As Bitcoin reached a new all-time high, the excitement among holders is palpable. However, this enthusiasm has been hijacked by the so-called "Bitcoin maximalists," who evangelize the technology as the only viable solution for Web3. They argue that every application and use case should be built exclusively on Bitcoin, ignoring the technical limitations and fundamental principles of the blockchain.
A Misconception About Decentralization
The maximalist attitude is fundamentally at odds with what Bitcoin was designed to achieve: decentralizing finance. Ethereum, on the other hand, was created as a foundation for decentralized applications (dApps) and smart contracts. While these two blockchains have distinct goals, they coexist in the Web3 ecosystem.
Novelties vs. Practical Solutions
The Bitcoin maximalists often cling to novelties like Ordinals, which represent information on-chain through inscribing data on single satoshis. However, this approach is inefficient and clogs the Bitcoin network. Binance’s decision to shut down support for Ordinals indicates that, despite its appeal to purists, it’s merely a novelty.
The Limitations of Blockchain Technology
Not everything needs to be decentralized or on-chain. The blockchain isn’t a panacea for all organizational systems. Some industries and applications work perfectly fine with existing technologies, and the blockchain should complement these systems rather than replace them outright.
A Reality Check: Not Everything Can Be Decentralized
- It’s not as simple as pointing to an industry or system and saying, "The blockchain would fix it."
- Striking a balance between decentralization and practicality is crucial.
- If it were easy to implement blockchain technology effectively, our industry wouldn’t have the dearth of use cases we see today.
Blending Web2 and Web3: A More Practical Approach
Instead of bridging Web2 and Web3, we should focus on blending the two worlds. By taking what works from each, we can create a more user-friendly experience. It’s essential to evolve and try new things, but it doesn’t help when Web3 builders fight complementary Web2 technologies.
All Technologies Exist on a Spectrum
- The internet remains the basis for everything we do.
- Web2 technologies will continue to dominate online infrastructure in the foreseeable future.
- Blockchain systems will have to coexist with more traditional systems that represent current standards.
Humans Will Always be Involved
Blockchain technology will always require human administrators and institutions to run the systems, at least to some degree. We should strive to create trustless systems that require minimal human input. However, even in these systems, humans need to intervene when things go wrong.
Distributed vs. Decentralized: A Misconception
Blockchains today are far more distributed than decentralized. Bitcoin is a prime example, with just 1.86% of addresses holding 90% of the total supply in circulation – not quite the epitome of decentralization.
The Importance of Establishing a Durable Ecosystem
Web3 builders should focus on establishing a durable, flexible, and wide-ranging ecosystem rather than relying too heavily on one blockchain or another. This approach will benefit the wider industry, even if that chain’s token has surpassed $100,000.
Conclusion
The Bitcoin maximalist mentality is a misguided approach to Web3. By recognizing the limitations of blockchain technology and focusing on establishing a durable ecosystem, we can create a more practical and user-friendly experience for all stakeholders in the Web3 space.
Subscribe to our Crypto Biz newsletter
Weekly snapshot of key business trends in blockchain and crypto, from startup buzz to regulatory shifts. Gain valuable insights to navigate the market and spot financial opportunities. Delivered every Thursday
By subscribing, you agree to our Terms of Service and Privacy Policy