Comparing Bitcoin (BTC) to the Dutch tulip bubble perpetuates a mistake. 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 connoisseur can compare more deeply.
Tulipmania, a 17th century market bubble where the price of flower bulbs rose due to speculation from Dutch investors, caused a massive crash. The prices exceeded the average annual income at that time by six times. The rarest light bulb has become one of the most expensive items in the world.
Although the Bitcoin network has been active since 2009, its comparison with the tulip bubble continues until vomiting. Last February, UK economist and board member of the European Central Bank, Gabriel Makhlouf, sincerely reminded us when talking about Bitcoin: “Three hundred years ago people put money in tulips because they thought it was an investment.”
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Bitcoin opponents repeatedly use Tulipmania to justify their mythical expectations. Stories of tulip mania were made popular by Scottish journalist Charles Mackay in his 1841 book Memoirs of the ubiquitous extraordinary delusions and mob madness. As Mackay wrote: “A golden bait hangs seductively in front of everyone, and one by one rushes into the tulip gardens like flies around a honeypot.” Chimney sweeps and women in old clothes carrying tulips. ” However, when the tulip bubble burst in 1637, Mackay announced that the Dutch economy was devastated.
While the absurdity of the situation makes for a good story, scholars have stated that Mackay’s retelling of the tulip mania may not even be true. In particular, this version of events 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 Agewhich explains why Mackay’s version doesn’t add it.
“It’s a great story, and the reason it’s made people look stupid,” said Goldgar, who complained that even a serious economist like John Kenneth Galbraith compares Mackay’s report A brief history of financial euphoria. He continued:
“But the idea that tulip mania causes severe depression is completely wrong. As far as I can tell, it has no real impact on the economy. “
Dutch tulip mania aside, 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 cryptocurrencies, DeFi, or useless tokens, the internet of money has yet to enter the bubble phase or prove all of its use cases. We’re in the mid-nineties, the equivalent of the dot-com era, and nowhere near the bubble stage.
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In addition, the impact of the dot-com bubble on humanity is far less than that of the internet, a model that the blockchain will most likely follow – especially when compared to tulip bulbs. Past crypto bull markets are far more significant than bulls. In 2013, the world recognized that Bitcoin existed. In 2017 and 2018 they realized that there are cryptocurrencies. Since all so many projects have become nothing burgers since 2017 – many seem just to be just raising money – this phase is nothing more than a preview of what’s to come.
Not to be compared with tulip mania
The most recent bull market 2020-2021, the first after the Initial Coin Offering (ICO) craze, was never 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. Meanwhile, FAANG employees (Facebook, Amazon, Apple, Netflix, Google) see the writing on the wall and quit in droves to build the crypto landscape with visual products. Anyone in finance should explore DeFi and think, “I’m going to lose my job if I’m not careful.” Winklevosses once stated that every FAANG company will have its own cryptocurrency project, a process known as hyperbitcoinization.
This exodus to DeFi suggests that blockchain is the future of fintech, and not just a bubble. We’re still so early. During the dotcom boom, technicians left the companies they worked for and began developing ideas and at that time challenging user experience (UX) and user interfaces (UI). Subsequent improvements and UX and UI design simplified the internet and eventually brought it to every home. Outstanding blockchain programmers and developers are pushing the envelope in so many industries. But too few people push the boundaries of UX and UI. That’s next.
Related: In order to accelerate the adoption of crypto, the first thing we need to do is improve the user experience
Since blockchain UX and UI are not particularly user-friendly, average companies cannot adopt the system and integrate it into their existing processes. After hitting the greener pastures of blockchain, 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.
Jonathan Libby is CEO and Founder of Steady State. Between enjoying the memes and exploring the global opportunities that cryptocurrencies offer, Jonathan is actively building a new standard for DeFi coverage. After spending most of his college career at the University of Maine researching cryptocurrency coverage and agriculture, Jonathan has also spent time assisting and educating the U.S. Senate about cryptocurrency and alternatives over time .