Historically, the world economy has oscillated between periods of promise and fear when visualizing the future. These periods have been accompanied with varying levels of confidence, with individuals either having a clear idea of how the world will look or no clue at all. Peter Thiel calls these periods of indefinite vs. definite optimism and pessimism. [1]
The way one views the future will have a direct impact on their decisions today. A definite view will involve agency and the act of trying to understand and shape the future. An indefinite view is characterized by randomness, with thus no motivation to think about the future.
As an industry with varying levels of conviction and beliefs, I saw an opportunity to explore crypto across these four quadrants, discovering that there are parallels between Thiel’s definite view theory and crypto maximalism.
Accordingly, within this piece I will be exploring the similarities between these views, making the case that intolerance is a necessary ingredient if one wants to build the future.
Maximalism vs. Opportunism
One of the most prevalent crypto narratives is the idea of maximalism, which is essentially the belief that one coin (e.g. Bitcoin or Ethereum) or concept (e.g. Decentralization or Centralization) will rule them all. Relating back to Thiel’s concept of “Competition is for Losers”, it could be viewed as a belief in a monopoly. [2]
In the context of definite vs. indefinite world views, maximalism fits squarely in the definite quadrant, as maximalists are either optimistic about the future of their coin/concept or pessimistic about the incumbent system or any other future systems that may pose a threat to their throne.
Framing the Crypto Ecosystem
Going one level deeper into the crypto ecosystem at large, one can see holders exist in various forms.
First, there are Bitcoin maximalists, who hold a definite pessimistic view of the existing financial and governmental system. They believe only Bitcoin will survive with all other coins likely being a scam.
There are also Bitcoin opportunists, who don’t exactly know what the future will look like, and so see their investment as insurance, allocating a small portion of their portfolio to Bitcoin (“Allocate 1%” narrative). These individuals are indefinitely pessimistic.
Then there are the optimists, who see crypto as a fundamental paradigm shift that will accrue value. On the one side there are coin maximalists, who have extreme conviction in one coin/protocol. And on the other there are polycoinists, who believe in crypto but do not have a defined view of what the future of the ecosystem will look like. As a result, these individuals invest broadly across multiple chains and tokens.
I would note that the polycoinist could be argued to sit across multiple quadrants, justified by another popular narrative in the ecosystem related to the idea of a multichain future. This idea seeks to understand whether the future will include multiple blockchains, each serving an independent and necessary purpose.
First, there are the indefinite optimists who do not seek to understand how the future across chains will be built, and so given their allegiance to diversification, invest across many Layer 1s.
There are also indefinite pessimists, who, similar to the Bitcoin opportunist, see their investment in crypto as a lottery ticket, thus supporting the idea that a multichain future will increase their odds of success in a world of uncertainty.
However, definite optimists could also hold the multichain belief, supported by the idea that the proliferation of L1s reduces the risk of a single point of failure, which they believe is a necessary component of ensuring the long-term viability of the ecosystem.
As a result, while I would view the polycoinist across a spectrum, the below should paint a generalized framework of crypto market participants.
The Case for Maximalism
The above has explained market sentiment as it relates to beliefs and levels of conviction, with the below intending to first explain why maximalism is generally portrayed to have a negative connotation, and second how this portrayal may be incorrect.
The Most Intolerant (Meme) Wins
In my opinion, both the negative connotation and effectiveness of crypto maximalism can be in part understood through exploring Nassim Taleb’s concept of The Most Intolerant Wins, used to describe situations in which a small number of intolerant people can impact the rules of society.
One area that Taleb hypothesizes this to exist is within the imposing of virtue on others, conjecturing that, “…the formation of moral values in society doesn’t come from the evolution of the consensus. No, it is the most intolerant person who imposes virtue on others precisely because of that intolerance.” [3]
I believe this concept extends to crypto where a minority of individuals, in this case maximalists, drive a majority of the narrative. Crypto maximalism is dominated by a small group of individuals who are generally more controversial and tweet with the greatest frequency.
Add to this a reflexive loop wherein influential accounts spin out a narrative that is adopted by other influential accounts, amplifying and reinforcing the narrative’s dominance.
The ease to which this loop is maintained is improved through the use of “laser eyes” or “bat emojis”, clear signals that you are “one of us”, and therefore your narrative can be trusted.
The loop is further reinforced through incentivizes, as maximalists have built a following (and in many cases an income) based on maximalist content and are therefore disincentivized to diverge from that narrative, as it would risk the loss of followers and being ostracized from the community.
This intolerance coupled with reflexivity breeds a narrative that is both increasingly aggressive and durable, as the environment becomes so hostile that some maximalists fear they are not maximalist enough.
Intolerance is a Sliding Scale
As Vitalik argued in “In Defense of Bitcoin Maximalism”, maximalism can be seen as both advantageous and toxic. [4] Maximalism is good if viewed from the lens that it is an understanding that we are operating in an environment of uncertainty and hostility, and therefore certain concepts need to be defended vigilantly. However, maximalism could also be associated with toxicity in the sense that it opposes and hinders innovation of other tokens, concepts, and protocols, and therefore could hinder the growth of the crypto economy at large.
I would agree with Vitalik and also add that intolerance is best understood as a sliding scale.
If taken to the extreme, it is synonymous with dogmatism, where the narrative is unchanged from inception into perpetuity. However, I do not believe this is the intolerance reflective of the most successful protocols, as history has shown that crypto narratives have evolved materially over time. Demonstrated by Hasu and Nic Carter in Visions of Bitcoin, Bitcoin has held various themes throughout its history, morphing between narratives of cheap payments, anonymous currency, uncorrelated financial asset, and many others. [5]
With this in mind, the most successful projects have understood that while intolerance is important as it relates to changes to the underlying codebase, flexibility is powerful as it relates to narratives.
This is in line with what Matti Gags calls, “adaptive tribalism”, which describes the strongest protocols being those that find product-market fit while also being very good at continuously pivoting narrative-market fit. [6]
In these scenarios, the tribe is able to maintain the codebase (i.e. their bags) while simultaneously having the freedom to change the rationale (i.e. narrative) in light of new information. This intolerance coupled with flexibility creates a tribe that is extremely difficult to attack.
Dangers of Optionality
The intolerance discussed above ultimately amplifies the narrative of “maximalism = toxicity”, however I believe this is a mischaracterization of the value that maximalism can create, specifically as it relates to optionality.
As Thiel explains in, You Are Not a Lottery Ticket, the “official religion” of society has drifted into “super short time horizons, with anything that takes longer than a year considered unreal and fake because we can have no opinions about the future.” [7]
With this in mind, it is not surprising that maximalism is viewed negatively (or misunderstood) by the crypto community, as the recent abundance of capital has led to an abundance of optionality, which as Matti Gags explains in Unfollow the Money, could be understood as, “there is no urgency for a future to arrive”. [8] In other words, a world of indefinite optimism where everything is about statistics, “keeping your options open”, and diversification.
This belief system can be extremely dangerous when looking to shape the future, with Thiel posing the logical question, “how can the future get better if no one plans for it?” [9]
Maximalism takes the opposite approach, where beliefs are of high conviction. These individuals have a defined view of the future and can therefore prepare for it (in the case of pessimism) or shape it (in the case of optimism).
It is fair to ask, “At what point does optionality simply mean lack of conviction?” However, I believe we need to strengthen our view that optionality follows a nonlinear relationship with lack of progress.
Optionality of the collective is sourced from the conviction of the individual. Without definite views, we ultimately live in a world of infinite optionality where nothing gets done.
Closing Thoughts
Maximalism is a sliding scale, and the line can become blurred on where maximalism makes sense and where it is detrimental to the ecosystem. However, I would argue that definite beliefs are important and necessary to fuel innovation, as without them no one would be motivated to build and protect a future they deem better than today.
There are concepts and freedoms worth fighting for and sometimes whether your beliefs are shared with the masses is irrelevant, as one does not change the world through listening to a focus group.
I believe we need to rethink and reframe the idea of maximalism, as doing so creates the opportunity to shape the future how we desire.
And with this in mind, I believe that sometimes we need to be more intolerant of others’ tolerance. Sometimes we need to be a maximalist.
Thanks to Matti Gags and Dave Merin for their valuable input.
Sources:
[1] Peter Thiel, Zero to One
[2] Peter Thiel, Competition is for Losers with Peter Thiel (How to Start a Startup 2014: 5)
[3] Nassim Taleb, The Most Intolerant Wins: The Dictatorship of the Small Minority
[4] Vitalik Buterin, In Defense of Bitcoin Maximalism
[5] Hasu, Nic Carter, Visions of Bitcoin
[6] Matti Gags, Adaptive Tribalism
[7] Peter Thiel, You Are Not a Lottery Ticket
[8] Matti Gags, Unfollow The Money
[9] Peter Thiel, Zero to One