Why I am a Bitcoin Maximalist

When it comes to investing in cryptocurrencies, I have a very simple criterion. I ask the question: "Is it bitcoin?" If the answer is no, I move on...

I realize not everybody thinks the way I do. Many people are attracted by the allure of altcoins, and invest because they believe in the project, or because they hope to make some money quickly, or out of FOMO (fear of missing out) as they see the price rocketing and don't want to miss out on the opportunity.

Beware of Scams

Some altcoins start with good intentions and fall by the wayside. Or succumb to the temptation of greed further down the road.

Some altcoins are out and out scams. They start with a pre-launch mine, or an ICO (Initial Coin Offering) to attract investors to raise working capital. The founders and investors receive huge amounts of the new token as a reward. Then a massive publicity campaign is launched, retail investors see the price of the new token rising, jump on the bandwagon and buy, which pushes the price ever higher. When the price is high enough, the founders/investors sell, making a fortune. The price of the token plummets, and retail investors are left holding the bag. This happens over and over again in the crypto space.

The crypto exchanges encourage this behavior. They make their profits from transaction fees, and they earn transaction fees whether their customers win or lose. (Please note: I'm not implying that every crypto project that launches with an ICO or a pre-mine is a scam.)

Some altcoins are launched ethically and fairly, with genuine aspirations to make the world a better place to live in. Unfortunately they typically don't gain much traction in the long term.

GRIN

Let's take GRIN as an example. I haven't looked into GRIN in any depth (there's no point, it fails my 'is it bitcoin?' test...) but, on the surface, it appears to be a legitimate, well-intentioned project.

GRIN was launched on January 15, 2019, on the Mimblewimble blockchain (named after a Harry Potter spell). It uses proof of work. There was no ICO, no pre-mine. It had a fair launch. What's not to like?

Well - what is the point? People holding or receiving or mining GRIN tokens just exchanged them for bitcoin. Bitcoin is already there. It has the head start. People just exchanged their GRIN for bitcoin.

There is only room for one ethically-launched, proof of work, decentralized crypto token. Bitcoin is already there. You can't reinvent the wheel.

When bitcoin was launched it was just Satoshi Nakomoto mining tokens. He/she/it/they have never sold any of their tokens. (Unlike Vitalik Buterin, who sold 25% of his Ethereum holdings, becoming fabulously wealthy in the process.) Satoshi and the Cypherpunks were high-minded people - they were more interested in ideas than money.

Bitcoin didn't even have much of a market value for most of the time the founder was involved. And Satoshi walked away, leaving Bitcoin to run on auto-pilot, governed by user consensus. Which it does, very successfully, to this day.

In Conclusion - What is Wrong with GRIN?

Probably nothing. Only it had the misfortune to come after Bitcoin. You can't reinvent the wheel.

Even if GRIN were successful, it would never be able to catch up with Bitcoin's momentum, global uptake, and high hash rate (mining power).

And, ultimately, the proof is in the market. When GRIN launched three years ago, it's initial price was $261.65. At the time of writing (June 22, 2022) it's price is $19.42. It's highly unlikely that the price will improve significantly.