As a new entrant into the world of cryptocurrencies, you may have wondered if bitcoin is the only coin you should focus on, or if it is wise to focus on alternative cryptocurrencies known as ‘altcoins’. You may have even come across the terms ‘Maximalist’ or ‘Pluralist’ in reference to the crypto community’s stance on digital currencies. If you aren’t sure what these terms mean, or if you don’t know which school of thought is more valid, then continue reading for a breakdown of each crypto philosophy.
What is Maximalism?
Bitcoin Maximalism is the idea that Bitcoin is the only cryptocurrency that will eventually be used in the cryptomarket, and possibly even the whole economy. The idea stems from the fact that not only is Bitcoin the most well-known cryptocurrency, but it is also tried and true. So far Bitcoin has withstood the test of time and has proven to be true to its purpose as a decentralized, secure, and robust form of currency. In other words, Bitcoin will eventually become a crypto-monopoly as all of the other digital currencies fade out and become worthless.
Bitcoin Maximalist Argument
Bitcoin Maximalists have many good reasons to think that there is only one solid coin worth anyone’s time. The most obvious reason is that Bitcoin is practically name-brand. The word cryptocurrency is interchangeable with Bitcoin and many people don’t even know that other cryptocurrencies exist. In this sense, Bitcoin already has the most leverage over popular interest in the cryptomarkets.
As we can see in today’s crypto-economy, the rise and fall in the price of Bitcoin is always correlated with the rise and fall in the price of altcoins. In a sense, all other cryptocurrencies are dependent on Bitcoin. To Maximalists, this is a testament to Bitcoin’s importance, and it is hard to imagine a world where the value of Bitcoin doesn’t directly affect the value of altcoins.
Additionally, having just one cryptocurrency to focus on is more secure and bypasses the risk of indulging in scam coins. Having only one option means developers’ resources can be dedicated to the growth and stability of Bitcoin. Allowing just anyone to develop a digital coin, market it, and set it free onto the internet opens up the possibility for scams, which is something that is already a plague within the cryptomarkets today.
It’s important to note that Maximalism isn’t just confined to Bitcoin. Supporters of many other coins such as Ethereum or Monero believe that these coins will eventually come out on top and will become the only digital currency of any value. Ironically, this sort of belief in a favorite coin is partly what fuels the market’s tendency towards Pluralism.
What is Pluralism?
Pluralism is the idea that the future of cryptocurrencies will be diverse; people will have an assortment of cryptocurrencies to choose from depending on the situation at hand. Many cryptocurrencies will fade into nothingness, but overall there will be several coins that specialize at a given purpose and will do so effectively.
Arguments for Pluralism
Anyone who has followed the evolution of technology, in general, can recognize that it tends to diverge in terms of the companies that offer different varieties of the same product. Smartphones are a great example of this. There are dozens of different smartphone manufacturers out there even though their products more or less serve the same function. Some smartphones offer slightly different designs, hardware, or software features separate them from the rest. Cars are another example of this trend. So it’s not strange to imagine a world where there are multiple cryptocurrencies that do slightly different things.
Another advantage of crypto-Pluralism is the freedom to choose a preferred currency. While some people may always prefer a specific currency for any number of reasons, most people would probably use a cryptocurrency depending on the situation. The problem right now is that not many people understand the use cases for all of the individual altcoins out there.
Pluralism also reduces the risk of centralization and monopolization which is something that the crypto community has always been concerned with. Having a single digital asset out there creates an opportunity for some entity to take control of the infrastructure and turn it into something that primarily benefits those who are in control. This can be prevented if there are alternatives in place just in case one of the top cryptocurrencies becomes compromised. Multiple cryptocurrencies may also fuel innovation through competition, similar to the way companies work today in a capitalist society.
Who Will Win?
The world is still in the earliest stages of crypto-adoption so it is not clear exactly which school of thought — Maximalism or Pluralism — is the most valid. Bitcoin is currently the most valuable and well-known, but there are many altcoins with great ideas and an abundance of supporters. Only time will tell how the cryptomarkets eventually shape out, but in the meantime make sure to stay educated on the various terms being thrown around so that you can make informed decisions.