The Toxicity of Bitcoin Maximalist Thinking

The title opens with new words never before heard in the Bitcoin world.

Let’s dive in.

Background

You have heard it said how Bitcoin is a ponzi scheme.

You have probably thought Bitcoin is a ponzi scheme.

But it’s due to not realizing the idea of static and dynamic BTC.

For example, right now it is $97k ish. Let's say I am holding 1 BTC.

Then it goes to $100k next week. And I cash out.

$3k easy.

If I am a good human being with an analytical economics mind, I will wonder:

Why did I make $3k just sitting on my ass?

“Of course”, I made money because the person who bought from me at $100k got Bitcoin at the price they deserve. And whoever didn't buy should “Have Fun Staying Poor” .

This is very toxic Bitcoin Maximalist thinking.

Toxic maximalism is so 2022 (coz of FTX and Friends).

At the latest.

It is so old news even Saifedean Ammous doesn't bother crypto bros anymore.

We're all moving on.

The smarter me decides there must have been a lot of factors at play.

Say:

1. Saylor bought more.
2. More people discovered cheap international remittance with BTC.
3. A new ETF whale just jumped into the pool. Making a wave.
4. Bitcoin is scarce and now Bitcoin miners are moving to hodl their 2024 minings.
5. Trump made a statement and many people started moving crypto.
6. Some people's DCA habits are now hitting a nerve.
7. A new Bitcoin Circular Economy was created.

Very good.

Now,

What do you notice with all the above examples?

Bitcoin is moving!

So while I and my bitcoin were sitted on our asses, dozens of people moved their bitcoins this way and that, while in-flowing more dollars, yen, shillings, etc into the Bitcoin ecosystem.

That is why the price went up.

So the price doesn't go up by magic.

Finding good reasons to make Bitcoin more dynamic = Number go up.

Static bitcoin = Number go down.

Here’s the reverse scenario:

1. I sat on my bitcoin.
2. You sat on your bitcoins.
3. Saylor sat on his bitcoins and didn't want to move more into his stash.
4. People stopped DCA-ing. The stash they have, they suffice, would be enough to retire on. They rather waited out the next 5 years.
5. Nothing cool happened. Basically.

Price tumbles.

So “Dynamic Bitcoin” is not really a new term.

Same goes for “Static Bitcoin”.

They are singular terms I came up with to explain all that stuff.

BTC has to move if it is to give value to BTC.

If BTC stops moving, then a pretty JPEG of it is more valuable that a real bitcoin.

BTC is money, after all. It must move.

Whether you and I DCA bitcoin or move it in a circular economy, whether a celebrity like Elon moves our buying habits or whether it is a relative we want to remit cash too, the bottom line is the movement.

The movement of value, so that you and the person on the other end appreciate the good things that can happen courtesy of BTC.

But moving Bitcoin even more than we are doing right now will require energy.

It is the #1 way to make it really dynamic.

There is plenty of energy to move Bitcoin

Before there was Bitcoin, there was the 2008 financial crisis.

Caused by a housing bubble.

However, Investopedia reports that oil and gas prices fell dramatically, leading to a contraction in credit for the sector and falling revenues for oil and gas companies.

By how much did prices fall?

"Oil prices fell from $133.88 in June 2008 to a low of $39.09 in February 2009. Over the same time period, natural gas prices fell from $12.69 to $4.52.” - Investopedia.

Let's unpack these figures.

Firstly, oil is not like lavish housing. During a market crash, people will dump dreams of lavish housing fast. To keep staying in their tiny 2-room apartments/rentals.

They will still want to use their cars.

What if they've been laid off?

Then they will drive around looking for work. They will also cook more food, since they are staying at home all the time.

In other words, consumption of oil and gas is not what suffered. What suffered was the willingness to pay exorbitant prices for oil and natural gas.

They were soon paying real prices. Same with food.

Here's more data seen with an energy consumption graph for the period.

Taken from Our World in Data.

As the above images show, there is a miniscule dip in 2009 likely due to this financial crisis, and another miniscule dip in 2020 due to the covid-19 pandemic.

The dips are so miniscule they account for less than 1% change in consumption.

Meanwhile, prices are falling more than 70% !

What does this tell you?

It's all a fugazi.

Oil and gas prices are artificially high. Even right now.

That is the truth. Crises always correct them so that they nearly match production costs.

Just like in the world of bitcoin mining.

Why do they hike and who hikes them?

I can blame the oil and gas industry. Blame it and it's shrewd, greedy players.

But the other person to blame is the person in the mirror.

During a financial crisis, I revert to common sensible mode and only pay these fossil fuel moguls only what the oil is fairly worth.

During good times, I tip to my heart’s content.

I am a generous creature, a human.

Even to billionaires.

None of them ever forced me to pay more.

As the customer, I set the price.

Right.

Fossil fuels are however getting cheaper. Which is why Exxon is no longer the most profitable company in the world.

Maybe we discovered more reserves, or we found other things to care about more, but still, it is plentiful.

Has to be.

Otherwise, it would be very expensive.

And Exxon and it's buddies would be quadrillion dollar corps controlling the entire world.

People would fight for oil to the teeth, before they fought for Apple iphones.

It's that important.

Ask this guy if you don't believe me.

Forced Dynamism is good

In physics, there is something called a forced oscillation.

Like when a playground swing is forced to start moving.

In the same vein is the logic of turning stranded, “useless” energy resources into energy for bitcoin mining equipment. Even if you don't need the money or the energy.

Yet.

In case the energy is needed for other things, no problem. Cut off the mining equipment.

It is a true hedge against the uncertainties of energy scarcity (like when fossil fuel supply is cut during wars).

You have bitcoins mined, and you have a power source.

Win-win.

Bitcoin mining equipment is a big investment though.

For modest players, companies like Rootstock have provided a way to increase the dynamics of one's bitcoins using EVM smart contracts on their RBTC coins.

Basically, before Rootstock, we had to code all Bitcoin transactional logic ourselves, one logical movement at a time. E.g. If one wanted to trade BTC, one had to be available on one's PC / Phone in every trade.

Pressing each button themselves, eyes opened and fingers alerted by a can of caffeine.

Now with Rootstock, we can automate some actions.

Go work our abs as our EVM robots work out those now dynamic BTC (called RBTC).

BTW, RBTC > WBTC. Even if WBTC is also EVM compatible Bitcoin.

Iykyk.

Iydk, nyk.

But if one is low on funds to play with, then Bitcoin evangelism is always there for them. It is the most accessible way to help keep the momentum in BTC, without spending cash. Be it fiat or crypto.

So when you see a Bitcoiner preach BTC to you, and tell you to buy some, they are forcing dynamism.

Don't chase them away.

Give them a listening ear.

It will go a long way in the fight for financial freedoms.

Conclusion - Tokenizing BTC for Dynamism

In a recent interview with Natalie Brunell, Michael Saylor said a few uncomfortable (fiat-ish) statements.

For example, from 14:13 to 14:16 in the linked highlight, he says:

“There's nothing wrong if Joe Rogan issues Rogan token” - Michael Saylor

I wasn't happy.

Saylor is my hero and I have 4 questions.

Why would he say something like that?

I mean why should Joe Rogan issue fiat tokens as he wants instead of buying, learning, or valuing BTC?

Isn't this how FTX ruined us?

I thought there is no second best?

That said, Bitcoin itself is not a whatever token.

That much I agree.

Something else could be a token while BTC remains money and an asset.

So if Joe Rogan tokenizes his content and pegs it to BTC, or buys BTC as a reserve for it, that would be ok.

The dynamic ‘Rogan Token’, circulated alongside Joe Rogan's massively viewed content, would also infuse some momentum into their pegged BTC.

Natalie concluded the interview nicely:

Natalie*: So if I can summarize everything you just said … we are witnessing the digitization of fiat currencies, and eventually the tokenization of real world assets … with Bitcoin being really the pristine collateral and the deep store of value..*

Saylor*: I think so*

So,

Imagine all that economic activity sitting on top of only 21 million bitcoins.

You bet, they'll be very dynamic.

Like electrons.

Very high frequency dynamism.

Not because people are hodling their BTC stash.

Because they are continually buidling on them and moving them, hence us, towards a better future.

***

P.S. : When will the D.O.G.E start operations in the crypto space?