Bitcoin Maximalism: What it Means to be a Cryptocurrency Loyalist?
What does Bitcoin Maximalism Mean?
Bitcoin appeared almost 10 years ago after the financial crisis that hit the world in 2008 and 2009. The famous virtual currency has succeeded and has attracted the attention of many different investors all over the world.
At the same time, other cryptocurrencies were created. However, one of the main critics that cryptocurrencies receive is that the space is full of speculative investing. And this might be real in some way when several ICOs do not have real proposals to improve the market.
However, there is a group of Bitcoin supporters that aims to put Bitcoin above all the other cryptos in the market. These individuals are known as ‘Bitcoin maximalist.’
Bitcoin maximalists believe that Bitcoin is the best cryptocurrency in the world. Although they know that it has some issues such as scalability problems and lack of smart contracts, they are convinced that in the future Bitcoin would offer everything what investors are searching for. That means that these supporters think that, at some point, Bitcoin would monopolize all the market.
Vitalik Buterin, Ethereum’s co-founder said that Bitcoin maximalists do not want to have a market with several cryptocurrencies competing. He then mentioned that Bitcoin maximalists want to monopolize cryptocurrency investments and control the market. Then, he explained that there is a big difference between those that want to make Bitcoin better and those that ‘only’ want Bitcoin to progress.
Bitcoin Maximalists believe that the underlying blockchain is also an important factor to take into account at the time of judging why Bitcoin is the ’best’ cryptocurrency in the market. In this case, they mention the example of Bitcoin Cash and Bitcoin Gold. Both of them have just a few differences compared to Bitcoin. However, they remain very valuable in the market due to the fact that they are related and connected to the Bitcoin network. Other blockchains are not as successful as the Bitcoin one.
Another important argument that maximalists have is related to the high barriers that other companies need to face to enter the market. It is not so easy for other companies to build a product for investors to accept in such an easy way. As the process of making cryptocurrencies mainstream, is a slow one, companies would always choose older and more stable networks rather than new ones.
At the moment there are thousands of different virtual currencies available in the market. But none of them was able to reach Bitcoin and its dominance. Bitcoin has proved to be successful and reliable compared to other newer competitors that are not able to face small challenges.
Finally, one of the latest arguments made by Bitcoin maximalists is related to portfolio diversification. They explain that those investors that want to diversify their portfolios with other altcoins are going in the wrong direction. Bitcoin has always influenced the price of other virtual currencies in the market. That means that altcoins do not help at the time of building a diversified portfolio. The best what users can do is to make leveraged investment in Bitcoin rather than using other coins.
At the time of writing, Bitcoin is the most important and valuable crypto in the market. According to CoinMarketCap, Bitcoin has a market capitalization of $116 billion dollars and a price of $6715 dollars. It’s dominance is 53.3%.
The second most valuable virtual currency is Ethereum, with $23 billion dollars market cap. That shows that there is a big difference between the first and the second most valuable currencies in the market.