Do you still compare Bitcoin to the tulip bubble? Stop!

To compare Bitcoin (BTC) to the Dutch bubble of tulip bulbs is to perpetuate a fallacy. Technology is changing faster than nature, and decentralized networks have more financial utility than a bunch. Bitcoin is technology, tulips are plants, and no savvy person would take the comparison much further.

Tulipmania, a 17th-century stock market bubble in which the price of the flower bulb rose due to speculation from Dutch investors, resulted in a major crash. Prices were six times the average annual income at the time. The rarest light bulbs have become some of the most expensive items on the planet.

Even though the Bitcoin network has been operating since 2009, its comparison with the tulip bubble continues to satiety. Last February, the British economist and member of the board of the European Central Bank Gabriel Makhlouf, speaking of Bitcoin, simply reminded us: “Three hundred years ago, people put money in tulips because they thought it was an investment.

Related: Predicting the Price of Bitcoin Using Quantitative Models, Part 4

Tulipmania

Time and time again, Bitcoin opponents use Tulipmania to justify their myopic expectations. Tulipomania stories were popularized by Scottish journalist Charles Mackay in his 1841 book Memories of extraordinary popular delusions and the madness of crowds. As Mackay wrote: “A golden bait hung temptingly in front of the people, and one after another they rushed towards the tulip-marts, like flies around a pot of honey. . He continues: “Nobles, bourgeois, farmers, mechanics, sailors, footmen, maids, even chimney sweeps and old seamstresses, dabbled in the tulips. However, when the tulip bubble burst in 1637, Mackay claims that havoc was wreaked on the Dutch economy.

While the absurdity of the situation makes a good story, the researchers noted that Mackay’s tulip mania account may not even be true. This version of events, in particular, is not supported by historians. Anne Goldgar, professor of modern history at King’s College London and author of Tulipmania: money, honor and knowledge in the Dutch Golden Age, explains why Mackay’s version does not match.

“It’s a great story and the reason it’s a great story is that it makes people stupid,” says Goldgar, who laments that even a serious economist like John Kenneth Galbraith has repeated the story of Mackay in A brief history of financial euphoria. He keeps on:

“But the idea that tulipomania caused a big depression is completely wrong. As far as I know, it has had no real effect on the economy.”

The dot-com bubble

In addition to Dutch tulipomania, blockchain technology bull markets are sometimes seen as a dot-com bubble. It’s a better comparison, albeit inaccurate. In all of its forms, including crypto, DeFi, or non-fungible token, the Internet of Money has yet to hit a bubble phase or demonstrate all of its use cases. We are in the mid-90s, the equivalent of the dot-com era, and far from the bubble stage.

Related: Is Crypto Approaching Its ‘Netscape Moment’?

Additionally, the impact of the dot-com bubble on humanity was far less than the impact of the internet, a pattern that the blockchain will most likely follow, especially compared to tulip bulbs. Past crypto bull markets have had far bigger implications than price gains. In 2013, the world recognized that Bitcoin exists. In 2017 and 2018, they recognized that crypto exists. Given that too many of 2017’s projects turned out to be nothing more than a hamburger – it seems many projects were there just to raise money – this period is nothing more than a glimpse of this. that will happen.

No match with the tulip mania

The recent 2020-2021 bull market, the first after the initial coin offering (ICO) mania, has never been the big bull market so many have been waiting for. On the contrary, like 2017-2018, it was another showcase of what the future could be, putting blockchain even more in the spotlight.

During the next bull market, which will likely take place in a few years, major institutions will integrate DeFi and crypto. This process has already started. Meanwhile, FAANG employees (Facebook, Amazon, Apple, Netflix, Google) see the writing on the wall and quit en masse, seeking to build the crypto landscape with intuitive products. Anyone in finance should explore DeFi and think, “I’m going to lose my job if I’m not careful.” The Winklevosses once said that each FAANG company would have its own crypto project, a process known as hyperbitcoinization.

This exodus to DeFi suggests that blockchain is the future of fintech, not just a bubble. We are still so early. During the dot-com boom, tech people started leaving the companies they worked for and started to develop their ideas and question user experience (UX) and user interface (UI). of the time. Subsequent improvements and UX and UI design simplified the internet and ultimately brought it into every household. Brilliant blockchain programmers and developers are pushing the boundaries in many verticals. But too few push the boundaries of UX and UI. This is the next one.

Related: To accelerate the adoption of cryptocurrency, we must first improve the user experience

Because the UX and UI blockchain is not particularly user-friendly, the average institution will not yet be able to adopt and integrate the system into its pre-existing processes. Set off for greener blockchain pastures, talents from Silicon Valley and Wall Street will begin to push things forward. Leading funds and projects plan to improve blockchain UX and UI for the next storefront.

Once technologists realize that blockchain is the future, they will bring a unique skill set that will push the boundaries of the internet based on UX and UI cryptography. Like the dot-com era, technology will become easier to use and feature more regularly in everyday life.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research before making a decision.

The views, thoughts and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Jonathan libby is the CEO and Founder of Steady State. Between enjoying the memes and researching the global opportunities that crypto has to offer, Jonathan is actively building a new standard for DeFi insurance. After spending most of his academic career at the University of Maine researching crypto hedging and yield farming, Jonathan has also spent time helping and educating the US Senate on crypto solutions and time alternatives. in time.

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