tandem. The more you know, you more you realize you don't know enough. The more you perceive bitcoin’s abstract merit, the more mental pressure you feel: to fill potholes in your understanding, to build bridges between the academic realms, to craft intricate details on the facade of your narrative. Most of us will procrastinate. Some will give up. A few will become obsessed. And it’s a subset of this latter group—addicted, emboldened by financial success, enchanted by sublimity—who take the path of bitcoin maximalism. Walking by their side are the prophets. There's nothing more satisfying in this world than being told you're right. Not just correct, but singularly right—on every subject, from every angle, in defense of every conceivable counter-argument. Your beliefs are right. Opposing beliefs are wrong. That gnawing sense of inadequacy you feel—that demon on your shoulder mocking your confidence—is the only threat to your greatness. Stamp on him. Suppress his voice and the voices of all who echo him.

Radicalism is alluring in many aspects of life. Simplified, sanitized versions of the truth relieve the burden of thinking. But on matters of the sublime—where your understanding is part feeling, part formula, wholly intangible—radicalism is at its most virulent. The prophets are celebrity advocates of bitcoin maximalism, eulogized by the faithful, entrusted with all the mental heavy lifting. They tell you what you want to hear. You stop worrying. You stop questioning.

It would be helpful here to define bitcoin maximalism. But I cannot. The concept is fluid, driven not by lasting tenets but by blind adherence to the prevailing dogma of its loudest supporters. Today, they tell us bitcoin is the only cryptocurrency of any value. Its global community of developers has built a revolutionary technology. Ethereum's global community of developers—in some cases the same individuals, wearing different caps—has achieved nothing (or, at least, nothing that can’t be co-opted by bitcoin). Today, they tell us blockchain technology will only ever have one conceivable use case for humanity: the preservation of bitcoin. Blockchain offers no cost, efficiency or security benefits over other forms of digital record keeping. “Bitcoin, not crypto, not blockchain” is the mantra.

What edicts they’ll pass down tomorrow is anyone’s guess. The manner in which bitcoin should and should not be integrated with the global financial system is likely to be a popular sermon. Decentralization, privacy and censorship resistance are core features of Nakamoto’s creation. Nothing that leads the network away from these principles is faithful to his vision. Yet, outside of the network, such lofty ideals carry little weight. Most crypto exchanges already force their users to comply with Know Your Customer (KYC) identity checks—heresy to maxis. Most of the traditional financial institutions offering exposure to bitcoin only let their clients invest in Exchange Traded Products (ETPs) run by centrally regulated fund managers—more heresy. For bitcoin to enter the mainstream—for regulators, legislators and institutions to embrace it as a legitimate commodity or currency—rules will need to be followed. At the moment, there’s no consensus among the maxi celebrities about how, if at all, the community should navigate this minefield. When that consensus emerges, detractors will be held in the same disdain as any bitcoiner who sees value in an altcoin.

It’s important to recognize that two things happen when you embrace radicalism. First, you absolve yourself of the need to apply independent thought and reason: you’re guided not by your own wisdom, not even by the wisdom of others, but by doctrine. Perception gives way to instruction. Second, you reject compromise, tolerance and the modest diffidence that better men have relied on through the ages to advance their cause and refine their understanding.

“I wish well-meaning, sensible men would not lessen their power of doing good by a positive, assuming manner, that seldom fails to disgust, tends to create opposition, and to defeat everyone of those purposes for which speech was given to us”

Let’s assume that a good number of maxis—perhaps even a majority—understand why bitcoin’s blocks are kept relatively small (doing so preserves the decentralization of nodes) and also why they’re generated relatively slowly (this allows time for nodes to act as validators). It doesn’t take much research to grasp these concepts. But the deeper you dig, the more confusing things become. Very few maxis would be able to convincingly argue why bitcoin is technologically superior to each and every one of its rivals, in each and every aspect, when considering each and every potential future use case for cryptocurrency. I certainly couldn’t. And yet, if you declare yourself a maxi, if you pledge allegiance to that fundamental truth, you’ll be hailed as enlightened by your peers. Your radical rejection of all competing blockchains will be deemed correct not because of the depth of your understanding but because of the fanaticism of your stance.

It’s through this prism that maxis somewhat perversely embrace the slur of “toxic maximalism.” Rather than seeing it as a commentary on their behavior, they uphold it as proof of their commitment—a badge of honor confirming their dedication to the noblest of causes. In reality, of course, toxicity and nobility cannot coexist. The mental and interpersonal degradation that flows from radicalism is a singularly regressive trait, as shown by the callousness with which some maxis continue to hail news of rival project failures and community-wide financial losses.

III. Dispelling the mind frenzy

In my first chapter, I argued that most bitcoiners will enter the space with a poor grasp of blockchain technology and a motive of financial gain. In my second chapter, I argued that our ignorance and selfishness can develop into a sublime vision of hyperbitcoinization, but that complexity and abstraction will push many of us toward radicalism; specifically, under the guise of bitcoin maximalism.

Having presented bitcoin maximalism in this broadly negative light, it may seem odd that I still consider myself a maxi. But the substance of the philosophy is distinct from the style of its followers. My arguments thus far have focused solely on mental processes: modes of understanding and tribalist tendencies. I have not attempted a detailed autopsy of the differing breeds of maximalist thought; nor am I particularly qualified to do so. Other, more technically astute writers can tackle that mountain. My polemic is simply an attack on passive, unthinking radicalism. I make no apologies for sharing some of the underlying beliefs of these radicals. But I insist on reconstituting those beliefs on a foundation of my own free thought, and I reject the notion that contrary beliefs must necessarily be misguided.

So, what is bitcoin maximalism to me? At its core, nothing more than a logical corollary.

I accept the premise that blockchain technology and decentralized finance have the potential to usher in a more efficient, more transparent, more equitable financial order—one that empowers individuals while disempowering governments and institutions. Even back in 2013—as ignorant as I was about the technology—I had an inkling that this is bitcoin’s ultimate proposition. To realize that potential, however, it’s inescapable that there must be one dominant monetary ecosystem. As soon as we introduce competition between cryptocurrencies—dispersing resources and pitting them against each other—we dilute and devalue the new financial order.

Why should anyone entrust their life savings to a novel form of digital money that might very well become obsolete next year? Why should they embrace a monetary ecosystem when the anonymous people developing it are being tugged in different directions, unable to agree on the most basic building blocks of that ecosystem?

You may think these questions are unfair. Bitcoin, or whatever cryptocurrency you favor, may have zero prospect of obsolescence—in your mind. The establishment of a universal unit of account may be a foregone conclusion—in your mind. But those are beliefs that you yourself have created. Your reasoning may be sound and well-informed; it may not. Your predictions may be proved right; they may not. Either way, the vast majority of people do not currently agree with you—and it’s this majority that will determine the prospects for mainstream success. How, then, to win them over? Start by understanding their concerns. Return to your pre-crypto state of mind. Unravel your revelations about bitcoin. Now look again, objectively, eyes re-scaled, at the proposal before you: the adoption of a decentralized blockchain—technology you don’t understand, made by unaccountable, anonymous individuals—as real money; the conversion of your financial security into a digital token that has no intrinsic value, and that cannot physically be held yet somehow can be lost. It’s daunting. You’ll consult the mainstream media. You’ll listen to financial experts. You’ll wince at references to tulip mania and Ponzi schemes.

Just as our grief after the passing of a relative reflects how deeply we loved the person, so our skepticism in the face of a proposal reflects the magnitude of the change being touted. Bitcoin’s proposition is a gargantuan, earth-shattering affair. For the first time in history, it promises that societies—not their elected or unelected officials—can have the privilege of designating a currency, setting the rules for its distribution, overseeing its proper usage, and gradually, collectively imbuing it with value. It also promises that the technology delivering this revolution is mathematically infallible, and that the infrastructure defending it cannot realistically be overpowered by hostile actors.

Some gullible people will believe this instantly. Some geniuses will verify it in a matter of weeks. For everyone else, the journey takes time and effort.

Maxis, at their core, beneath the rhetoric and the vitriol, simply want to make that process quicker and easier for humanity. We recognize the value of consistent narratives and united voices when promoting change. We believe that many cryptocurrency projects are actually doing more harm than good—enticing users to inferior or dangerous protocols that will destroy value and discourage adoption in the long-run. Some of us think radical messaging is needed to cleanse the space. Others, like myself, prefer a monotonous drumbeat of inalienable truths. Bitcoin was the first blockchain and the first cryptocurrency; its primacy will never be challenged. Bitcoin is the largest cryptocurrency in terms of both liquid market capitalization and community engagement; its network effects have never been surpassed. Bitcoin is the most decentralized, most energy-intensive and therefore most secure blockchain; no other network is as good at harnessing the distribution of supply (through proof-of-work mining) as a bulwark to protect funds from attack.

Of course it’s true that smaller, more centralized blockchains can innovate at a faster rate. Unencumbered by consensus building and due process, their founders can push through upgrades as easily as a CEO can change a company’s business strategy. They can also roll back transactions that they believe to be illegitimate, making funds disappear at the click of a button. That works fine in the short-run. The founders and early adopters of these nimbler blockchains may become very wealthy. But humans are fallible. As long as your funds are controlled by centralized governance, there will always be a central point of failure. With the passage of time, perhaps through incompetence, perhaps malice, bad decisions will inevitably be made. And when they are, you’ll see how the greatest ideas in the world are worth nothing when poorly implemented.

Nakamoto wasn’t a genius because he launched the first decentralized blockchain. If he hadn’t, someone else would have. He wasn’t a genius because he deployed the technology to create a monetary network. Even I could have worked out that application. He was a genius because he had the wisdom and foresight to remove individuals from this new financial order. Bitcoin is slow. It’s methodical. It’s energy inefficient and expensive to run. It can evolve, and it will evolve—borrowing the ideas played with by lesser protocols, rigorously testing them, flawlessly executing them. Layer upon layer of slick technology will be welded onto its cumbersome chassis.

If you agree with that, you might be a maxi at heart. And if you don’t, that’s ok too. No matter how confident we are in our beliefs, no matter how delicately or aggressively we impose them on others, bitcoin couldn’t care less. Tick tock, next block. Ad infinitum.