Conversation

2) IS THIS INVESTMENT ADVICE?

3) NO.

4) There was a recent eruption when Michael Saylor came out as a BTC maximalist, which got me thinking about the concept in general. As a default I don't have a lot of sympathy for maximalism: it sounds a lot like the claim that something should win whether or not it's the best.

5) ("best" here defined broadly -- community matters!) But after thinking about it for a while, I guess I came to a phrasing of it that felt more reasonable to me. I'm not saying I believe this, or that others do--just that it was a useful steelman for me.

6) The classic dialog goes: BTC maxi: BTC dominance is 95%! non-maxi: what no it's not it's 50% BTC maxi: I'm only counting 'hard money' non-maxI: so you're saying BTC is good because it dominates if you don't include its competitors? BTC maxi: yes.

7) Alright that doesn't look so good for our friendly neighborhood maxi. But let's try that again. ------------- Maxi: yay BTC! Boo other stuff. Non: but ETH is better! It has smart contracts! Maxi: lolz BTC $ dominance is 95%, game over Mon: wait no it's 57%

8) Maxi: you're counting decentralized computers like ETH; BTC is 95% of hard money. It's already won. Non: wait why doesn't ETH count? Just because it's better? Maxi: yes, exactly! Non: ok this conversation is stupid.

9) Maxi: no, don't you see: Etherum _does_ have more use cases, which is great! That's good for it, and I'm happy. But imagine if ETH had better tech _and_ was better money. It would be waaay bigger than BTC. Like twice as big! But it's not, it's smaller. Why is that, Non?

10) Non: because of assholes like you? Idk really, yeah I'm confused why ETH hasn't beaten BTC yet. Maxi: See--the fact that ETH is 20% of BTC _despite_ having more use cases means that it _must_ not be worth much as money, for whatever reason. Non: but what reason?

11) Maxi: I don't know, but does it matter why? Maybe it's just because it was first. So it because the dominant accepted crypto-money. And then ETH came along. And, see, if the world decided ETH was money, then it would beat BTC. And that's bad. That would destroy crypto.

5:46 PM · Sep 22, 2020Twitter Web App

12) Non: why is better things winning bad? Maxi: _change_ is bad. Because if BTC could lose to ETH, then ETH could lose to newer chains, which could lose to... ...and you see, now the world has accepted that crypto-wealth is fleeting.

Replying to

13) Maxi: Sure you can stack sats, but by next year they'll be the wrong sats. And that means that no sats are ever safe. Crypto is a product of our collective imagination, where we all agree that BTC is money. Once we break that understanding, it doesn't come back.

14) Non: so you're saying that it's _evil_ to create more chains? Maxi: no, ETH is great, it's a decentralized global computer! But it's not money. BTC is money. And anyway, we got sidetracked. Even if I'm wrong about _why_, I'm clearly right that BTC is money.

15) Maxi: Because, remember, it has over half of total marketcap _despite_ having nothing else going for it. So it must have all the money. That's what the world is saying.

16) And so going back to BTC _money_ dominance-- Well you have to assign ETH's $40b somewhere, and it given how useful it is you should probably assign it mostly to that: its smart contracts and ecosystem. There just isn't much of that $40b left over to attribute to "money".

17) So once you strip out all other factors, and utility, you're left with Market Cap as Money. And most projects have already used their valuation on those other things, but not BTC. Because BTC can't do anything else, the $200b is _all_ value as digital money. --------------

18) (SBF again) So, idk, I'm not sure I really believe Maxi here: mostly I think it's just that first movers have a huge advantage, but that there's huge value in improving. But I guess I understand where he's coming from better than I did before, maybe. All of BTC is money.