The case against toxic eth maximalism or: How I Learned to Stop Worrying and Love the Orange Coin

Background

To be clear, this post is about eth maximalism as it relates to antagonizing btc. I’m not criticizing eth maximalism as it relates to other smart contract platforms as I believe that’s firmly warranted. Rather, I’d like to take a btc-focused perspective to clear up what I believe are common misconceptions on this and related eth subs, why I think the maximalism is unwarranted and what’s in it for such maximalists to be more open-minded.

Recently I’ve read (and posted) in some threads re: the flippening (which I feel have become more frequent) and some common btc critiques seem to be that it’s slow in its evolution or boring and eth does everything better so btc is doomed to fall off the leaderboard. Others then chime in with affirmations which reverberate off the echo chamber; dissenting viewpoints seem to be ignored or not welcomed. To me this feels like a bunch of tribal apes walking around with one mutterring “blue coin good, orange coin bad!”, and the rest of the apes cheering and clapping, with some clapping against the ground or doing a mini-handstand of sorts with the feet kicking up, and others joining in to yell “orange coin is meme coin like dog coins!” (or other such FUD, the proverbial poo fling of the crypto world).

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What’s special about btc?

I do not mean to insult by using the ape analogy, it’s just a funny image and I am one of you apes (and I don’t mean this in the WSB-style of ape of which I’m not a big fan, I’m just keeping with the theme mentioned above). I first got into crypto by buying btc a few years back and then quickly discovered eth. Eth excited me much more and while I didn’t sell or stop buying btc (or eth), I favored eth to where today it’s about 2x of my btc stack. After btc’s resurgence earlier this year I started listening to what that guy Michael Saylor had to say and started going down the btc rabbit hole in a much more earnest way. I don’t want this to be a deep dive into “why btc” as this post is already getting too long, and I’ll instead leave some recommended reading and listening links at the bottom, but the main conclusion I want to highlight is that btc is the best store of value and hardest money that’s ever been invented, in large part because of its extremely predictable and reliable monetary policy (its supply schedule and fixed scarcity).

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Why does that matter?

The global economy is in many ways being manipulated by central banks to an unprecedented degree, and as fiat purchasing power dissipates, investors look for safe stores of value to maintain (or hopefully increase) their purchasing power. Gold, at ~$11trillion or 10x the current market cap of btc, has historically been one of the best stores of value, but investors are beginning to favor btc as a superior store of value, a digital form of gold for today’s digital world.

However, there are hundreds of trillions of dollars in additional asset classes which are also used as stores of value - sovereign debt (bonds issued by nation states, such as US treasury bills), real estate, equities, etc, and many of these have a much poorer real return when considering real inflation (which is on the rise, due to the money printing by the central banks). Bitcoin is increasingly eating up the market cap and monetary premium (i.e., the ‘increased’ market value of an asset such as real estate that is placed on it because investors believe it’s a store of value or investment, above its intrinsic market value as a house to live in) which accounts for its growth and why its market cap and price will continue to grow, as game theory predicts that if consensus grows that btc is the best store of value - it’s in everybody’s best interest to buy it while they can / before its price continues to rise. I believe this accounts for some of the explosive price growth that is being predicted.

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Where does this leave eth?

I believe investors favor btc as a store of value over eth because frankly, eth has a lot more moving pieces and a much less predictable monetary policy (because the exact issuance and burn mechanism are not well known, and because there are changes being introduced in the first place), and these are seen as added risk which they seek to avoid. As a store of value, btc, plainly, is the best store of value there is (and I’ll stay out of the ‘currency’ / ‘medium of exchange’ war though I do think lightning and other layer2 solutions are very promising for btc). Where does that leave eth? Well, eth can have nearly everything else! As the best (at least for now*) smart contract platform / decentralized world computer, the possibilities are nearly endless, and eth should also accrue tremendous value and continue its meteoric rise alongside btc. It’s incredibly hard to quantify and predict what that value will be - all I’m saying is that btc isn’t going to fall out of favor, and while the flippening may well happen - it is very far from guaranteed.

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Why does this ruffle the feathers of eth maximalists?

I think for 2 main reasons:

1. Identity and values - Generally, I think beyond those who are in it strictly for speculative investment reasons, eth attracts engineers and developers who appreciate its technical merits and possibilities, and therefore find btc boring. Btc tends to attract libertarians / political science types, economists and others from the world of finance and business. I’m generalizing here and there is of course plenty of overlap and counter examples, but this has been my observation based on consuming plenty of content over the years. These 2 camps are often not very interested in what the other is interested in, and fail to see the big picture of what makes each of them special.
2. Financial - I think Michael Saylor used this analogy in one of the podcasts I listened to: imagine when Apple and Microsoft were really going head to head in the 80s and 90s, if instead of that rivalry being based on just consumers’ preference for their platform of choice, those consumers were also each given shares of stock in each company. Now there is a lot of financial motivation to get really riled up about the other side. I think the same thing happens in crypto, where big believers of particular coins have a lot to gain and lose by the rise and fall of various coins, and that can intensify their reactions when a “rival” coin is getting all the attention and/or price appreciation.
   

What’s in it for you to be more of a mediumist?

1. *Financially, a hedge in case eth loses its dominance as a smart contract platform - I believe eth and what is planned on its roadmap is enough to maintain dominance and increase the lead against anything out there today. But just like many tech giants who have fallen over the years, what if something new comes along that may possibly be truly better? We may think it unlikely but it’s not out of the real of possibility. I believe btc on the other hand has a much, much surer bet of remaining the preferred store of value digital asset - while it only does 1-2 things (today), it does them extremely well. While both btc and eth are going to continue to surge over the long run, btc is much more likely to keep its value while eth, frankly, may one day be dethroned - you can see this in the way that barely anyone is trying to replace btc for what it does well, while eth is continuously surrounded by competition, some of whom are even giving it a bit of a run for its money in some ways (though none of whom have a better story for the trilemma, at the moment). Therefore, holding some btc in your portfolio is a way to continue to grow it at incredible rates, but I would say in a slightly safer way than it is to hold eth and in a much safer way than it is to hold any other crypto assets outside of btc and eth.
2. Sleep better at night - instead of being threatened or angered by positive developments for the orange coin, you can now be happy too!
3. Follow really interesting developments - as mentioned, while there is little changing in terms of new use cases on btc, there is a tremendous amount of change in how the world is adapting to btc - some really interesting game theory, economic, geopolitical, human rights / values discussions and changes taking place. If that’s not of interest, that’s fine, but there is a lot going on .
4. A healthier community - it’s a shame that a post such as this, or really, nearly any mention of eth on r/bitcoin would be instantly deleted and the user likely banned, but that’s because they’re on the other side being scared of the blue coin for good reason. We can at least be a healthier community with a more open mind without needing to bring up FUD or talk badly against the orange coin because the orange coin is actually pretty cool.

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Feedback and discussion are welcome, but please, let’s try to keep the poo flinging to a minimum.

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Recommended reading / listening

1. https://www.theinvestorspodcast.com/bitcoin-fundamentals/bitcoin-michael-saylor-a-masterclass-in-economic-calculation/
2. https://medium.com/the-bitcoin-times/the-greatest-game-b787ac3242b2
3. https://www.whatbitcoindid.com/podcast/bitcoin-and-the-us-fiscal-reckoning
4. https://www.youtube.com/watch?v=wA_fI-wUqnw
5. Most anything this guy writes (also his longer form stuff on LinkedIn) - https://twitter.com/JasonPLowery/with_replies