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Posted April 6, 2019
As a libertarian for a number of years, I’ve been party to the debate over what we should call ourselves. Should we be anarcho-capitalists, anarchists, voluntarists, voluntaryists, libertarians, etc? While what we actually believe is what matters the most, being able to use a word to categorize what we are is also important. Not surprisingly, there’s also something of an identity crisis in the Bitcoin world.
The name “Bitcoin maximalist” has been given to and taken by people who believe that Bitcoin will come to dominate as global money by driving out competition because of its superior money qualities. Despite the basis of this position being in Austrian economics, the school of economic thought traditionally held dear by libertarians, some libertarians (and many non-libertarians) reject Bitcoin maximalism and instead claim that something else will win out or even that there could be a healthy economy with multiple moneys coexisting together.
The people who typically hold this view are those who don’t like that Bitcoin maximalists say that their non-Bitcoin cryptocurrencies are destined to go to a value of zero. It’s disappointing that instead of arguing on first principles against the maximalists, many libertarians resort to affinity scamming to steer people to bad economics. They frame it as saying that they prefer competition for money and now I’ve seen a prominent libertarian call himself a “competition maximalist” when ask about his view on altcoins after criticizing Bitcoin.
On the surface, it might seem like this is the correct position. In reality, however, it is nonsense mostly because it doesn’t have any substance.
1. What’s the outcome?
Many non-Bitcoin maximalists incorrectly believe that the outcome of a shift to cryptocurrencies would feature an economy with multiple coins coexisting. They point to silver being used in tandem with gold throughout history as their evidence for their claim. But the dual moneys were a result of suboptimal features of the more dominant one (in this case, gold). As gold increased in value, it became increasingly difficult to use it to pay in small amounts, so enter silver. Not only did this make economic calculation more difficult as there was not a single unit of account, but it also created another surface for governments to attack. Governments have legally fixed the exchange rates between precious metal currencies, artificially changing the exchange behavior depending on whether the fixed exchange rates are more than or less than the free market rates. And of course, instead of releasing control to solve the problems caused by their actions, government create new rules and laws that only send money economics further out of whack.
It’s unclear whether a competition maximalist wants a single cryptocurrency to dominate as one money in the end or whether he believes in a multi-coin world. That’s not a small issue to be unsure about.
2. Maybe you shouldn’t act like you know anything.
If you think about it, being a competition maximalist is quite the passive position. Forget about the economics for a minute; being able to claim the title of digital, decentralized censorship-resistant cash is not an insignificant achievement. If you don’t understand why Bitcoin is very different from altcoins like Ethereum or XRP and why one or some would be better than others, then you shouldn’t be giving any opinions on any of them. Murray Rothbard’s quote regarding economics rings true for Bitcoin: “It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”
Bitcoin can get technical very quickly, so if you’re understanding of either or both economics and software security is comparably to looking at a restaurant menu in a language you’ve never seen before, what could possibly qualify you to say that the person with you is wrong to say that everything on the left side of the page taste bad? It doesn’t mean you can’t participate or hope that you order a good meal, but it would seem odd if you had a strong opinion about the items on the menu.
Chances are the competition maximalist isn’t this ignorant, but they play the “competition” card to put on the friendly act in order to play to emotions.
3. It implies that Bitcoin maximalists are against competition.
One of the more pervasive and annoying straw men of Bitcoin maximalism is that it is anti-competition. Nothing could be further from the truth. Bitcoin maximalists reject altcoins not because they don’t think any should ever exist but because there have not been any that can actually compete. Not only does Bitcoin dominate in price, but it also dominates in network security. No altcoin is as expensive to try to attack as Bitcoin. This means that the world values Bitcoin’s network the most.
It’s also not insignificant that Bitcoin features a rule set that has not changed, which includes the extremely important hard cap of 21 million coins.
It is this combination of features that makes Bitcoin superior to any other past or present money or anything else trying to be money. If we expect money to be one thing, i.e. a unit of account, then why would we want to support or even care about anything that doesn’t have a chance to be better than Bitcoin? If something does have the chance to be better than Bitcoin, only then does it become interesting. Otherwise, it’s only a distraction that delays the adoption of Bitcoin and gives governments more time to wreak havoc with their control of money.
Furthermore, the idea that it’s good to be supportive of an altcoin or at least not critical of it is absurd. It’s possible to promote competition as a generality while also having very strong preferences in that market. If I open a hamburger restaurant and serve dog feces on a bun, no sane person would patronize my business to show that they support competition and free markets. Why should a Bitcoin maximalist have to do the same?
The existence of Bitcoin has exposed a lot of people in the libertarian community. Some are simply arrogant or ignorant, but some have been flirting with crossing the line into maliciousness. Fortunately, there is plenty of information out there to help set anyone on a good path. I recommend 10HoursofBitcoin.com, The Bitcoin Standard by Saifedean Ammous, and The Ethics of Money Production by Guido Hulsmann to avoid putting vacuous labels for yourself.