{"id":19810,"date":"2013-04-10T12:55:41","date_gmt":"2013-04-10T16:55:41","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=19810"},"modified":"2016-12-17T11:41:41","modified_gmt":"2016-12-17T16:41:41","slug":"if-theres-a-bitcoin-bubble-it-doesnt-predict-long-term-success-or-failure-for-the-currency","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2013\/04\/10\/if-theres-a-bitcoin-bubble-it-doesnt-predict-long-term-success-or-failure-for-the-currency\/","title":{"rendered":"If there’s a “Bitcoin bubble”, it doesn’t predict long term success or failure for the currency"},"content":{"rendered":"

In Forbes<\/em>, Tim Worstall<\/a> explains that calling the current rise in Bitcoin value a bubble does not actually pass a judgement on whether Bitcoin will be a long term success:<\/p>\n

And yes, I\u2019m still of the opinion that Bitcoin is in a bubble. You know the walks like a duck, quacks like a duck idea? If it does those then it\u2019s a duck. And the price changes that we\u2019re seeing in Bitcoin make me and many other observers think that Bitcoin really is in a bubble. Indeed, there\u2019s some nice work here showing that many of the Bitcoins in existence are being hoarded and that in itself is bubble behaviour.<\/p>\n

However, do let me make one more thing clear: whether or not Bitcoin is in a bubble or not doesn\u2019t mean that Bitcoin will succeed or not. They are entirely different questions, as different as is your wife Welsh or is your dog female? They really have no connection with each other at all.<\/p>\n

Let us take the standard bubble example always used, the Dutch tulipmania. We could use others, the South Sea Bubble, the dot com boom, or we could even use an entirely different set of examples, say the introduction of the automobile. That last being when a new technology arrived without a speculative bubble around it.<\/p>\n

The point of the first three, and let\u2019s stick with tulips, is that there really was a quite obvious bubble in the prices of them. Most of the participants in the bubble (as with the other two) knew quite well that it was a bubble too. Prices were way out of line with any sort of \u201ctrue value\u201d. However, do note this very well: the tulip did indeed go on to become an important part of the Dutch economy. Indeed, it\u2019s still there right now. Vast fields of tulips are grown there every year to supply cut flowers and bulbs for replanting that are shipped all over Europe. It\u2019s actually become so important that other flowers, grown outside Europe, are still marketed through Holland as that\u2019s where all the skill and infrastructure is.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

In Forbes, Tim Worstall explains that calling the current rise in Bitcoin value a bubble does not actually pass a judgement on whether Bitcoin will be a long term success: And yes, I\u2019m still of the opinion that Bitcoin is in a bubble. You know the walks like a duck, quacks like a duck idea? […]<\/p>\n","protected":false},"author":1,"featured_media":35193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":true,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25,7,15],"tags":[899,157,58,563,222,1084],"class_list":["post-19810","post","type-post","status-publish","format-standard","hentry","category-economics","category-history","category-technology","tag-bitcoin","tag-encryption","tag-internet","tag-money","tag-netherlands","tag-speculation"],"jetpack_featured_media_url":"https:\/\/quotulatiousness.ca\/blog\/wp-content\/uploads\/2016\/06\/favicon.png","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-59w","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/19810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=19810"}],"version-history":[{"count":3,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/19810\/revisions"}],"predecessor-version":[{"id":19812,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/19810\/revisions\/19812"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media\/35193"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=19810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=19810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=19810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}