Maximalism Always Fails

When the combustion engine was invented, horse maximalists believed that only horses are the legitimate, honest mode of transportation. Everybody was using horses — or like Bitcoin maximalists often argue — "it has a network effect". The combustion engine also meant that millions of people would be put out of job since there would be no need for horse carriages, horse groomers, street shit shovelers and the like.

There are many cases of maximalism in the world of economics. Some people believe that only gold matters. Some others believe only the government can offer protection. Some others believe that anarchy is the only way forward. What all maximalists fair to grasp is that nature does not favour maximalism. It favours variation and adaptation.

When a novel idea takes over society most are afraid of change. The old regime goes defensive and so they try to suppress it. This is what happened when Bitcoin came into the scene. The FIAT advocates tried to undermine its effect in order to maintain the status quo. Again, same thing was attempted from our dear horse maximalists in the industrial revolution. As Bitcoin becomes more and more popular — you guessed it — Bitcoin maximalists are advocating that it is the only true powerful cryptocurrency and the heart and soul of all blockchains.

This might be true at this point in history. None can argue otherwise because there is no other legitimate successor for it to become the new status quo. Nonetheless, some blockchain technologies offer a new form of maximalism that almost create a paradox. Blockchains of blockchains as they are called, dismantle the idea of maximalism.

The opposite of being a market maximalist is (probably) being diversified. In other words, instead of picking just one currency/technology you pick an array of choices that given you more exposure (and cover) from the uncertainties of our world. Much like most people did not know about Bitcoin back in the day, most have no idea about the next big thing that will make economic maximalism obsolete.

Projects like Cosmos, 0x, Kyber, Wanchain create blockchains that connect all other blockchains. No longer will Bitcoin have the dominant network effect. Instead of having to go through Bitcoin to make a transaction one can go any other way, including traditional currencies. This is the power of the Blockchains of Blockchains. Bitcoin has managed to have a network dominance because it was the first technology of it's kind and the only root for other blockchains to get actualised. It had no competitor. In a race where you are running alone, well, you will always be first.

People who focus only on Bitcoin are maximalists who are going to lose big time in the near future — much like Fiat and horse maximalists. Those that diversify to everything on their sight are probably the ones better off since none can predict the future. Those who can accurately predict the percentages of dominance in the market are going to win big. In all likelihood Blockchains technologies are the new Internet 3.0 so investing in the network rather than the first "Netscape Browser" will give you a much better and longterm cover.