As the price of Bitcoin continues to reach new all-time highs, the maximalist movement within the Web3 industry remains in full swing. Proponents of this ideology argue that all Web3 technologies should be built exclusively on top of Bitcoin, ignoring the technical realities and potential consequences of such a narrow focus. In this article, we will explore why the blockchain isn’t right for everything, and how a more nuanced approach to decentralization can benefit the industry as a whole.
The Problem with Maximalism
Bitcoin maximalists often evangelize about the technology’s benefits, but their zealotry can be detrimental to the broader Web3 ecosystem. They argue that Bitcoin was designed to decentralize finance, and therefore, it should be used for everything. However, this ignores the fact that Ethereum was specifically created as a foundation for decentralized applications (dApps) and smart contracts.
A Brief History of Maximalism
Take Bitcoin Puppets, for example. People are paying exorbitant amounts for images supposedly drawn by a child. These images are intentionally sloppy and basic but shouldn’t exist in the first place. Similarly, Bitcoin Ordinals, while a creative solution to representing information on-chain, are inefficient and clog the Bitcoin network. Binance’s decision to shut down support for Ordinals indicates that they are merely novelties.
The Limitations of Decentralization
The reality many Web3 builders continue to ignore is that the blockchain isn’t right for everything. It isn’t true that every industry would benefit from decentralization or that an immutable ledger would improve every organizational system. Some things work perfectly fine with the technologies we have today, and the blockchain should complement these systems rather than replace them outright.
The Balance Between Decentralization and Efficiency
It’s also not as simple as pointing to an industry, system, or methodology and saying, "The blockchain would fix it." Striking the right balance of decentralization is a complex task, and it’s essential to know when it would be beneficial to record transactions immutably. If it were that easy, our industry would likely have more use cases than we do today.
Blending Web2 and Web3: The Future of Blockchain
While the trend over the past few years has been to "bridge" Web2 and Web3, we should instead shift our focus to blending these two worlds. This allows us to take what works from each and create the best user experience possible. It’s good to evolve and try new things, but it doesn’t help when Web3 builders fight complementary Web2 technologies.
All Technologies Exist on a Spectrum
Another reality Web3 builders need to accept is that all technologies exist on a spectrum and work together in one way or another. The internet still serves as the basis for everything we do, Web2 technologies will continue to be the dominant online infrastructure for the foreseeable future, and the need to transact fiat currency is unlikely to ever go away.
The Importance of Human Administrators
Humans will always be involved in blockchain technology, at least to some degree. Indeed, if done right, we should be able to create trustless systems that require minimal human input. However, these systems will only be as good as the underlying code itself. In a similar vein, humans still need to be able to intervene when things go wrong.
The Concept of Trust
Maximalists often confuse the concept of trust with decentralization. Decentralization is about spreading power and control across a network, whereas trust refers to the confidence in the integrity and security of that network.
The Myth of Decentralization
Blockchain technology often relies on the systems it’s designed to replace, which is more akin to shifting the work elsewhere, not actually decentralizing the processes, rules, and access underlying the system. At a practical level, many people don’t even know their wallet holds the cryptographic key to access their tokens rather than the tokens themselves.
Conclusion
The Web3 industry should focus on establishing a durable, flexible, wide-ranging ecosystem, not overly relying on one blockchain or another at the expense of the wider industry. This requires a more nuanced approach to decentralization and a willingness to experiment with new technologies and methodologies.
By adopting this mindset, we can create a more resilient and adaptable Web3 ecosystem that benefits all stakeholders involved.
About the Author
Jordan Yallen is the CEO of MetaTope, a 3D-focused Web3 tech company. He attended Loyola Law School and became a licensed California attorney. This article is for general information purposes only and should not be taken as legal or investment advice.
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