4 ms·

Bubble concerns worth listening to on crypto usually talk about the price getting to far ahead of the tech, network congestion, tx volume, scaling solutions, ha

Bubble concerns worth listening to on crypto usually talk about the price getting to far ahead of the tech, network congestion, tx volume, scaling solutions, hard and soft forks, governance challenges, and regulatory uncertainty. Bubble concerns not worth listening to talk about lack of transparency, the fact that not backed by anything, hacks, and of course tulips. Since I can't view the WSJ Economist Survey crosstabs and filter on valid opinion vs hot take, I feel safe ignoring this result. While they're probably right, they're also probably right for the wrong reasons.

craigc 9y ago
I agree. As soon as anyone starts comparing crypto currencies and Bitcoin to tulips I tune out. It is a sign that they clearly do not understand what they are talking about.
- VectorLock 9y ago
  Totally right. Tulips were a tangible asset with intrinsic value.
  - craigc 9y ago
    - Tulip mania was concentrated to specific parts of Europe vs. a global market. - Tulip bulbs are perishable items that you have to repurchase when they go bad so they cannot store value. - Tulip bulbs have an infinite supply since you can always grow more, Bitcoin has a maximum supply of 21 million and there will never be another. - Anyone can plant seeds to grow a tulip bulb whereas mining a bitcoin has real costs associated with it ($800 to $2,000). - Tulip bulbs cannot cure poverty and starvation in the world. Bitcoin has already been very useful in countries like Venezuela where inflation of their own currency is causing poverty. See https://mobile.nytimes.com/aponline/2017/12/13/world/americas/ap-lt-venezuela-bitcoin-boom.html https://mobile.nytimes.com/aponline/2017/12/13/world/america... Also tulip mania itself is a poor comparison since it has spread like a game of telephone over the years. None of us were alive in the 1600s, and the actual events that unfolded were probably much less grand than the media plays it out to be: https://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/ https://www.smithsonianmag.com/history/there-never-was-real-...
  - ionwake 9y ago
    You gave a good laugh thanks
- eloff 9y ago
  Because bitcoin and tulips have nothing in common? Bitcoin is a commodity, tulips are a commodity. Tulips went through a particular phase of hype with a famous bubble (and crash). It's not irrational to look at bitcoin through that lens. Bitcoin might be new tech, but commodity markets and the human psychology and greed that drive them are old as dirt. Those who ignore history are doomed to repeat it.
  - luis_espinoza 9y ago
    In my understanding, bitcoin and its supporting technology is a monetary system. So, in my opinion, comparing bitcoins with tulips will be similar to comparing Fractional Reserve Banking with tulips.
    - riffraff 9y ago
      but is bitcoin really a monetary system if it's not being used as a currency, but as a commodity? The increase in dollar value of a bitcoin does not bear any resemblance with an increase in use of bitcoin as a currency. If anything, there seem to be less hype about using BTC to pay for things these days than a few years back.
    - eloff 9y ago
      In analyzing this, it doesn't matter what something purports to be, it matters what it is actually used as. By and large bitcoin is a digital commodity, not a currency. That may well change in the future, but that's not relevant to the analysis.

craigc 9y ago

I agree. As soon as anyone starts comparing crypto currencies and Bitcoin to tulips I tune out. It is a sign that they clearly do not understand what they are talking about.

VectorLock 9y ago
Totally right. Tulips were a tangible asset with intrinsic value.
- craigc 9y ago
  - Tulip mania was concentrated to specific parts of Europe vs. a global market. - Tulip bulbs are perishable items that you have to repurchase when they go bad so they cannot store value. - Tulip bulbs have an infinite supply since you can always grow more, Bitcoin has a maximum supply of 21 million and there will never be another. - Anyone can plant seeds to grow a tulip bulb whereas mining a bitcoin has real costs associated with it ($800 to $2,000). - Tulip bulbs cannot cure poverty and starvation in the world. Bitcoin has already been very useful in countries like Venezuela where inflation of their own currency is causing poverty. See https://mobile.nytimes.com/aponline/2017/12/13/world/americas/ap-lt-venezuela-bitcoin-boom.html https://mobile.nytimes.com/aponline/2017/12/13/world/america... Also tulip mania itself is a poor comparison since it has spread like a game of telephone over the years. None of us were alive in the 1600s, and the actual events that unfolded were probably much less grand than the media plays it out to be: https://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/ https://www.smithsonianmag.com/history/there-never-was-real-...
- ionwake 9y ago
  You gave a good laugh thanks
eloff 9y ago
Because bitcoin and tulips have nothing in common? Bitcoin is a commodity, tulips are a commodity. Tulips went through a particular phase of hype with a famous bubble (and crash). It's not irrational to look at bitcoin through that lens. Bitcoin might be new tech, but commodity markets and the human psychology and greed that drive them are old as dirt. Those who ignore history are doomed to repeat it.
- luis_espinoza 9y ago
  In my understanding, bitcoin and its supporting technology is a monetary system. So, in my opinion, comparing bitcoins with tulips will be similar to comparing Fractional Reserve Banking with tulips.
  - riffraff 9y ago
    but is bitcoin really a monetary system if it's not being used as a currency, but as a commodity? The increase in dollar value of a bitcoin does not bear any resemblance with an increase in use of bitcoin as a currency. If anything, there seem to be less hype about using BTC to pay for things these days than a few years back.
  - eloff 9y ago
    In analyzing this, it doesn't matter what something purports to be, it matters what it is actually used as. By and large bitcoin is a digital commodity, not a currency. That may well change in the future, but that's not relevant to the analysis.