Crypto maximalism is by far the strangest but most fascinating thing in the crypto space. People back their chain of choice like it’s their local football team. Ever since taking a deep dive into this space I never really understood maximalism. I personally watch a ton of football (actual football, not handegg) but don’t support any team, however I noticed striking similarities between the hardcore football fans and crypto maximalists. So this is my 50IQ attempt at understanding maximalism.

Ideology

Theoretically, tribalism shouldn’t exist because everyone who is in the crypto space is ideologically aligned in many ways. Everyone has a certain disdain for the traditional system, everyone is skeptical of fiat currencies and the monetary policies surrounding them, people want to opt out of traditional society, people don’t like banks, and most people have that slight sprinkle of degeneracy in their system (some more than others). Yet, with so many similarities, you see some very toxic arguments and fights. Bitcoin maxis crucify ETH maxis, ETH maxis crucify AVAX or SOL maxis, and everyone crucifies ADA maxis. Other than this you even have maxis for applications. You have link marines, Frognation and many others.

The best way to describe the infighting between such a similar set of people is through what Sigmund Freud describes as the “narcissism of minor differences”. He basically says that when people are so alike, it is the marginal differences that are used as the basis for aversion and toxicity towards the others. This show of anger tends to be much stronger when the differences are marginal. In crypto, the marginal difference boils down to a person’s investment decision. People may have found Cardano through their favourite youtuber, or Ethereum for its decentralization, or AVAX for its usability. At the end of the day it is a minor difference in investment decision amongst ideologically similar people that creates such huge infighting. Luckily it’s all behind a screen.

Community and belonging

Community is everything in crypto. Building an engaged community is often paramount to the success of your protocol. Often times, when you become part of a strong and growing community within crypto, there is this romanticized sense of solidarity & belonging. Given that most new participants in crypto are often young & not rich, when they find themselves in a group of likeminded people it creates a sense of emotional arousal. It’s exciting to be part of “the mob” sometimes.

When their belief and participation in this community pays off, it often makes their bond to the community even stronger. People often never want to leave simply because of what they have accomplished and experienced through being in the community. While it’s fair to think that all participants in any type of market have to be completely objective, we have never seen this kind of community formation around financial products/services ever before. When money is at stake it only makes the vested interest of people in that community that much larger. This leads on people to become tribalistic in some way.

Identity

Related to the point above, a person’s brand/identity formation also tends to play a role. When a person is early to a protocol, they consciously or subconsciously build their online persona/brand around this protocol. They constantly write articles about it, they write twitter threads about it, they publicly invest in it, they are extremely involved in the community and so on. This makes them either willingly or unwillingly stuck to this identity they have created. They can be willingly stuck because of how emotionally attached they are to the community or how attached they are to the vision of the protocol. Or, they can be unwillingly stuck due to the community. You have built a brand around this protocol and have been involved in it for so long, then you suddenly “jump ship”, the other community members get extremely pissed. We have seen it with Bitcoiners who started participating in Ethereum. The Bitcoin community absolutely crucified these people and in some cases even sent death threats. This however only keeps a person stuck publicly, they can do as they please privately and even build a new persona/brand.

Laziness

Another possible explanation is Laziness, but Laziness in two different ways. One is the laziness of those who already made it and just can’t be bothered anymore. Some people who got rich of Ethereum cannot be bothered to get stuck in with AVAX NEAR LUNA SOL ATOM or whichever other protocol there is. They tend to lose that same passion and fire under the belly that they had before they made it, and due to this comfort they become de facto maximalists of their chain of choice.

The other laziness comes from the bagholder syndrome. These are the people who found a community they liked and joined in, but they joined in relatively late. They bought the coin near the top and have been holding it down ever since. While they hold these coins, they either get married to their bags or too lazy to look at whether there are other opportunities in the market that they are missing. Lo and behold, while they held their bags down 80% without ever venturing out of their community, some other people have made life changing money by participating in other places. This invokes a sense of irritation in them which often makes them toxic towards the other people who did better.

Conclusion

My personal conclusions from understanding maximalism is don’t be a maximalist. While it is good to be involved in communities, there is major opportunity cost from being stuck. You may want to be a rotatooor profit maxi with no loyalty to any protocol, but they also tend to get crucified by the protocol maxis. Crypto is a vast land of opportunity, everyday there is a new chance and everyday there are major changes that take place within the space. If you get stuck, you will most likely get left behind. Why stick to one protocol when you can benefit from participating in multiple. Innovation & change is at the heart of crypto, being a maximalist is often the opposite of this.

Thank You for reading,

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