In this episode, I talk with Bitcoin legend Peter Todd. We talk about the
essence of Bitcoin, why it worked whether other attempts at digital
currencies failed as well as key topics such as fungibility, lightning and
why other projects are scams.
So much arrogance packed into one sentence.
> If you understand economics and finance and how markets work you'll be a maximalist.
So if you aren't a maximalist, you don't understand economics and finance and how markets work?
> It's more efficient to have one currency than a bunch of ones.
Efficient for whom? Obviously it's efficient for maximalists, they already know how to use it and likely have plenty of it. How efficient is it for about people that don't? Is it efficient for people who subscribe to the theory that inflationary currency is also useful?
Do we need to draw the Venn diagram? Lots of people do understand markets, fewer people are maximalists. Some maximalists don't understand how finance and markets work, so we'd expect the intersection would be small. This quote would indicate the "I am a maximalist" rests squarely within the larger "I understand markets" one.
>Efficient for whom?
There is overhead , risks , and security considerations when dealing with multiple technologies and currencies. There is always slippage and risk when one is "bartering" between currencies. This comes at a cost. This does not mean altcoins and fiat will cease to exist, of course they will continue to exist with new ones created and old ones falling in disuse.
There is also a precept that one should always use the tool that is best suited for the job. In Internet vernacular, just because TCP is so versatile doesn't mean that UDP isn't better for certain problems.
Maximalists don't tend to suggest altcoins will dissapear, simply that they will become increasingly irrelevant because using them adds friction, costs, slippage, and risk. The reason why many fiat currencies exist is because this inefficiency is deliberately added to give local control to individual states at a cost. Whether it be loyalty points , local currencies, local fiat ... these will continue to exist and compete with BTC as it grows and eventually overtakes the USD as the reserve currency of trade and perhaps one day becomes the most stable unit of account.
Seems weird though that a maximalist might argue for one coin, yet argue for decentralization.
The second part I don't get is the following items would be more efficient if they are only one but probably not the best plan in reality: language, countries, leader/president, central bank, one religion, and so forth.
The third part I don't like is how Peter Todd talks down to people by putting a false argument into his sentence. Suggesting you can't possibly understand economics, an extremely broad topic, unless you agree with his view point as he is the arbitrator of what common sense is.
I am certainly not anti-Peter Todd. I think it is ok to disagree with him on some specific items but not on everything. I feel I need to add this comment due to a somewhat toxic nature in Reddit where a lot of posters jump on you if your opinions don't agree with <insert high profile cryptocurrency name here> 100%.
>Seems weird though that a maximalist might argue for one coin, yet argue for decentralization.
They are not arguing for decentralization of everything. In fact most maximalists I speak to have a very nuanced opinion of decentralization and can and will discuss the benefits , costs and tradeoffs of such. Many would specifically say that centralization is preferred in many matters.
>the following items would be more efficient if they are only one but probably not the best plan in reality:
Maximalists don't suggest that people should not have choice or be restricted from creating their own coin(remember with UASF many maximalists were going to create and follow a new chain even if it was a minority one.) The recognition that there will be one dominant currency (just like we have now with USD) is simply an understanding of economics regardless the benefits or tradeoffs.
>The third part I don't like is how Peter Todd talks down to people
His argument either is correct or isn't and being offended by those being terse is another matter entirely.
“It is more efficient to have one currency then a bunch of currencies” would be a stand alone terse statement that you can agree with or disagree with. I disagree but am ok with this part of his comment and I don’t jump to the conclusion he knows nothing about economics.
Unnecessarily adding the condescending portion that other people who don’t agree with your terse statement don’t understand economics is a douche bag comment that adds no value.
Its more akin to this statement -
> " If you don't believe me or don't get it, I don't have time to try to convince you, sorry."
He would come off as less dismissive if he went on to elaborate why , but no one has time to give a 3 hour long lecture on economics either.
My suggestion to you if you are curious is to try and understand why US dollars are a majority reserve currency worldwide and why USD holds a majority control when dealing with international trade worldwide , or some other advice is to read books like https://mises.org/library/human-action-0/html/c/247
Unfortunately economics cannot be explained in a sound bite
He is actively trying to be dismissive instead of just sticking to the terse statement.
A little like your wildly assumptive and unnecessary dismissive comment suggesting I lack knowledge about USD reserve currency. Do we know each other? 😂
But ok, we can disagree.
I have no idea your knowledge base on economics , just giving some helpful advice if you are curious.
Some misconceptions people have about maximalists-
1) maximalists do not suggest altcoins will cease to exist
2) many maximalists are perfectly happy to leave Bitcoin if it fails and support another chain
3) few maximalists suggest that fiat currencies or competing currencies will cease to exist
4) maximalists do not suggest that it is inevitable that Bitcoin will become the dominant currency , simply that it is the most likely project at this time to fulfill this role (just like the USD is at this time). Bitcoin can indeed fail and is indeed an experiment