Comparing Bitcoin to the Dutch Tulip Bubble is a Fallacy
Cryptocurrency is still in its infancy, but with NFT and DeFi, blockchain is clearly the future of fintech, not just a bubble.
Comparing Bitcoin to the Dutch tulip bubble is a fallacy. Technology evolves faster than nature, and decentralized networks have more financial benefits than a bouquet of flowers. Bitcoin is a technology, tulips are plants, and no smart man compares the two.
Although the Bitcoin network has been active since 2009, there are still many who compare it to a tulip bubble. Last February, British economist and board member of the European Central Bank, Gabriel Makhlouf, sincerely reminded us about Bitcoin: “Three hundred years ago people put money in their pockets thinking it was an investment.”
Bitcoin opponents have repeatedly used the tulip syndrome (tulipmania) to justify their mythical expectations. Stories about the tulip syndrome were introduced in 1841 by the Scottish journalist Charles Mackay in a book called “Memoirs of Famous Illusions and Crowd Madness”.
“A tempting golden bait hangs in front of everyone, and one after the other rushes into the tulip gardens like flies around a honey pot. Nobles, citizens, farmers, mechanics, servants, maids, even chimney sweeps are all involved in the tulip syndrome. ”When the tulip bubble burst in 1637, Mackay claimed that it had devastated the Dutch economy.
While the absurdity of the situation makes for a compelling story, scholars have stated that Mackay’s account of the tulip mania may not even be accurate. In particular, this version is not supported by historians. Anne Goldgar, Professor of Early Modern History at King’s College London and author of Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age, explains why his version of Mackay is unreasonable.
“It’s a great story, the reason it’s a great story is because it makes people look stupid.”
“But the idea that tulip syndrome caused a great recession is completely wrong. As far as I can tell, it has no real economic impact. ”
Beyond the Dutch tulip syndrome, the bull market in blockchain technology is sometimes viewed as a dot-com-like bubble. This is a better comparison, if not accurate. In all of its forms including cryptocurrency, DeFi, NFT, the internet of money has yet to enter the bubble phase or manifest all of its use cases. We’re in the mid-nineties, the equivalent of the dot-com era, and far from the bubble.
In addition, the impact of the dot-com bubble on humanity is much less than the impact of the internet, a model that blockchain is more likely to follow – especially when compared to tulip bulbs. The past rallies in cryptocurrencies are far more significant. In 2013, the world recognized that Bitcoin existed. In 2017 and 2018 they realized that there are cryptocurrencies. With so many projects just seeming to be raising money in 2017, this phase was nothing more than a preview of what was to come.
Not suitable for tulip syndrome
The 2020-2021 bull market, the first since the ICO boom, is by no means the massive bull market that many have been waiting for. Instead, like 2017-2018, it was just another showcase of what could happen in the future and blockchain moved even more into the spotlight.
In the upcoming bull market, possibly a few years from now, leading institutions will combine DeFi and crypto. This process has started. In the meantime, FAANG employees (Facebook, Amazon, Apple, Netflix, Google) foresee bad things and are quitting their jobs in large numbers in order to build the crypto landscape with intuitive products. . Everyone in the financial industry should explore DeFi and think, “I’ll lose my job if I’m not careful”. Winklevosses once said that every FAANG company will have its own cryptocurrency project, a process known as hyper-bitcoinization (the tipping point where bitcoin becomes the world’s default system of values).
The introduction of DeFi shows that blockchain is the future of fintech, and not just a bubble. During the dot-com boom, technicians began to leave the companies they worked for and come up with ideas, demanding the User Experience (UX) and User Interface (UX) UI at that time. Later improvements and UX and UI design simplified the internet and eventually brought it to every household. Outstanding blockchain programmers and developers are testing the limits in so many industries. But too few people interfere with UX and UI. That’s the next one.
Since blockchain UX and UI are not particularly user-friendly, average companies cannot adopt the system and integrate it into their existing processes. After embracing the new possibilities of blockchain, the talent in Silicon Valley and Wall Street will begin to move things forward. Top funds and projects are considering improving the UX and UI of the blockchain for the upcoming rollout.
Once technologists realize that blockchain is the future, they will bring unique capabilities that push the boundaries of crypto-based internet UX and UI. As in the dot-com era, the technology will be easier to use and more common in everyday life.
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According to Cointelegraph