The Money Maximalist vs. the Market Maximalist

A debate on the future of crypto

One of the biggest macro debates in crypto is related to the foundations of the industry.

Satoshi created an economic system based on math and cryptography. By aiming to be peer-to-peer electronic cash, the roots of crypto are based around money.

But emergent on top of that system, protocols like Ethereum have attempted to take blockchains beyond the most decentralized money, and apply them as open experimental technology.

This can be very well summed up by Naval’s excellent tweet on the subject:

The Bitcoin maximalist camp defines their argument around the ethics of money; that no one person should be able to censor you from transacting on the network.

The Crypto/Blockchain maximalist defines their argument around the free-market; that anyone can and should experiment to create stores of value in millions of unique assets.

It is clear today that the market maximalists are winning, but there is question whether or not they can/will ultimately succeed as networks.

If you want to dig further into the first camp on the “ethical” arguments around backing only the most decentralized money, Pete Rizzo on Saifedean’s podcast is a great primer:

Here is Pete Rizzo’s original piece:

The Ethical Argument for Bitcoin Maximilaism

https://www.forbes.com/sites/peterizzo/2021/09/29/against-cryptocurrency-the-ethical-argument-for-bitcoin-maximalism/

On the other side are the technologists seeking to expand on Bitcoin's success by producing thousands of experiments and value props not solely tied to base-layer money, decentralization, and censorship resistance.

This is clearly what is playing out in the market today, where anyone who wants can spin up their own token that is used as a form of value on a network of varying degrees of decentralization.

A nice primer on this is @hosseeb 's article:

Why Decentralization Isn't as Important as You Think”

https://haseebq.com/why-decentralization-isnt-as-important-as-you-think/

You can hear him discuss this paper on the Delphi Digital podcast:

There is tension between the free market race to build better money and the potential "ethics" of money censorship. Are we heading to a world where markets govern money, rather than governments?

I personally think both can be true, which places Bitcoin as akin to "the internet itself" and everything else as startups building on top of it.

This would mean that eventually all base money is denominated in BTC, even if held frequently in other assets.

We will seamlessly transport value across the internet at light speed between assets, with low friction and near-zero cost.

If the money is being upgraded via technology, this should give us new abilities.

That new ability is to seamlessly trade and hold millions of types of assets, all of which settle back to a “digital gold standard.”

By ultimately having a base layer to transact on which is uncensorable and unkillable, we will keep the best of what peer-to-peer electronic cash can give us.

By allowing for free market experimentation, token projects can give users new value beyond censorship resistance.

Like the internet, we need both a robust platform and millions of emergent businesses and applications…

What do you think? Read/listen above and form your opinion.


XX I’m David Sherry, I coach, invest, and discuss the overlap of investing, crypto, and the creator economy.

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