Comparing Bitcoin (BTC) to a bubble on a Dutch tulip bulb maintains the deception. Technology is evolving faster than nature, and a decentralized network has more financial benefits than a bundle of flowers.
Comparing Bitcoin (BTC) to a bubble on a Dutch tulip bulb maintains the deception. Technology is evolving faster than nature, and a decentralized network has more financial benefits than a bundle of flowers. Bitcoin is a technology, tulips are plants, and no intelligent person is going to make any further comparisons. Tulipmania, a 17th century market bubble in which the price of a bulb rose due to speculation by Dutch investors, caused a major slump. Prices exceeded six times the average annual income at the time. The rarest light bulb is one of the most expensive items in the world.
Even though the Bitcoin network has been up and running since 2009, its comparison to the tulip bubble remains uncomfortable. Last February, British economist and European Central Bank board member Gabriel Mahluff reminded us superficially of Bitcoin: "300 years ago people invested money in tulips because they thought they were investments." Bitcoin opponents repeatedly use Tulipmania to live up to their petty expectations. Tales of the tulip mania were popularized by Scottish journalist Charles Mackay in his 1841 book Memoirs of Extremely Popular Misconceptions and Crowd Madness, as Mackay wrote: How to fly around a honey pot, sailors, henchmen, servants, even chimney sweeps and old women's clothes. , dug in the tulips. When the tulip bubble burst in 1637, McKay claimed the Dutch economy was in chaos.
While the absurdity of the situation is a good story, scientists note that Mackay's retelling of tulip mania may not even be true. Historians in particular do not support this version of events. Anne Goldgar, Professor of Early Modern History at King's College London and author of Tulipmania: Money, Honor and Knowledge in the Dutch Golden Age, explains why Mackay's version is not suitable. "It's a great story, and the reason it's great is because it makes people look stupid," said Goldgar, who complained that even a serious economist like John Kenneth Galbraith Mackays in A Brief History of Financial mimicked euphoria. He continued: “But the idea that tulip mania causes a lot of depression is completely wrong. I don't think that this has any real impact on the economy. "
In addition to the Dutch tulip craze, the bull market in blockchain technology is sometimes written off as a bubble similar to the dot-com bubble. This is a better, if not accurate, comparison. In all its forms, including cryptocurrencies, DeFi, or non-fungible tokens, the internet of money has not yet entered its bubble phase or featured all applications. We're in the mid-nineties, which is the dot-com era, and we're nowhere near a scene bubble. Moreover, the impact of the dotcom bubble on humanity is far less than the impact of the internet, a model that blockchain is likely to follow – especially when compared to tulip bulbs. Past crypto bulls have had a much bigger impact than price increases. In 2013, the world realized that Bitcoin existed. In 2017 and 2018, they acknowledged that crypto existed. Since too many projects from 2017 have turned out to be smooth sailing - many seem to be purely fundraising - this timeline is just a visualization of what lies ahead.
The recent 2020-2021 bull market, the first since Initial Coin Offering Mania (ICO), was never the big bull market they had been waiting for. Instead, like 2017-2018, it was another demonstration of the future that put blockchain even more in the spotlight. During the upcoming bull market likely in a few years, the leading institutions are DeFi and Crypto. This process has already started. Meanwhile, FAANG employees (Facebook, Amazon, Apple, Netflix, Google) look at the writing on the wall and leave the table to build the crypto landscape with intuitive products. Anyone in finance should research DeFi and think, "I'm going to lose my job if I'm not careful." Winklevosses once said that each FAANG company would have its own crypto project, a process known as hyperbitcoinization.
This issue for DeFi shows that blockchain is the future of fintech, and not just a bubble. We are still very early. During the dotcom boom, engineers started leaving the companies they worked for and started developing their ideas and questioning the user experience (UX) and user interface (UI) of the time. Subsequent improvements in UX and UI design simplified the internet and eventually introduced it to every home. Brilliant programmers and blockchain developers are pushing boundaries across many industries. But they don't quite push the boundaries of UX and UI. This is next.
Since the UX and user interface of the blockchain is not very user friendly, the average institution will still not be able to accept the system and integrate it into the existing process. After venturing into the greener meadows of blockchain, Silicon Valley and Wall Street talent will start to move things forward. High-end funds and projects are considering improving the UX and user interface of the blockchain for the upcoming showcase. Once technology realizes that blockchain is the future, it will bring unique capabilities that will push the boundaries of the crypto-powered internet with UX and UI. Similar to the dotcom era, technology has become easier to use and is used more regularly in everyday life.
It is only with increasing difficulty that we can remember a time when most of the world did not use the Internet. Internet users made up only 10% of American households in 1995, five years after the first web browser was introduced. Five years later, in 2000, 50% of Americans use the Internet. The representation of the world today without the Internet is simply unthinkable and, in the future, this will also apply to cryptocurrencies. The technology promoted by the crypto industry is often seen as the most destructive and paradigm-shifting advance since the birth of the internet itself. They are rapidly changing the way people interact, act, and gain autonomy for their own wealth and assets. Internet adoption was slow in the early 1990s. The newly developed network addresses concerns about scalability, confidentiality, and usability. Today we are experiencing the same major problem with cryptocurrencies and blockchain. To accelerate mass adoption, we must wear the hat of a consumer experience designer, because only then will we see cryptocurrency reach its full potential worldwide.
Crypto is not an easy concept. The industry is trying to push new technologies into traditional funding models. This may be easy for some, but definitely not for most. First of all, it is important to report why there are significant differences between traditional money like euros, dollars, pounds, etc., and cryptocurrencies like Bitcoin (BTC), ether (ETH), etc. Most people don't understand that Bitcoin is a global and decentralized digital currency that is not backed by a central authority and immune to government interference. This year the Federal Reserve is pumping trillions of dollars into the nation's economy, which will have consequences later on when inflation inevitably rises. Bitcoin, on the other hand, has a limited supply. With a certain maximum it is anti-inflation. This means that its value increases over time.
Apart from nodes and hashrate, we need to better educate the public on how understanding and accepting cryptocurrencies doesn't have to be complicated. What holds many people back is their lack of understanding of things like crypto wallets and private keys. But we have to explain to users that using crypto is easy, affordable and very useful. At the same time, it should be noted that it is not just cryptocurrencies against the traditional banking scenario - banks and institutions are also integrating cryptocurrencies into their systems. We all accept crypto together. Many cryptocurrency exchanges build close relationships with banks around the world, and traditional institutions also train their users on the many benefits of crypto. Take PwC, for example, which publishes an annual report on crypto hedge funds that aims to encourage the adoption of good practices as this innovative space advances. Banks like ING now regularly invest in research to educate their consumers about the "money revolution".
What keeps most people from entering this room is the perceived complexity of the board. Today, those who understand how cryptocurrency technology works are reaping the benefits of its value. New users should not be excluded simply because they do not have access to more than one form of funding. Consumers should be sure that they can convert their fiat funds even when using Bitcoin, a stable cryptocurrency or other, if it is convenient for them. Crypto debit cards now serve as a solution to meet this demand. Accessing cash can be as easy from a crypto ATM as it is from a traditional fiat bank account.
New users are not sure if this is possible. We need to help them feel comfortable buying and trading crypto, which is why it's important to engage users with an easy-to-use app. The beauty of crypto is the ability to access different types of currencies in one place. It is up to the crypto community to simplify the acceptance process by making it as convenient as accessing traditional finance from an everyday bank. Do email users need to understand the ins and outs of their email system? No. What you need to know is that it is a reliable communication tool. For a positive inclusion experience, it is important to help consumers understand the process. The process should be intuitive and meaningful.
In order for users to accept crypto, it must be required. What's the point of switching to a new type of money if my existing bank account is working? What needs does the market have for learning and accepting new forms of financing? It took a global pandemic, escalating political conflict, and other macroeconomic factors to make people realize that we have less control over our own finances than we think. Traditional Fiat can be invested and spent in ways that are beyond our control, through solutions that often-cost others. We know very well from past financial crises that we cannot control the value of our money when it is in traditional fiat. Cryptocurrencies offer greater autonomy in deciding where to invest and give people back control of finances.
Crypto also gives consumers the ability to earn back crypto while shopping through a new ecosystem of crypto reward systems. Only now are we seeing more attractive memberships and cashback perks that crypto hasn't had since the currency was born, but it's important to stick to what traditional fiat has to offer and move on. Traditional fiat reward systems typically replace "rewards" which are often limited to airline miles and other reward systems. Crypto cashback, on the other hand, offers the opportunity to get a percentage of your transaction value back in Bitcoin. If holding bitcoins is more attractive than spending them, creating a cryptocurrency-like reward system without a crisis, without the need to visit a bank, makes cryptocurrency adoption more intuitive.
These types of currencies are also unlimited - if you have access to an ATM that accepts MasterCard or Visa, you have access to your finances. This significantly reduces cross-border transaction fees and allows instant access to your money wherever you are. Mass bitcoin adoption is inevitable and those who are late to the party may forget to buy this asset which is sought after for an affordable investment. Cryptocurrency exchanges provide consumers with access to a wide range of currencies from stablecoins to fiat to cryptocurrencies, increasing the availability of greater financial freedom and multi-currency trading. Communication for this will be very important. The way we shape the experience for new users will determine the acceptance rate of bitcoin from mainstream finance. Everyone has the right to access these transformative forms of finance.