The “Tulip Mania” argument is used against Bitcoin again, this time the one using the comparison is Joseph Borg, the head of the North American Securitie Administators Association. That’s not a surprise that someone in a field that might be fundamentally threatened by Bitcoin (as more people choose to invest in cryptocurrencies over traditional investments, such as securities). But to use the “Tulip Mania” argument against Bitcoin is a reflection of Borg’s fundamental misunderstanding of how Tulip Mania is not a good comparison to Bitcoin mania, or of Borg’s willingness to spread lies to try and combat the rise of digitial currencies with fear tactics.
Tulip Mania was based on a plant that had no utilitarian value outside of an aesthetic one. Bitcoin mania, really, cryptocurrency mania, is based not on an aesthetic value (it’s not simply a novel, pretty plant) but on a real utilitarian value, being able to buy and sell products and services with currencies that are not being manipulated by the state. Bitcoin may be the giant Godzilla of crypto, but it’s still just the tip of an iceberg that is far deeper and far more complex than a single species of plant could ever have been.
Still, here’s an excerpt from this latest example of Bitcoin Fear Mania, coming from the people who are most threatened by its rise.
In the 1630s, the Dutch went absolutely wild for tulips. Demand for the flowers was so ridiculously high that prices rose astronomically, until a single bulb could cost as much as 10 times a person’s entire annual salary… until it all suddenly collapsed in 1637. The phenomenon has become known as tulip mania.
That’s the historical event the president of an investor protection organization saw as the best parallel for the current bitcoin craze during an appearance Monday on the CNBC show Power Lunch. He made the analogy while explaining what he saw as a fundamental uncertainty around the blockchain-based cryptocurrency.
“The problem is this: Innovation always outruns regulation, and right now there’s very little regulation in this entire area,” Joseph Borg, the head of the North American Securities Administrators Association, said on the show. “So we’re waiting to see what happens. Right now, this is sort of the mania phase of it, it’s kind of like tulip mania without the tulips right now.”
Borg described just how far people were willing to go to get in on bitcoin’s surging value, with some suggestion that people are being sold false promises even beyond whatever one may think of the cryptocurrency’s nearly constantly rising price.
Read More at Inverse.com