When those crypto projects collapsed a few weeks later, causing a crash that has wiped out about $1 trillion in value, Klippsten became a fixture on news shows, where he cast the industry as a morass of hucksters and hypocrites. “Crypto is a scam,” he declared last month.In the crypto world, Klippsten is known as a bitcoin maximalist, or “maxi” — a hard-core evangelist who believes bitcoin will transform the financial system even as fraud pervades the rest of the crypto ecosystem.
The debate being fueled by the maxis has become a battle for crypto’s future. The crash demonstrates how closely the industry resembles the worst of the traditional finance system — an interconnected web of risky ventures and casino-like trading practices. The maxis say they are trying to steer crypto back to some of its original ideals at a pivotal moment, as new regulatory scrutiny and mounting consumer distrust pose an existential threat to the industry.
Many subsequent cryptocurrencies have lacked those features. Often, new coins are issued by a group of founders who exert significant control over distribution — a dynamic that can replicate the centralized structure of traditional finance. Hardly anyone uses bitcoin to conduct ordinary transactions. Last year, El Salvador introduced bitcoin as its national currency, but that project has been a stunning failure. Verifying bitcoin transactions — a process known as “mining” because it rewards participants with digital coins — is energy-intensive: Researchers estimate that bitcoin mining may produce as much as 65 megatons of carbon dioxide per year, comparable to the annual emissions of Greece.
“If you call out someone’s risks they’re taking, and they’re otherwise healthy, you can be accused of creating a run on the bank or being a troll,” said Michael Saylor, CEO of MicroStrategy, a software company that has built up a large bitcoin reserve. “It’s kind of hard to explain this theoretically before the crash happens. But now it’s happened.”
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