Why can’t Solana be more like Bitcoin?

Bitcoin maxis are not very nice people. The Maxis – short for Maximalists – have no use for non-Bitcoin blockchains and are often rude, intolerant and paranoid. But say what you will about maxis, they care deeply about Bitcoin and will do anything to protect it. If only other blockchain communities were a little more like them.

Solana, in particular, could learn a thing or two from maxis. Since exploding onto the crypto scene in 2020, Solana is considered by many to be the third most important blockchain thanks to its top ten market cap and vibrant community of developers and entrepreneurs. But what Solana is not known for is security or reliability – two things Bitcoin has in spades.

This week, Solana was in the news for a hack that drained money from more than 8,000 token holders, which appears to have been caused by a wallet called Slope that stored users’ private keys in plain text on a centralized server, and whose code is not open source. The Slope hack comes just months after another catastrophic attack in which hackers stole $320 million from a so-called bridge that allows users to interact with the Ethereum blockchain.

Solana defenders are quick to point out that the fault for the hacks lies with external applications and not the blockchain’s core protocol. This is correct, but also begs the question of why the Solana ecosystem is so vulnerable to such large-scale attacks in the first place. Can’t society do more to ensure that Solana’s infrastructure is not full of vulnerabilities? Can’t they improve how the protocol interacts with third parties, or do more to promote bug bounties and other security measures?

The cause of Solana’s problems may lie in the culture. I recently asked Twitter how the Solana community differs from Bitcoin and Ethereum, and the most common response was that Solana is heavily influenced by venture capitalists. If this is true, it helps explain why Solana became a major crypto player so quickly and has attracted so much buzz. This is not a bad thing – hype and growth are essential to any successful crypto project. But the venture capital influence may also explain some of Solana’s shortcomings, particularly its neglect of security and push for growth at all costs.

Solana also works differently than Blockchain and Ethereum in terms of maintaining its core protocol. The communities surrounding the latter blockchains are hyper-aware of every upgrade and potential weakness in the chain’s code. The Solana crowd, on the other hand, is buzzing about a new store in a posh New York City mall, but less concerned with its core business. This may be the reason why Solana has been burdened by a number of crashes and outages in recent months.

All this does not mean that Solana is a bad project. On the contrary, Solana’s speed and community focus on building popular, easy-to-use products make it one of the best blockchains to come along in years. But if Solana doesn’t start paying attention to basics, especially security, it could run into serious trouble. Bitcoin maxis may be obnoxious, but there is no doubt that their blockchain will be here in a decade. The same cannot be said of Solana.

Jeff John Roberts
[email protected]
@jeffjohnroberts

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THE MOONSHOT CHILDREN

“As far as lunatics go, Saylor is ‘Elon Junior’ without the business acumen.” That’s a juicy quote from a new profile of MicroStrategy CEO Michael Saylor—known for his bold Bitcoin purchases—written by Fortune legend Shawn Tully.

Tully argues that Saylor, who seems to live for the thrill of his business and personal life, may finally be on top of the Bitcoin game. The problem is that the CEO has taken out massive loans against MicroStrategy’s consulting income, and his creditors will come after him if Bitcoin’s price doesn’t improve.

Saylor may be on thin ice, but over the course of his three-decade career, he has also proven to be an early visionary when it comes to new technologies such as web, mobile and cloud. Could he escape his current predicament?

The downside is that Saylor has spent $4 billion to accumulate 129,699 Bitcoin at an average price of around $31,320. But today, with Bitcoin selling for roughly $23,300 or 26% less, his holdings are worth $3 billion, or $1 billion less than he paid.

FINANCIAL STATEMENT

Is SBF the next Warren Buffett? (Exclusive Fortune Cover Story) by Jeff John Roberts

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(Some of these stories require a subscription to access. Thank you for supporting our journalism.)

IF YOU DON’T KNOW, CRYPTO

I heard the term first “Bitcoin Maximalist” around early 2018 during the last crypto winter. The term was often invoked by the so-called “maxis” as a term of pride by those who believed that Bitcoin would be the only blockchain that retained its value. Today, the terms are more often thrown around as an insult by those fed up with Bitcoin hardliners. But it is also becoming less common – probably because some maxis are making peace with the existence of other chains.