Bitcoin Core developer and Blockstream CTO is no friend of cryptocurrencies other than Bitcoin, famously calling Dash “snake oil.” However, he took his hating to a whole new level during a recent talk on side chains. Seemingly out of the blue, he brings up “altcoins,” or cryptocurrencies that are not Bitcoin, as a threat to Bitcoin. His few arguments quite frankly don’t make much sense, and seem to work against each other. Here’s why Greg Maxwell is dead wrong on “altcoins,” whether you’re rooting for one Bitcoin to rule them all or hoping for a diverse ecosystem.Bitcoin maximalist’s perspective
Altcoins are no threat to Bitcoin’s network effect
One of the arguments by Maxwell is that using other coins detracts from Bitcoin’s network effect, weakening and threatening its potential. The problem with this argument is, in a world where a new coin can be minted instantly without limit, the one big advantage that keeps Bitcoin on top is the strength of its network. If market dominance makes a coin better, then less-established coins are therefore inferior. Why would anyone use an inferior coin in any volume meaningful enough to threaten its superior competitor? Unless, of course, one coin is better than Bitcoin and makes inroads despite its network effect disadvantage, but clearly Maxwell doesn’t believe this.
Altcoins are test subjects for Bitcoin’s improvements
The next argument employed by Maxwell is that Bitcoin can simply implement any tech that another coin pioneers. If anything, that’s a ringing endorsement of trying out other chains to safely test new approaches before risking funds on a well-used network. By that logic there should be as many altcoins as possible, trying out all manner different tweak to blockchain technology: off-chain scaling, larger blocks, encrypted privacy, off-chain privacy, etc. Bitcoin can watch terrible ideas crash and burn, and snap up good ones using their considerable network adva...