The WAX Advisory Council: Bringing together the greatest minds in tech, video gaming, and entertainment

WAX ON: How Many Altcoins Do We Need?

Aug 27, 2020
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Video Transcript:

Bitcoin maximalists annoy me. Why? Because they promote a fatally flawed argument that Bitcoin is the answer. The answer to what? Whatever you need to do, with a blockchain

1.Store of value? Our bread and butter.

2.Payments? We got you covered globally.

3.How about smart contracts? Have you seen our timelocks? Do you know what we can do with Schnorr signatures?

So here's the news flash:

You can't go to one place for all your needs.

Never been true in software, or anything else

But that doesn't stop people from thinking it so.

There was a time when big companies thought "IBM is all we'll ever need."

Which got replaced with "Microsoft is all we'll ever need."

Which got replaced with "Amazon is all we'll ever need."

If Bitcoin maximalists were to borrow an advertising slogan, they'd probably go with "Bitcoin: The ultimate blockchain machine" My apologies to BMW.

But...about those bitcoin value propositions?

1.Store of value? For now, ya. Bitcoin works pretty well. I would give it that one.

2.Payments? Please. Bitcoin is a total failure as a consumer mass market payment system. You want to do payments with an immutable, uncensorable crypto? (and there are a lot of good reasons why you would want to do that). Go with a stable coin like Tether. Why? Well how's the advertising slogan: "When it absolutely positively has to be there overnight." Cuz you know bitcoin is slow.

Sidenote. The bitcoin core developers didn't like mastercoin. They couldn't understand why anyone would want it. You know. Bitcoin solves all your problems. So what was the one successful application built on Mastercoin? Tether. We built Tether on Mastercoin because we couldn't deal with the drawbacks of BTC as a payment mechanism.

3.How about Smart contracts? Oh man. That one is pretty silly.

Yes you can write a script on bitcoin to define some conditions around a transaction, but it's clunky. And no one uses it.

To quote mean girls: "Stop trying to make fetch happen."

Smart contracts are a specialized capability, and need a dedicated focus.

Which is what the teams from EOS and Ethereum are doing. And doing a lot of good work in that area.

So why do bitcoin maximalists have this "the one coin to rule them all" philosophy?

Because they have a zero sum mentality.

They believe the tribes of ALL THOSE altcoins out there, would converge around bitcoin, if they JUST hadn't gotten distracted by these side projects.

It reminds me of the early days of the consumer internet.

There were a few hundred websites in 1993.

By 1995, there were over... 20,000

When my partners and I were raising our venture capital firm, idealab capital partners, the first dedicated consumer internet venture fund, one question we got a lot was "how can you dedicate a whole venture fund to consumer internet?" "There are already thousands of websites out there, why do we need more? We've got a travel site, a car selling site, an ecommerce site for toys, why do we need more of those?"

Well, because humans like novelty. So we invent new ways to do things.

And those NEW WAYS sometimes require entirely new approaches

Mail order catalogs were a popular thing at one time.

And then ecommerce happened. And consumers decided ecommerce was a better thing.

So how many altcoins do we need?

Well, there are what, 2 billion facebook pages in the world?

When WE start getting close to that number, we might have enough.

If you like what you heard today, please hit subscribe and I'll see you soon

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