Toxicity and Maximalism
Toxicity and Maximalism
Irritating gadflies are better than charming scammers
In this issue:
Heresy from a high priest
Bitcoin is not a steak dinner
The health benefits of toxicity
Heresy from a high priest
On Tuesday of this week Nic Carter of Castle Island Ventures made an anodyne announcement about having invested in wallet-based authentication startup Dynamic and Bitcoin Twitter briefly lost their collective minds. Carter is a pretty notable Bitcoin proponent who speaks and writes regularly on the subject, particularly about Bitcoin’s energy use. I include links to his content on Something Interesting fairly regularly. Apparently a lot of Bitcoin maximalists assumed his support of Bitcoin was a declaration of loyalty and consider him investing in an Ethereum focused startup to be a kind of betrayal. They handled it like a bad breakup.
In response to the controversy Carter wrote a scathing essay calling out the laser-eyed crew for a lack of curiosity and intellectual honesty, listing off a blistering string of the failed promises of maximalism:
"The testable tenets of Bitcoin maximalism as I interpret it are getting bleaker all the time. The S2F model is discredited. The ‘halving’ is moronic. The sidechain thesis did not happen. Liquid did not succeed. Lightning is interesting, but not everything. Bitcoin is not the reserve currency of anything, not even the crypto industry." — Nic Carter
The essay has a lot of huffy "Well, I never!" energy but Carter makes good points. Bitcoin has undeniably failed to deliver on the original vision of maximalism and increasingly maximalism as a term has shifted from a descriptive belief in the power of Bitcoin’s network effect to a proscriptive belief that everyone who works on anything other than Bitcoin is either a scammer or being scammed.
For a narrow but noisy slice of the population Bitcoin is not just an asset but a lifestyle and anyone who questions the dogma is an enemy agent. They aren’t just convinced in the value of Bitcoin, they are emotionally invested in it. They think Bitcoin is synonymous with eating steak and voting conservative and lifting weights and owning guns and hating seed oils. They don’t just want you to save with Bitcoin, they want you to mortgage your house to buy more.
Bitcoin is not a steak dinner
To be clear, I think Bitcoin is the best money in history and the only blockchain that I believe has sustainable long term value. I am an Ethereum skeptic, I am unimpressed with most altcoins and I write pretty frequently about scams I think my readers should avoid. I agree with the worry that there are lots of predators in crypto trying to sell bad faith products to new participants in the market.
I am also a political liberal who drives a hybrid vehicle and supports gun control. I wear a CryptoPunk as my profile picture. I think Bitcoin will be worth a lot of money eventually but I also called out the S2F model as silly hopium all the way back in January of last year. I try to be upfront about both the weaknesses of Bitcoin and the strengths of competing platforms. I fail a lot of the cultural purity tests of the Bitcoin maximalists and I have seen in practice how that limits my audience as a content creator. C’est la vie.
The impulse to fold Bitcoin and other crypto technologies into wedge issues for the endless Red/Blue culture war is incredibly tiresome. Bitcoin is neither left nor right, neither conservative nor liberal. Keyboard warriors who rabble-rouse to defend Bitcoin culture are radically misunderstanding what Bitcoin is. There is no such thing as Bitcoin culture. Bitcoin is aggressively neutral by design, equally useful for both dissidents and dictators. Bitcoin is for enemies.
I considered myself a Bitcoin maximalist for years but eventually concluded that this tribe of angry, dogmatic loyalists had co-opted the term and last year I decided it didn’t apply to me anymore. So I agree with Carter that these ill-informed zealots are noisy, abrasive and embarrassing. I don’t agree with them and I don’t think they are representative of Bitcoin users as a whole.
But I do think grouping together everyone who is strongly (even overly) critical of non-Bitcoin projects and dismissing them as "toxic" is both wrong and dangerous. Navigating crypto markets requires balancing both curiosity and skepticism and most newcomers are better off erring on the side of skepticism. Maximalists are annoying but they are not an existential threat to newcomers or the space as a whole. Open-mindedness is good, but the same can't be said of everyone who preaches open-mindedness. The most dangerous people in crypto are more likely to be critics of maximalism than maximalists.
Irritating gadflies are better than charming scammers.
The health benefits of toxicity
To be clear (again) I don’t see anything wrong with Carter having invested in Dynamic. There is nothing alarming or problematic about working on or investing in a competing network. Dynamic seems like a reasonable investment — aimed at a genuine user problem, building network-agnostic infrastructure, etc etc. They have no plans to sell a token or to raise funds from the general public, so I see no reason for anyone to be upset by them existing or Castle Island Ventures investing in them.
In this case I think the Bitcoin immune system is having an allergic reaction. But that doesn’t mean I would turn it off! Consider the gentle, urbane critique from Hasu at the top of this section. I like Hasu and I think his content is interesting and insightful. I sincerely recommend it. But consider also this: Hasu has been co-hosting a podcast (Uncommon Core) with Su Zhu, co-founder of Three Arrows Capital (3AC) since 2020.
Uncommon Core is a pretty good podcast! But Three Arrows Capital was a multi-billion USD fraud whose collapse has destroyed trillions of USD in wealth across the industry. As we’ve written about 3AC more-or-less directly caused the collapse of BlockFi, which Castle Island was actually heavily invested in. In other words, Zhu and his open-mindedness to Terra and stETH personally cost Carter millions, probably more than his entire investment in Dynamic.
I agree with Carter that the maximalist crowd is loud, uncouth and logically inconsistent. I don’t agree they are "an awful sickness that pervades the space." A single 3AC causes more damage than all the laser-eyed Twitter accounts combined. It’s not toxicity that plagues the space, it is fraud. We should be rooting out the Richard Hearts, the Craig Steven Wrights, the Do Kwons, the Su Zhus. Focusing on the poor manners and faulty logic of a loud but unimportant group of maximalists is only giving the real predators cover to hide behind.
Toxicity is bitter but harmless. Be more worried about the things that seem sweet.
