Comparing Bitcoin (BTC) to the Dutch tulip bubble continues the error. Technology is advancing faster than nature, and decentralized networks have more economic benefits than a bundle. Bitcoin is a technology, tulips are plants, and no one special would go so far as to compare.
The Tulipmania bubble, a market bubble in the 17th century when flower bulb prices rose due to speculation from Dutch investors, led to a major crash. Prices were six times the average annual income at the time. The rarest light bulb has become one of the most expensive items on the planet.
Although the Bitcoin network has been in operation since 2009, the tulip bubble comparison continues to be nauseating. Last February, British economist and European Central Bank member Gabriel Mahloof, speaking of Bitcoin, said: “Three hundred years ago, people invested in tulips because they thought it was an investment.”
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Time and time again, Bitcoin peers use Tulipmania to meet their short-sighted expectations. Stories of tulip mania became popular with Scottish journalist Charles McKay in his 1841 book Memoirs of Uncommon Common Misconceptions and Mass Insanity. As McKay wrote: This flies around the jar of honey. “Nobles, townspeople, peasants, mechanics, sailors, pedestrians, maids, even chimney sweeps, and old women indulged in chrysanthemums,” he continued. However, when the tulip bubble burst in 1637, Mackay announced that the Dutch economy was imploding.
While the absurdity of the situation makes up a good story, the researchers noted that McKay’s retelling of tulip mania was not true. In particular, historians do not support this version of events. Anne Goldgar, Professor of Early Modern History at King’s College London and author of The Tulip Madness: Money, Honor, and Knowledge in the Netherlands’ Golden Age, explains why Mackay’s version is inappropriate.
“It’s a great story, and the reason people look stupid,” says Goldgar, lamenting that even a serious economist like John Kenneth Galbraith repeated Mackay’s story in his brief History of Financial Ecstasy. continue:
“But the idea that tulip mania caused severe depression is completely wrong. As far as I can tell, it has had no real impact on the economy at all.”
In addition to the Dutch tulip mania, blockchain beef markets are sometimes written off as the dot-com bubble. This is a better comparison, albeit inaccurate. In all its forms, including cryptocurrencies, DeFi, or non-fungal tokens, the Internet of Money has not yet entered the bubble and has demonstrated all the ways to use it. We’re in the mid-nineties, as in the dotcom era, and nowhere near the bubble stage.
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In addition, the impact of the dotcom bubble on humanity has been much less than that of the Internet – it is more likely to follow a blockchain pattern, especially when compared to tulips. Previous cryptocurrency beef markets were more important than price increases. In 2013, the world realized that Bitcoin exists. In 2017 and 2018, they admitted the existence of a cryptocurrency. With so many of 2017’s projects turning out to be nothing – hamburgers – a lot of the projects seem to have been just used to raise money – this period brought nothing more than a preview of what was about to happen.
Not suitable for tulip mania
The beef market 2020-2021 was not the last, and the first since the first coin offering (ICO), the great beef market many have been waiting for. Instead, like 2017-2018, it was another showcase of what the future could be, and it brought more attention to blockchain.
During the upcoming beef market, which is likely to appear in a couple of years, the leading institutions will include DeFi and cryptocurrency. This process has already begun. Meanwhile, FAANG employees (Facebook, Amazon, Apple, Netflix and Google) see the writing on the wall and end up gathering in droves and wanting to expand the crypto landscape with intuitive products. Every financial professional should study DeFi and think, “I’m going to lose my job if I’m not careful.” Winklewosses once mentioned that each FAANG will have its own crypto project, a process called hyperbitcoinization.
This migration to DeFi indicates that blockchain is the future of financial technology, not just a bubble. We are still very early. During the dotcom boom, tech experts started leaving the companies they worked for and started building their ideas and challenging the user experience (UX) and user interface (UI) of the time.