Defend Bitcoin Minimalism

Author: Vitalik Buterin

Original Title: 《In Defense of Bitcoin Maximalism》

Published on: April 1, 2022

For years, people have been saying that blockchain is the future, not Bitcoin.

The future of the world will not be a single dominant cryptocurrency, nor even a few, but many cryptocurrencies—winners will have strong leadership to quickly adapt to users' demands for scale. Bitcoin is an emerging token, and Ethereum will soon follow; it will be a newer, more vibrant asset that attracts a new wave of mainstream users. They do not care about quirky ideas or so-called "self-sovereign verification"; they keep an open mind and focus their energy on building fast and efficient blockchain DeFi applications and games.

But what if the above narrative is completely wrong, and the ideas, habits, and practices of Bitcoin maximalism are actually very close to being correct? What if Bitcoin is not just a "flash in the pan" that has risen due to network effects and is now outdated? What if Bitcoin extremists truly understand that they are operating in a hostile and uncertain world that they need to fight for, and their actions, personalities, and views on protocol design profoundly reflect this reality? What if we live in a world of honest cryptocurrencies (rarely) and fraudulent cryptocurrencies (many), and it is actually necessary to adopt a healthy intolerance to prevent the former from sliding into the latter? This is the argument that this article will present.

We Live in a Dangerous World, and Protecting Freedom is Serious Business

At the core of blockchain is a security technology—a technology that fundamentally protects people and helps them survive in such an unfriendly world. Like Galadriel's vial (from the novel "The Lord of the Rings"), "It is a light to you in dark places, when all other lights go out." It is not a low-cost light, nor a fluorescent energy-saving light, nor a high-performance light. It is a light that sacrifices all these dimensions, optimized for one thing and one thing only, when you face the toughest challenges in life and have a terrifying twenty-foot spider staring at your face.

Source: https://www.blackgate.com/2014/12/23/frodo-baggins-lady-galadriel-and-the-games-of-the-mighty/

Blockchain is used every day by people without bank accounts (and insufficient bank balances), social activists, refugees, and many other groups. Many use it as their primary means of livelihood and savings.

To this end, public blockchains sacrifice a lot for security:

• Blockchains require every transaction to be independently verified thousands of times before being accepted.
• Unlike centralized systems that can confirm transactions in hundreds of milliseconds, blockchains require users to wait 10 seconds to 10 minutes for confirmation.
• Blockchains require users to take full responsibility for security verification: if you lose your keys, you lose your tokens.
• Blockchains sacrifice privacy, requiring crazier and more expensive technologies to restore privacy.

What are these sacrifices for?

In short, to create a system that can survive in an unfriendly world and truly be "a light in the dark when all other lights go out."

Successfully accomplishing this task requires two key elements: (i) strong and defensible technology. (ii) strong and defensible culture. The key characteristics of strong and defensible technology are a focus on simplicity and deep mathematical purity: 1 MB block size, a limit of 21 million coins, and a simple Nakamoto consensus proof-of-work mechanism that even high school students can understand. The design of the protocol must be easy to prove and remain so for decades and centuries. The choice of technology and parameters must be a work of art.

The second element is an uncompromising, steadfast minimalist culture. This must be a culture that can relentlessly protect itself from corporate and governmental actors trying to absorb the ecosystem from the outside, as well as bad actors within the crypto space trying to exploit it for personal gain—there are actually many such individuals.

So what is the culture of Bitcoin and Ethereum really like? Well, let's ask Kevin Pham (a representative figure of Bitcoin maximalists and an advocate of Bitcoin SV):

Don't believe this is representative? Well, let's ask Kevin Pham again:

Now, you might say that these are just Ethereum people playing around, and eventually, they will understand what they need to do and what they are dealing with. But what about them? Let's look at who Ethereum founder Vitalik Buterin is hanging out with:

And this is just a small selection. A direct question that anyone seeing this should ask is: what is the point of meeting all these people publicly? Some of them are very upright entrepreneurs and politicians, but others are actively involved in serious actions that Vitalik would certainly not support. Is Vitalik unaware of how many of these people are politically at each other's throats?

Perhaps Vitalik is just an idealist who believes in talking to people to help achieve world peace, and a follower of Frederick Douglass's maxim of "It is easier to build strong children than to repair broken men." But there is a simpler hypothesis: Vitalik is a hippie-like globe-trotting fun-seeker who enjoys meeting important people and feeling respected. Not just Vitalik; companies like Consensys are very willing to collaborate with Saudi Arabia, and the entire ecosystem has been striving to find mainstream data for validation.

Now ask yourself a question: when the time is ripe, which ecosystem is more willing to put its foot down to refuse to censor them, no matter how much pressure is applied? An ecosystem of true globe-trotting nomads who genuinely care about being friends with everyone, or an ecosystem of people with AR15s and axes as hobbies (referring to Kevin Pham's Twitter image)?

Money is Not Just the "First Application" of Blockchain. It is the Most Successful One So Far

Many supporters of "blockchain, not Bitcoin" believe that cryptocurrencies are the first application of blockchain, but it is a very boring application, and the true potential of blockchain lies in bigger and more exciting things. Let's browse through the list of applications in the Ethereum white paper:

• Issuing tokens
• Financial derivatives
• Stablecoins
• Identity and reputation systems
• Decentralized file storage
• Decentralized autonomous organizations (DAOs)
• Prediction markets

Many of these applications have been launched and have at least some users. That is to say, cryptocurrency enthusiasts really value empowering the impoverished masses of the "Global South." But in reality, which of these applications actually has a large user base in the third world?

It turns out that so far, the most successful applications are savings and payments. 3% of Argentinians own cryptocurrencies, 6% of Nigerians, and 12% of Ukrainians own cryptocurrencies.

What other applications are anywhere close to today's actual adoption levels? Perhaps the closest is ENS. DAOs exist and are evolving, but today, too many of them attract wealthy people from wealthy countries whose main interest is having fun and using cartoon characters to satisfy their first-world needs for self-expression, rather than building schools and hospitals and solving other real-world problems.

Thus, we can clearly see two aspects: the "blockchain" teams, privileged individuals from wealthy countries who love the virtue of "going beyond money and capitalism," and are therefore excited about "decentralized governance experiments." The amateur hobbyists and the "Bitcoin" team, a highly diverse group of rich and poor people from many countries, including the "third world," who are actually using capitalist tools and freely sovereign currencies to provide real value for humanity today.

Focusing on Making Money Can Earn Better Money

A common misunderstanding about why Bitcoin does not support "richly stateful" smart contracts is as follows. Bitcoin truly values simplicity, especially low technical complexity, to reduce the chances of problems arising. Therefore, it does not want to add more complex features and opcodes that are necessary to support the more complex smart contracts in Ethereum.

This misunderstanding is, of course, incorrect. In fact, there are many ways to add rich state to Bitcoin; searching for the term "covenants" in Bitcoin chat archives reveals many proposals being discussed. Many of these proposals are quite simple. The reason "covenants" have not been added to formal functionality is not that Bitcoin developers cannot tolerate slightly higher protocol complexity after seeing the value of "rich state." Rather, it is because Bitcoin developers are concerned that rich state could introduce systemic complexity risks to the ecosystem!

A recent paper by Bitcoin researchers describes some methods for introducing covenants, adding some degree of rich state to Bitcoin.

The struggle with miner-extractable value (MEV) in Ethereum is a good example of this issue arising in practice. In Ethereum, it is easy to build applications that allow the next person interacting with certain contracts to receive substantial rewards, leading to traders and miners competing for this reward, significantly increasing network centralization risks and requiring complex solutions. In Bitcoin, building such applications with systemic risks is difficult, largely because Bitcoin lacks rich state and focuses on simple (and non-MEV) use cases, namely money.

Systemic contagion can also occur in non-technical ways. Bitcoin being just money means it requires relatively few developers, which helps reduce the risk of developers starting to demand free funds for building new protocol features. Bitcoin being just money alleviates the pressure on core developers to constantly add features to "keep up with the competition" and "meet developer demands."

In many ways, systemic effects are real, and a currency cannot "enable" an ecosystem of highly complex and risk-diversified applications without that complexity pushing back in some way. Bitcoin is the safe choice. If Ethereum continues its layer 2-centric approach, ETH-the-currency may maintain some distance from the application ecosystem it enables, thus gaining some protection. On the other hand, so-called high-performance layer 1 platforms have no chance.

Generally, the Earliest Projects in an Industry are the Most "Authentic"

Many industries and fields follow a similar pattern. First, some new and exciting technology is either invented or significantly improved to the point where it can actually be used for something. At the beginning, this technology is still clumsy, and almost no one can approach it as an investment due to the high risk and lack of "social proof" that people can succeed with it. Therefore, the first participants will be idealists, tech geeks, and others who are genuinely excited about the technology and its potential to improve society.

However, once the technology has proven itself sufficiently, norms begin to emerge—this event is often referred to as the eternal September in internet culture. These are not just ordinary norms of goodwill; they are part of a business norm, dressed in suits, that begins to search for ways to make money in the ecosystem—an army of venture capitalists equally eager to create funding to support them off the field. In extreme cases, outright scammers come in, creating blockchains with no social or technical value, which are essentially marginal scams. But the reality is that the line between "altruistic idealists" and "scammers" is indeed a spectrum. The longer an ecosystem runs, the harder it becomes to launch any new project with altruistic aspects.

The blockchain industry is slowly being replaced by values of short-term profit-seeking, overshadowing philosophical and idealistic values, one noisy agent being the increasingly large scale of pre-mining: cryptocurrency developers giving themselves allocations.

Source: https://twitter.com/RyanWatkins_/status/1394283802009145348

Which blockchain communities truly value self-sovereignty, privacy, and decentralization, and are making significant sacrifices to achieve it? Which blockchain communities simply want to increase their market capitalization and make money for founders and investors? The chart above should make it clear.

Intolerance is Good

The above illustrates why Bitcoin's status as the first cryptocurrency gives it a unique advantage that is difficult for any cryptocurrency created in the past five years to replicate. But now we encounter the biggest objection to Bitcoin maximalist culture: why is it so toxic?

The case for Bitcoin toxicity stems from Conquest's Second Law. In Robert Conquest's original formulation, the law states that "any organization that does not have a clear right wing will eventually become a left wing." But in reality, this is just a special case of a more general pattern, which is more important than ever in the modern age of relentless homogenization and conformism on social media:

If you want to maintain an identity that is different from the mainstream, then you need a truly strong culture that actively resists and assimilates the mainstream every time it tries to maintain its hegemony.

As I mentioned above, blockchain is a very fundamental and explicit countercultural movement that seeks to create and preserve something different from the mainstream. At a time when the world is divided into great powers actively suppressing social and economic interactions between them, blockchain is one of the few things that can maintain a global presence. As more and more people seek censorship to defeat their short-term enemies, blockchain steadfastly continues to not censor anything.

The only correct way to respond to "rational adults" trying to tell you that to "become mainstream," you must compromise on your "extreme" values. Because once you compromise once, you can't stop.

The blockchain community must also fight against internal bad actors. Bad actors include:

• Scammers who create and sell projects that are ultimately worthless (or worse, harmful), but cling to the "crypto" and "decentralization" branding for legitimacy (as well as highly abstract notions of humanism and friendship).
• Collaborators who loudly signal the virtue of cooperating with the government and actively try to persuade the government to use coercive force against their competitors.
• Corporatists who try to use their resources to take over blockchain development and often push for centralized protocol changes.

People can smile and oppose all these actors, politely telling the world why they "disagree with their priorities." But this is unrealistic: bad actors will work hard to integrate into your community, at which point it becomes psychologically difficult to criticize them with the level of contempt they truly need: the people you criticize are your friends' friends. Therefore, any culture that values amiability will easily give way in the face of challenges, allowing scammers to roam freely in the wallets of innocent newcomers.

What kind of culture will not be eliminated? A culture that is willing and eager to tell internal scammers and external powerful adversaries that unless they take the path of force, they will not be tolerated.

The Strange Crusade Against Seed Oils is a Good Thing

A powerful bonding tool that helps the community maintain internal cohesion around its unique values and avoid sinking into mainstream mud is having similarly spirited weird beliefs and crusades, even if they are not directly related to the core mission. Ideally, these crusades should at least be partially correct, hitting real blind spots or inconsistencies in mainstream values.

The Bitcoin community excels at this. Their recent crusade is the war on seed oils, seed oils extracted from plant seeds that are rich in omega-6 fatty acids, which are harmful to human health.

This Bitcoin movement has been questioned by the media, but when "respected" tech companies handle the topic, the media's attitude is much better. This crusade helps remind Bitcoiners that mainstream media is fundamentally tribal and hypocritical, and therefore the media's sharp slander of cryptocurrencies being primarily used for money laundering and terrorism should be met with equal disdain.

Be a Minimalist

Minimalism is often mocked by the media as a dangerous concept, and there is a notion that once other cryptocurrencies enter and take over, Bitcoin's supreme network effects will disappear. But the reality is that the minimalist arguments I described above do not rely on network effects at all. Network effects are indeed logarithmic growth, not quadratic growth: once a cryptocurrency is "big enough," it has enough liquidity to operate, and multi-cryptocurrency payment processing tools can easily add it to their collections. However, to claim that Bitcoin is an outdated pet rock whose value comes entirely from walking zombie network effects that could collapse with a slight push—this is equally completely wrong.

Cryptographic assets like Bitcoin have real cultural and structural advantages that make them powerful assets worth holding and using. Bitcoin is a great example of this category, although it is certainly not the only one. There are indeed other respectable cryptocurrencies, and minimalists are willing to support and use them. Minimalism is not just about Bitcoin for Bitcoin's sake; rather, it is a very real recognition that most other crypto assets are scams, and an intolerant culture is inevitable and necessary to protect newcomers and ensure that at least one corner of this space remains a corner worth living in.

It is better to mislead ten newcomers to avoid one good investment than to let one newcomer be bankrupted by a scammer.

It is better to make your protocol overly simple, even too simple to serve ten low-value betting programs, than to make it too complex to serve the core robust currency use cases that support everything else.

It is better to boldly stand up for what you believe in and offend millions than to try to make everyone happy and end up with nothing.

Be brave. Fight for your values. Be a minimalist.