Always wondered about the origin of this mania. Turn out the roots (pardon the pun) are a common story: inflation. Back then the monetary inflation was caused by hordes of gold and silver arriving from the new world. Portuguese treasure ships were captured by Dutch ships and the booty pressed into Dutch currency.
As John Quincy Adams noted, rampant currency inflation causes rampant speculation, and Holland was no exception. There was even a futures market in tulip bulbs before the whole thing collapsed.
The tulip bulb mania was constantly cited as a parallel to the supposed crypto bubble.
Glad to see Mises managed to mention the former without the latter. Gives me some hope that our respected institutions are coming around to the idea that a government monopoly on currency makes no more sense than a government monopoly on anything else.
I may have been guilty of that at one time, but I am beginning to change my opinion.
I still don’t really trust crypto, but I am not ant-crypto.
Where I saw the tulip comparison is the 2008 housing bubble. I read the book I’m about 2005 and saw it coming.
I think the problem with Bitcoin is the government hates competition. If it becomes a viable competitor to the Dollar, the government will regulate it into oblivion. So that means crypto will be fringe stuff, used for dark web purchases and bought and sold based upon feelings and not real value.
This is not my opinion but it sounds logical to me.
An excellent recent article at Mises.org you should read explains how government monopoly of printing precious metal coins was abused. The author contends the days of gold deposit certificates by private banks was superior.
Few know that foreign coins of know value were preferred in our country’s first 50 years of existance. May the most reliable currency win!
There has to be less volatility before cryptos are widely accepted.
I started to believe in crypto when our favorite sushi restaurant posted that they take it for payment.
I don’t fuck with it because I don’t understand it.
Bit you bring up a good point of the Government probably crushing the competition becomes readily viable.