Bitcoin Isn't Tulips

I know I’m sick of reading the comparison of tulips to Bitcoin, here is a written piece by Panos Mourdoukoutas of Forbes tackling the false comparison.

Bitcoin Isn’t Tulips

Bitcoin has a couple of things in common with the famous 17th century tulips – as an investment vehicle that is.

One of them is the promise to change peoples’ lives, which excites and hypes investor imagination. Another is the astronomical rise in the prices of the two investment vehicles, which helped early investors amass fortunes in short periods of time. Bitcoin has gained 30% in seven days only—see table.

Coin % 24H % 7d
Bitcoin (BTC) 0.21 30.65
Ethereum (ETH) 0.33 11.32
Litecoin (LTC) 2.96 18.37
**As of Saturday October 14, 2017, at 10.30 am
Source: Coinranking.com

But tulips and Bitcoins differ in one respect.
The supply of tulips isn’t fixed. Tulips can be farmed quickly, and that makes their supply responsive to prices. The higher that prices climb, the larger the quantity of bulbs farmed and brought to the market. Eventually, there comes a time when supply outstrips demand, setting the stage for a market crash.
That’s what happened, for tulips, back in February of 1637.
The supply of Bitcoins, by contrast, is fixed. Bitcoins can be mined, too, but their supply isn’t responsive to pieces. It’s already set at 21 million, perhaps even less, as some Bitcoins may have already been “lost.” That makes it less likely for the Bitcoin market to collapse the way tulips didback in 1637.
To be fair, there’s plenty of supply of other cryptocurrencies that are competing with Bitcoin, but they are insignificant, as evidenced by the market capitalization of them—see table.

Coin Market Cap
Bitcoin (BTC) $94,977,188,58
Ethereum (ETH) $32,640,739,32
Litecoin (LTC) $3,271,491,302
*As of Saturday October 14, 2017, at 10.30 am
Source: Coinranking.com

A fixed supply makes Bitcoin prices demand driven. The more people become familiar with the cryptocurrency, the higher the demand and the price for Bitcoins.
Until, that is, big government, big banks, or fraud somewhere in the cryptocurrency world crushes it.

Tulips don’t require electricity, an internet connection and a third party to do a transaction. Also no need to leave an entry in a ledger recording the transaction.

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Sadly, it’s a lot closer to tulips when the fees for use make it a questionable unit of payment for everyday transactions. The “store of value” people have forgotten that there has to be some basis for a perception of value, and for cryptocurrency, it’s security combined with liquidity. Liquidity takes a real shot when the average transaction is over $3. This is why I trust Roger Ver’s point of view on Blockstream.

It’s also sad when the fees are so high that people in third world countries where they need it most find it infeasible. I’m glad Dash, Bitcoin Cash and others exist.

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There have been times transactions were slow (spam, empty blocks mining) but its pretty good now most of the time.
They can be expensive too but one can modify fees and pay whatever you want to. Unfortunately people dont and stick to the fast or default (mid-range) suggested in the wallet. Not sure why this isn’t suggested more often.
I’ve done transactions of decent amounts for cheapo fees. It wasn’t instantaneously transfer but I’m always pleased with the process wrapped up in a couple of minutes.

I will continue to hodl ‘my storer of value’, whereas others should trade it away quickly, certainly before it touches 10k.
I am glad there are alternatives for people that hate or cant afford bitcoin because if the altcoin has nice features, they can always be adopted into Bitcoin.
But we warned, the trust, the tech is with the king. The original Bitcoin.

Name recognition is almost always more influential than it should be. In the case of crypto, there are a lot of poor investments, so the “safe bet” is highly overvalued much of the time. By far my biggest “HODL” is in BTC, but that’s because I first bought at $11-13, and I’m not anywhere near ready to move it. I did move a small amount to Dash, and I’ve kept my BCH. I spent enough BTC before the forks that I can say I’m “working with the house’s money” (though there really is no “house.”) I’ll probably keep the BTC and the B2X after that fork, too, not to mention the Bitcoin Gold. I’ll sort all that out after the winner(s) mature(s).

I’m glad BCH exists, in case segwit proves to be a huge mistake (or deliberate sabotage.) As for Bitcoin Gold, I don’t see ASIC resistance being very successful in the long term, so I might dump that fairly early.