Tulip Mania Economics Do Not Apply to Bitcoin.

Tulip Mania Economics Outdated | New Resilient Bitcoin Unaffected

Tulip Mania Economics Outdated | New Resilient Bitcoin Unaffected

Tulip Economics Do Not Apply to Bitcoin.
Tulip Economics Do Not Apply to Bitcoin.

The Tulip Mania Hype

If you pay attention to the mainstream media, you have likely heard the term Tulip Mania in close connection with our beloved, bullish Bitcoin. The crypto community is abuzz with this goofy name, and it sounds almost as alarming as the formidable swine flu or worse yet the mad cow disease. The phrase Tulip Mania is far more alarming than the circumstance it describes. Tulips will not cause epidemic illness nor will a tulip’s beholder drift into a state of mental disarray, as the silly expression implies.

Tulip Mania describes an economic phenomenon with embarrassing social implications. The mania of the French-fashion-flower is usually mentioned in conjunction with widespread consumerism related to extreme price spikes and sudden, sharp declines. It is a fancy way to say “You might lose your ass. You might embarrass yourself.”

The Back Story Of Tulip-Fever

The origin of Tulip Mania points to a period between 1619 and 1637 where the unlikely “market” for tulips experienced such disproportionate heights that some desperate Dutch residents allegedly gave their estates in trade for a rare and highly desireable tulip bulb named “Viceroy”. One Viceroy was advertised in 1637 for ten times the average yearly wages. 1637 was also the year of the tulip’s sudden decline, which legend would have us believe, caused the financial ruin of many bulb-hype participants. The various historical accounts of this hyperinflated flower fiasco have been contested thousands of times in the centuries that followed this Dutch Golden Age.  The Smithsonian says the floral hype was mostly a myth.

What Is The Relation Between Tulips and Bitcoin?

The exaggeration of events surrounding the meltdown of the tulip party has an underlying effect that brings the most delicate part of a human psyche out into the spotlight. Do you recall having a dream as a young child where you would suddenly realize you had forgotten your pants?  Usually, this brand of nightmare comes with an unreasonable obstacle or two that somehow prevents your pantsless bottom from safely taking cover.  You try running away but your legs are made of the heaviest iron, and you can hardly move at a sloths pace.  Sometimes you find shelter behind a tiny chair (or similarly useless object in a pants emergency). The point is we have all experienced some level of disgrace, even if only in a bad passing dream.

Media Influences Exploit Our Secret Fear Of Making Mistakes

What happens to a human when reminded of an embarrassing moment? A discomfort rises warmly from the heart up to the neck and heats up even the coolest of cheeks, turning aloof faces into a telling shade of pink. This is a vulnerable state of being and it makes for an easy, moldable society if applied correctly. Exploitation is a nasty subject though.

Why You Should Enjoy Saying “Tulip Mania Does Not Apply To Bitcoin.”

Tulip mania applies when society is without choices regarding their finances. People have been led astray by unreasonable, strategic price swings.  Bitcoin is an alternative form of currency.  Using a peer to peer network without a central authority, bitcoin users are in control.   We make the price and the dips. It is not manipulation it is merely the way peer-to-peer, decentralized payment networks operate.  Each user is immediately creating value by using the coin.  Of course, there will be new economic shifts and driving patterns being studied, and they are nothing like the days when Tulip Mania filled the people with unreasonable desires to spend frivolously.

What Is The Difference Between Banks and Bitcoin? 

  • A central authority does not govern Bitcoin. Let one man try to crumble it and he will be alone. With his crumbs.
  • Bitcoin hath no ruler, no kingdom, and no slaves!  Yes, I did use the word ‘hath’.  Preserving SOMETHING from the past is the goal since we are demolishing the inefficient record keeping of the past and replacing it with public, immutable ledgers called blockchain. Let us keep the word hath
  • With Bitcoin, you will never have edited history because it is impossible to alter a confirmed block of data. Nobody can be sneaky, so nobody feels cheated.
  • All user payments are sent out from user command. Utilities, credit cards, the IRS, Law Enforcement are can waltz into your wallet and remove a payment.  Bitcoin can be sent to a chosen wallet and only the wallet owner can send out. Banks are different.  The bank decides when your paycheck is safe to allow withdrawals when to clear a deposit, and what to do with your funds when an overdraw request is made. Traditional banking permits service providers to remove money for payments in ACH transfers.
  • Fiat is always at risk of being lost by a cloaked entity who has the ability to deny or grant your withdrawals using hidden information kept out of the eyes of the consumer.
  • Bitcoin can be hacked if the user does not secure their wallet correctly.  Once bitcoin gets sent out it is permanent.  Protect your information and passwords.  Never give out a private key.

Confused?

Baffled by cryptocurrency, a frenzy has begun. Hundreds of headlines induce meaningless panic in readers with emotionally charged keywords such as mania, and bubble.  In fair recognition of what motivates sensationalist, verbiage watch carefully for visual clues. Urgent messages on the news are coming from people who think that the sudden uprising of bitcoin price means certain and imminent doom.

Bubbles Are Relevant To Past Financial Institutions

The exponentially rising bitcoin price is not in a bubble unless by bubble you mean giant, fluffy cloud of wonder.  A bubble is temporary and guaranteed to burst, vanishing in an instant. If the Federal Reserve had created Bitcoin, perhaps, then, it would be a valid fear because the central hand of big brother is always a touch away from hitting the big red button that grants or denies us access to”our” money.

In a recent conversation with John McAfee, he enlightened me on the subject with simple and profound words.

“Bitcoin and Cryptocurrencies do not obey the laws of existing investments. Things like bubbles- there can’t possibly be a bitcoin bubble. Things like corrections, what the fuck does that mean?”  John McAfee as heard on the audio recording of our phone conversation from 12/5/2017

No Tulip

A few days after the call McAfee Posted his thoughts on ‘bubbles

Within my very own work group, we have varying opinions on the bubble concept.  To read Francisco Memorias perspective on this topic visit this article:  https://cryptocoremedia.com/bitcoin-bubble-talk/