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Why Bitcoin Maximalists Have Tragically Been Proven Right: 2022 Marks the End of an Era

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2022 was a difficult year for many people.

So much money has been destroyed at the hands of centralized altcoins and crypto platforms.

So many have suffered as a result of placing blind faith in these projects. Stories abound of people losing their life savings after holding it in a platform like FTX or Celsius.

But there’s one group who has, sadly, been vindicated at the same time.

For years, so-called “maximalists” have been trying to warn others of the dangers posed by centralized crypto projects and platforms. As has now become clear, these warnings mostly fell on deaf ears.

The “toxicity” of these maximalists suddenly looks a lot more sobering.

Photo by Karolina Grabowska: https://www.pexels.com/photo/close-up-shot-of-bitcoins-5980585/

Perhaps the suggestion of Bitcoin maximalism that altcoins and centralized services tend to not be what they seem was insulting.

Or maybe it seems like Bitcoin maximalists promoting Bitcoin self-custody over crypto collateralization have fallen victim to some sort of strange cult-like ideology, as some critics have claimed.

But is that the case?

Bitcoin Maximalism: FTX Collapse Explained

The details of the FTX collapse have been covered extensively in countless articles, podcasts, and videos. There are certainly some interesting details [see my podcast episode on the subject here: https://www.youtube.com/watch?v=6PXlovQwDDk.

But for the most part, I want to focus on one thing: the harmful, or, some might say, toxic, concepts that allowed this type of thing to happen in the first place. First, let’s look at a quick rundown of the FTX collapse.

This simple 11-step explanation by journalist Matt Levine describes quite well just how a scam of this magnitude was orchestrated:

Credit: Matt Levine

In essence, a PoS coin like FTT gave SBF and FTX a license to print money by using FTT as collateral for dollar loans. Dollars that were then used to buy everything and everyone. This always leads to catastrophe, whether it be in crypto or the traditional financial system.

SBF has since been put in jail before being released on $250 million bond. His parents put up part of the bond for his release, although it’s unclear as of yet who else participated.

There are at least two other individuals who helped secure SBF’s bond, although as of now, they remain anonymous. SBF’s legal team has requested that the identities of these people be kept secret. We’ll see how the story continues to play out in the months to come.

But it’s okay, SBF is very sorry:

Bitcoin Represents Hope

The Bitcoin protocol includes a hard supply cap of 21 million BTC. This cannot be changed. If someone were to try to change the code, full nodes would hard fork the original protocol away, and the new chain would become worthless like Bitcoin Cash (BCH) or the countless other forks of Bitcoin.

For the first time in human history, everyone can now have access to hard, unconfiscatable money. As Bitcoin maximalist Michael Saylor puts it, Bitcoin gives property rights to billions of people who otherwise have none. “Life is hopeless” for billions of people, Saylor has said, referring to the fact that fiat currencies are constantly devalued by those who print the money.

This equates to a devaluation of life – the time and effort spent to earn that fiat currency.

Bitcoin provides an “escape hatch,” as Christine Lagarde, former head of the IMF and current president of the ECB put it, from the perils of the perpetual loss of savings that ensue when central banks print money. They do so with no concern for the average person and no consent from the public.

In fact, most people do not even know that to a large degree, their financial fates lie in the hands of a very small group of unelected officials.

Thanks to Bitcoin, that is no longer the case.

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