As future generations learn of the early past of Bitcoin, do they point to it as an alternative to the Tulipmania bubble of the 15th century? The comparisons we speak about between the Dutch Tulip Craze and Bitcoin are quite interesting. Although we believe that it is too early to determine how the Bitcoin story works out, looking into the past is always a great way to evaluate the future.
How Tulipmania Began
These days, tulips are only devoted to gardeners or florists but go back to Europe around 400 years ago and they were as popular, if not more so than the latest iPhone.
Their success as a status symbol, available primarily in the Netherlands of today, quickly became an early form of the future market. Tulip contracts were sold back and forth much as today’s forex, oil or gold: the contracts were exchanged depending on the anticipated prices.
The word quickly spread from this new phenomenon and soon reports of the vast wealth of people were heard overnight, simply by buying tulip contracts. Not only the rich but everyday people started to sell their possessions and even land to join the tulip craze, as the prices continued to rise. The euphoria was indeed in the air as investors from tulip pictured a future in which everyone with a small portion of tulips might liberate themselves from misery. Unfortunately, this euphoria marked the market’s peak. Investors noticed that almost as soon as tulip prices rose, they were unable to sell their contracts or bulbs; costs were simply pushed up too high. The price of tulips fell sharply over a matter of weeks, leaving many a buyer with an empty pocket.
What are we able to learn from Tulipmania?
There are many similarities between the tale of tulip and what we see with Bitcoin. First, like tulips, Bitcoin has a limited supply that can be “harved.” Second, tulips were a complete phenomenon in 15th century Europe, as is the case with Bitcoin, a cryptocurrency which is currently special to us. Finally, Bitcoin has a value that can be traded for goods or services or tulip contracts.
A Big Difference Now And Then
There is, though, one important difference. While tulip connections ended in a cloud, it was still possible to swap the contract value for tulips, in fact, there was something tangible to help the touch. Nevertheless, there is nothing in the case of Bitcoin which physically supports this cryptocurrency.
Bitcoin is a case in point of basic supply and demand. It is rapidly increasing in 2017 and can only be attributed to speculation because behind Bitcoin there is nothing real. The notion of a cryptocurrency is very fascinating, and this kind of money seems to remain here for a variety of reasons. It would be very fascinating would be if there were a form of Bitcoin with more protection and confidence. It would certainly make for a certain investment at least rather than a solely faith-based investment.