Bitcoin Maximalism: What Bitcoin is, (and what it isn’t)

By Richard Boase

Bitcoin is an economic system for valuing information, and ‘Bitcoin Maximalism’ is a term that was first introduced to describe a bitcoin blockchain that could be used to store and reference any and all kinds of data.

Due to a quirk of history, there are currently three competing chains in the bitcoin ecosphere which claim to be ‘The Real Bitcoin’. But only one meets the above definition of the Bitcoin Maximalist, and it isn’t BTC, or BCH, despite their claims to the contrary.

Bitcoin SV, (BSV), led by Dr Craig S Wright, recently released the ‘OpenBSV’ licence which allows any developer to build their project on the BSV blockchain, whilst also introducing huge block sizes to the ecosystem on which to develop.

This is true Bitcoin Maximalism, a vision of ‘The Blockchain’ as a replacement for ‘The Internet’, that provides a platform which anyone and everyone can build on, in order to transact and conduct their business.

The value proposition to the market of a very large block-size should not, therefore, be underestimated, misunderstood or generally brushed aside. In fact, one could argue that Bitcoin’s ‘store of value’ (if not used as merely a contractual term), lies in the value of information stored on the blockchain, rather than being an inherent property caused by its scarcity.

This is because a general purpose blockchain can be used to store and serve any kind of valuable data, and so it stands to reason that the market will both want and need to buy the native token, BSV, to store and retrieve their data from the blockchain giving it both value, use and accountability in the future economy.

This development presents a world of opportunity to the wily speculator who’s interested in capitalising on its ‘store of value’ properties, but more importantly, it also provides real-world use cases for bitcoin as both a ‘medium of exchange’ and a ‘unit of account’.

Much has been made by the BTC camp of Bitcoin’s use as a ‘store of value’ without actually providing any capacity for the blockchain itself to do things other than conducting large value transactions, mostly on exchanges.

Similarly, the BCH camp (Bitcoin Cash) have made much of the use-case for bitcoin as a ‘medium of exchange’, focusing on uses outside of the information economy, whilst profoundly misunderstanding the original value proposition of Bitcoin, and how its economic model was intended to work at scale in the real world.

Indeed, much of BTC’s ‘store of value’ qualities have been misattributed. Privacy advocates have inferred that total anonymity and un-traceability are desirable qualities in money, and thus that the more they hide the value of their wealth, the more wealthy they will become.

Equally, so BCH advocates have asserted that since money must be useable as a medium of exchange, they should be able to use it anonymously to buy and sell goods and services on the black market, by providing extra protection to those who want to transact in the dark.

Neither BTC nor BCH, being based on blockchain technology lends themselves well to total anonymity, so whilst there might be some market demand for these types of instruments, it is vastly overshadowed by the huge need and demand for transparency in accounting and finance in a global information economy, where data needs to be valued, bought and sold in both tiny quantities and vast quantities.

As such, both BTC and BCH camps are aiming for the wrong target, a target which if they successfully hit, will most likely destroy their market valuations.

In a sense, these two are trying to access the old ‘dark pools of liquidity’, the tax havens and offshore accounts which are mostly maintained by criminal networks for the purposes of money laundering.

Neither, however, function as a way to store, value and serve information.