Why Blockchain Maximalism Is Downright Foolish
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We see a lot of proponents of Bitcoin, especially with the recent run in price of late. This brought them out of the deep slumber since the alt-coins have lagged. The percentage of total marketcap made up by Bitcoin is now hovering around 60%. Some are even going as far as to state that alt-coins are dead and will not leave the crypto-winter.
Maximalism is a bad idea simply because it is essentially "putting all one's eggs in one basket". This is a really not a good move to make.
When it comes to investing, I often am not usually a proponent of diversification. Often people do this out of laziness while, ultimately, doing very little to reduce risk. Too many believe they are protected against market pullbacks by having assets in different sectors. Unfortunately, when things head south, all ships of late tend to sink.
That said, when it comes to cryptocurrency, I am a firm believer in diversification. This means moving away from blockchain maximilaism into the embracing of many different tokens.
There reason for this is simple: cryptocurrency is not so much financial as technological".
It is vital to remember we are dealing with technology. Thus, it is impossible to decipher who the winner will be.
To those who are old enough, there was a time when the early leader was Beta over VHS. Yet, isn't it ironic that millions of people have boxes full of old VHS tapes in storage while very few have beta. All those who made investments (bets) on beta were left out in the cold.
Does this mean I think Bitcoin is going to be replaced? Not anytime soon. I am optimistic about the future of the leading cryptocurrency, mostly as an eventual store of value.
Personally, I do have some BTC along with ETH and LTC. On Steem, I am amassing other tokens in addition to STEEM (SP). To me, this is a wise move since I cannot honestly tell you which coins are going to be around in 5 years. All of this is speculative since we are dealing with grand experiments.
Beneath all of this is the underlying technology of blockchain. I feel this is poised to severely impact every aspect of society over the next decade. Of course, this does not mean it is the final destination. In fact, the greatest likelihood is that blockchain is just an iteration on a longer process. There will be a technology to replace it. My view is this will be some time down the road.
Without a crystal ball, it is impossible to know who will come out on top. I feel cryptocurrency is offering people the opportunity of a lifetime. That said, while Bitcoin might be the grand winner, I am not willing to bet it all that Bitcoin will be the sole winner.
To me, diversification enables me to back both Beta and VHS.
The other aspect to all this is we need failures. It is from our failures that we learn. Even the scams provide us with feedback that can help us to do better the next time. All that took place in 2017 made the industry stronger in 2019, even though it didn't feel like it at the time.
It is up to each of us to support as much as we can. On a blockchain like Steem, we each are essentially venture capitalists using our stake (and time) to back projects we are optimistic about. Obviously, not all will work out as the road map states.
By spreading one's efforts and stake in different areas, we enhance the likelihood of success, both our own and of the entire ecosystem.
This does not happen if one has the maximalist view.
And that is why I think it downright foolish to take this approach.
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Totally agree and I think one of the most missed points about crypto is the part you wrote — it’s about technology more than finance.
Most people hear cryptocurrency and think payment method. When I hear cryptocurrency, I think about the technology and what it can be leveraged for. We are so early to a technology that will disrupt nearly every industry and finance is but one of many things that crypto can be used for.
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That’s weird. I have a different perspective. I think that all technology eventually gets commoditized. So what is really cool about blockchain is it provides an alternative incentive system on top of the bleeding-edge tech. So as cloud providers like AWS and MSFT start catching up with their BaaS solutions, they will have better and cheaper tech BUT they will not be able to replicate the community and mature token economies that grew up and embedded themselves in our new digital economy while they were focused on ketchup on the tech.
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Yes I have been diversifying my steem into other new tokens on the steem Blockchain to spread out my risk and earn from different tribes/apps. As I want to build an income from steem Blockchain or at least a supplement income and think it wise to spread the risk. So if one tribe/dapp fails I will only lose a small percentage of total income
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That is like saying that AOL would be the only successful portal to the internet back in 2000!
You mean 2000s?
Yes! Thanks!
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There has never been a single currency in all of human history. Very likely the trend is toward even more currencies than in the past. Seashells were valuable in the mountains, not so useful at the beach. It's these differences in ecosystem that cause value to not be equal across the board, and that's why trade exists. If only one thing ever has any value, then trade could never work because one would be trading something of no value for something of value.
This is so true. Diversification is a very important strategy to employ especially if you think the average price of a particular market is going to rise. There is such thing as spreading out too thin, though. No one wants a toxic asset.
Steem will get its credit soon
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Well yeah, bitcoin solved the problem of having digital items that cannot be forged, however alt coins re-introduce that problem by allowing an infinite supply of new coins to be forged! I don’t see this trend ending. Someone just makes a new coin and sells it for the real bitcoin(the only one)! Every time they do it, makes the price of BTC go up and their fake coins dump! I stopped buying new alts sometime after steem when I realized this phenomenon! Except for lately I bought a few more utility tokens like Weed, SMOKE, and LEO was my last! Not saying that was smart, just sometimes I fall for the same old fomo as everyone else! lol
I am not a maximilist since I am diversified, however BTC is the best!