On Tulips and Bitcoin...

[TKeenan]

   I get baffled when I see comparisons between bitcoin and tulips.  http://bloom.bg/1aRsHRO.  This one in particular is shockingly irresponsible journalism.  They merely show that since the price went up with tulips, and the price went up with bitcoin, bitcoin must be a scam/bubble.  How is it that our world became full of sensationalist journalists with no capacity whatever to perform fair analysis?  What are they teaching in journalism school these days?

On Tulips and Bitcoin
   If a tulip were to have remarkable functionality, it might then be fair to compare them to bitcoin.  I assert that bitcoin has remarkable functionality - coming soon.  Imagine a tulip which could rise from the ground on its own accord and destroy an approaching M1 tank.  That would be a tulip with some really interesting function.  But tulips don't do this in reality.  Tulips simply spring up from the ground in March and make a pretty flower.  During their spectacular price rise, it was never sold on the people that the tulips would soon be destroying tanks - or anything other than simple blooming.
   The reason people buy bitcoin - is because of the functionality to come soon.  Most bitcoin adherents don't care about the instantaneous price - which admittedly does include a considerable amount of speculation.  Nevertheless, the real value of a bitcoin investment lies in the wonderful function which is being developed.  
   I wish bitcoin were priced at only $30 today.  Journalists would then stop writing about the dumbest aspect of bitcoin - the wild price variations - and being to write about how bitcoin will shake up the world of financial transactions on so many levels.
  
   That is not the world we live in.  Journalists aren't interested in such matters - and those matters are just too hard for journalists and their readers to understand.  So, they write about wild price speculation instead.  Boring.  The uninformed reporting to the uneducated.  As soon as one clever journalist with a bit of intelligence decides to study bitcoin more closely for its coming functionalies rather than look at silly price chart comparisons, we will have a decent story to read.  But until then, I expect endless comparisons to tulips.  What a shame journalism is at an all-time low.  The good news is, it has little or no effect on those who are building the bitcoin infrastructure.  Carry on guys.  

[franky1]

bitcoin VS tulips is like comparing

coal VS solar.

one is limited the other has no limit

[beetcoin]

i see a lot of posts about tulips.. it may need its own subforum.

[bluemeanie1]

Bitcoin and Tulips(at least during the Dutch Tulip Bubble) were similar:

 1) universally valued

 2) widely accepted

 3) easy to move

 4) limited supply(or at least the semblance of such)

 5) a class of people boosting the value of the item because they were invested in it's production(tulip farmers/miners).

-bm

[ArticMine]

We really need some horticultural product suppliers especially those who specialize in premium and rare tulip bulbs to accept Bitcoin for payment.

[lightpower]

I have heard a lot of such stories.
Tulips are only most famous of them.

It seams that world has long history of trying to grasp what currency actually is.
Sometimes this need for understanding may be used by some people that want to earn on this.

Just like with religion - there are some that can last for thousends of years and some that will die in few years after sucking all money from their believers.

IMO money is just a way of exchanging energy.
If I work, and my work is needed in society then this generates a lot of energy (money) that society ows me.
So this energy is materialised in form of value. Now I can exchange this energy for other society members services. If my service is very needed and rare - I will get a lot of energy to exchange for less rare services.

Now how to store this energy is biggest problem - we must aggree on something like gold or printed money as proof of work. If society can accept flowers - ok. But due to it's limitations society will resign from this idea and will try to find other way.

We are in time of experymenting with bitcoin - if society will accept it - it will stay - if not - it will die.

[Meuh6879]

   That is not the world we live in.  Journalists aren't interested in such matters - and those matters are just too hard for journalists and their readers to understand.  

It's true ... when i start to talk about bitcoin, i prefer to talk about the transfer method (smartphone/bitcoin-QR) ... and not the price.
Bitcoin is the first system to pay with QR-Code certified by more than 1 millions of PC around the world.  even in "blocus" part of the world   

[Borbolon]

   If a tulip were to have remarkable functionality

And doesn't it? A tulip could serve several remarkable functions..

[slowlyslowly]

 
The poster makes some good points about the way many articles poorly compare tulips and bitcoin. But the core point is that the longer term price imho should and will be around  $30-$100 as it has this level of transactional value with a wee bit of stored value. Its stored value is very low and is not the $500-$1250 it has been speculated to in recent months. So just like the tulip a bubble bursting point will be reached and shortly afterwards a price of $30-$100 will be established that will have some longevity.

Rather than the tulip comparison I liken some of the hype around bitcoin to the one person self balancing electric people movers that come out a few years ago. Unlike the tulip that was pretty but was never going to 'do' anything else these movers were hyped to change transportation fundamentally . Just like bitcoin sometimes gets hyped up that it will change transactions fundamentally. Both will exist and be players in their sectors but will only ever be one part.  Bitcoin will not for example destroy visa or mastercard who make most of their money not from the transactional part but from being short term borrowers charging high interest.

 

[Lethn]

The problem with people who compare Bitcoin to tulips is they don't realise that the limit is hard coded and think because it's digital it can be messed with easily, that just simply isn't the case with Bitcoin.

[cbeast]

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.

[lightpower]

Let's say You have 4 units of very desirable thing.
This thing can be divided to very small peaces.

Is it more profitable to sell this four units for few milions of dolars, or sell only two and allow market to work - people will start to buy and share  and unit price will go high up.

You still own two full units while others are killing themself for even 0.0001 of it
And then You sell....

[thaaanos]

Tulips as any other flower has the remarkable function of beeing a token of love and friendship and trust, and create smiles and happiness,
also they are efemeral so in order to maintain the Love friendship and Trust one has to constantly provide new tulips, thankfully the difficulty of raising a tulip stays constant, and lo has the magical property of reducing CO2.
Bitcoin on the other... Oh never mind...

[vadoff]

If Tulips were found to be a new renewable source of energy that revolutionized the energy sector, then yes it would be a decent comparison lol.

[dynodog]

i think that we hear that bitcoins are like tulips because people believe that bitcoin will play out like the tulip bubble, which saw a meteoric rise in price only to come crashing down.  Most on here contrast the functionality of the two but that is not the basis for the analogy.  My problem with comparing bitcoin to the tulip bubble is that they are very different in terms of "bubbles".  If you go to wikipedia, the tulip bubble involved a situation where EVERYONE and their brother were buying tulips, and even borrowing money to buy more.  That bubble sounds very similar to the dot.com bubble and the real estate bubble.  My recollection of those two bubbles was that everyone was trying to participate.  When the person cutting your hair and driving a cab has a stock pick for you that indicates a bubble.  I recall many people buying and trying to flip real estate after making improvements from 2000 through 2008, and many many people believed that real estate could never go down in value.  Contrast the situation with bitcoin:  most people don't even know what it is.  If I hadn't gone to a bitcoin meet up, i would literally know of NO ONE personally who owns one.  This is hardly bubble territory for bitcoin - more like the very very early part of a huge bull run.  FInally, bubbles are usually spotted after the fact, not while they are taking place.  Greenspan, for example, had no idea there was a bubble in tech stocks or in real estate and even said so.  Ironically, after his horrible predictions, he has the gall to say that bitcoin is in a bubble.  My experience, unfortunately, is that people over 60 have a very hard time understanding bitcoin, and they usually are the ones calling it a ponzi scheme, bubble etc.  (Gary North is another example).

[Bitcoinpro]

Bitcoin and Tulips(at least during the Dutch Tulip Bubble) were similar:

 1) universally valued

 2) widely accepted

 3) easy to move

 4) limited supply(or at least the semblance of such)

 5) a class of people boosting the value of the item because they were invested in it's production(tulip farmers/miners).

-bm

you forgot to add they both need daily watering and sunshine

[Bitcoinpro]

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.

 

i know what it is, you can't see the bitcoins beyond the tulips

[Peter R]

I get the impression that the journalists writing for the MSM believe the Dutch people would pay for their pub tabs with tulip bulbs and give their kids an allowance in tulip bulbs.  But really, during the 6-month-long "tulip mania" of 1636-37, very few tulip bulbs changed hands.  People were trading futures contracts for the delivery of tulip bulbs that would be dug from the earth the following autumn.  

A couple of interesting notes:

- Short-selling of tulip futures contracts was band some 10-20 years earlier.  This limited the ability of cool-headed speculators to profit from what they saw as a mania.

- In the midst of the bubble, the tulip futures contract law was changed.  Originally, people selling futures contacts for tulips were legally obligated to deliver bulbs at that contracted date.  After the law change, it was possible to settle in cash in lieu of bulbs, at the current market rate.  


I see the tulip mania more as another example of the collateral damage caused by "helpful regulation":  First the laws restrict short-selling to keep the prices high, and then the laws change to allow cash settlement to prick the bubble.  

 

[nodroids]

Wow, glad to see SOO many people still not getting what Bitcoin is, like at all. I still have money to deploy, maybe I will still see sub $700 again in the next month or two. That would be sweet!!

[jubalix]

The poster makes some good points about the way many articles poorly compare tulips and bitcoin. But the core point is that the longer term price imho should and will be around  $30-$100 as it has this level of transactional value with a wee bit of stored value. Its stored value is very low and is not the $500-$1250 it has been speculated to in recent months. So just like the tulip a bubble bursting point will be reached and shortly afterwards a price of $30-$100 will be established that will have some longevity.

Rather than the tulip comparison I liken some of the hype around bitcoin to the one person self balancing electric people movers that come out a few years ago. Unlike the tulip that was pretty but was never going to 'do' anything else these movers were hyped to change transportation fundamentally . Just like bitcoin sometimes gets hyped up that it will change transactions fundamentally. Both will exist and be players in their sectors but will only ever be one part.  Bitcoin will not for example destroy visa or mastercard who make most of their money not from the transactional part but from being short term borrowers charging high interest.

  

tele-porting gold, while running your own bank, and you can't be stopped, sized or devalued  .... is quite revolutionary

the fundamentals are there, but you need some familiarity with what the fundamentals of fiat are, and they buying of stuff is only a small part of it. How, when and from whom you can buy, seize, and issue the currency are far more important