LeoGlossary: Bitcoin Maximalist (Maxi)

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A Bitcoin Maximalist (Maxi) is one who is involved in cryptocurrency and believes that Bitcoin is the only coin that has any value. Everything else that is created in cryptocurrency is destined to be worthless.

This is a group that is ardent in their ideology and technological principals.

Bitcoin Maxis not only feel is Bitcoin the only cryptocurrency, they believe it is the only currency worth holding.

Satoshi's Vision

Supporters of Bitcoin believe in the vision established by the creation of Bitcoin. The anonymous founder, Satoshi Nakamoto, presented a vision in the Bitcoin White Paper for electronic cash. The goal was to create a payment system that worked without financial intermediaries such as banks.

Maxis believe that all other cryptocurrency is not in keeping with Satoshi's original tenets. This not only extends to the technology but also the economics associated with the coin.

Bitcoin operates utilizing a consensus mechanism called Proof-of-Work (PoW). New coins are created by computers, called miners, solving cryptographic puzzles. The one that solves it is able to produce the block, thus collecting the block reward.

One of the major innovations presented by Satoshi was solving the double-spend problem in a decentralized manner. Earlier attempts such as Bit Gold were not able to achieve this without some type of centralized quorum.

Limitations Of Bitcoin

Bitcoin is a network that does not scale very well. One of the biggest arguments against PoW is the energy use. Mining utilizes a lot of electricity. This calls into question the future of Bitcoin as well as other blockchains using this same consensus protocol.

Proponents of Bitcoin claim that miners are incentivized to find cheaper sources of energy. Many believe this will accelerate the adoption of renewable energy. The biggest expense miners have is electricity thus providing the motivation to get that cost reduced as much as possible.

Another argument in support of Bitcoin is the value presented by a decentralized monetary system that has no centralized company behind it. The miners ensure the network keeps running, providing people with the ability to interact with a permissionless payment network.

This leads to another issue. Bitcoin does not excel at scalability. The dispute over block size led to the creation of Bitcoin Cash. The network still can process 8 transactions per second which is obviously ill-suited for global financial operations.

The solution presented is sidechains such as Lightning Network. By moving most of the transactions to a second layer, the scalability is improved greatly.

Another problem is presented at this point. Satoshi's vision did not provide any means of layer 2 incentivization. All rewards are for the providers of base layer infrastructure. Lightning Network provides no rewards other than transaction fees. This has opened it up to criticism about the potential for centralization since node operators are going to need to monetize in some manner. We see the assertion that Wall Street institutions might be the ones who step in at this point.

In spite of the challenges, most in cryptocurrency believe having a decentralized, permissionless payment system that is highly secure has value. Bitcoin Maxis believe it is the only network and currency that is worth having.

Digital Gold

There is one view about the future of Bitcoin as a digital version of gold. Just like the precious metal was used as money over the centuries, many feel Bitcoin will fill this same role. When it comes to an investment portfolio, many hold a small portion in gold. Bitcoin supporters believe it can serve the same role.

Some even state that there will be a time when central banks have Bitcoin as part of their reserve holdings. The same could happen with corporations. Whether either of these happen remains to be seen.

The digital gold idea stems from the belief that gold was what build the present monetary system. Bitcoin Maxis believe that this coin is the next phase of the development.

Unfortunately, views of this nature tend to overlook large parts of monetary history. There are many where metal backed coins were really fiat currencies.


Bitcoin, like all blockchains, utilizes distributed ledger technology (DLT). This means it becomes a ledger of transactions that are housed on uncorrelated computers, all running the same version of the software. As new blocks are added, the ledger is updated and accepted based upon consensus.

Since we are dealing with financial transactions, the ledger looks similar to that of a bank or brokerage firm. It is not possible to build text databases on the Bitcoin network. One of the main premises of Ethereum was to become "the world's computer". By adding smart contract capability, this network helped to established decentralized finance (DeFi) and Non-Fungible Tokens (NFTs).

The Taproot update provides optimism that Bitcoin will be able to expand beyond just being a financial ledger. One of the early impacts was the placing of small NFTs on Bitcoin through the ordinal protocol.


The total amount to be mined is 21 million. So far, a bit more than 19 million are completed. The supply is further limited by the belief that 4-5 million Bitcoin are in addresses where the private keys were lost.

Bitcoin Maxis believe that having a capped distribution is the biggest advantage to Bitcoin and why it will be the only money. Many call this "sound money" yet it is really fixed money. Opponents point out that fixed money has historically pooled, creating greater inequality than we see now.

Another problem is the lack of elasticity. With a fixed amount, we end up with deflationary pressures. Supporters believe this is exactly what is required for money since they believe in the quality theory of money. Unfortunately, this has repeatedly been proven to be false.

Inflation is a subject that Bitcoin Maxis often rail again. It appears the idea of inflation is bad so the view is deflation is good. This is another challenge to the Maxi viewpoint. Deflationary periods are extremely painful for humanity. The best example was the Great Depression during the 1930s.

Without elasticity, the business cycle completely obliterates an economy. During the expansion phase, without it, the growth will be stunted. After the peak is reached and moves towards the trough, contraction occurs regardless of the money supply. A limited coin distribution is not going to stop this.


Bitcoiners were the first to apply the concept of HODL to cryptocurrency.

This stands for Hold On for Dear Life. It is a twist on the idea of holding. The premise is to hold onto Bitcoin regardless of what the market is doing.

As a strategy, this paid off well over the last decade. Bitcoin provided the best return of any major asset class over that time. Those who got involved in the early days are not sitting on wallets that are worth a lot of money.

In spite of attacks from those in the existing financial system, it is evident that Bitcoin is not only surviving but likely to keep forging ahead. The price was affected by the most recent bear market. This is nothing novel as the coin has a great deal of volatility associated with it. The runs during the bull market can be huge and the reverse is true.

HODL is showing strong hands in spite of drawdowns in value that make others quiver.


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