Authored by Aaron Brown via Bloomberg.com,
The problems cryptocurrencies help solve will not disappear if their prices collapse the way tulip futures did in the 17th century.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon made news last week by criticizing bitcoin. 
Asking a bank CEO what he thinks of bitcoin is like asking the head of the post office what he thinks of e-mail.
In a perfect world, Dimon would note the reasons why people use the cryptocurrency along with the dangers, and explain how JPMorgan is working to provide its customers with the advantages that come with bitcoin in safer forms. Instead, he denounces innovation as fraud and threatens to fire any employee who trades in bitcoin.
Dimon compared bitcoin to tulips, which is accurate, though not in the way he intended. Popular notions of the 17th century Dutch Tulipmania are derived from an 1841 book “Extraordinary Popular Delusions and the Madness of Crowds,” by a fact- and logic-challenged journalist named Charles Mackay. Mackay confused two distinct eras. He reports stories from around 1610 about high prices paid for individual bulbs. What he failed to realize is that people were not paying for single flowers, but for the entire breeding stock -- or a significant portion of it -- of popular new tulip varieties. People have continued to pay higher inflation-adjusted prices for new tulip and lily bulbs to this day.
A quarter century later, a futures market grew up around fractional interests in low-priced, ordinary tulip bulbs. In premodern Europe investment returns were very high, 20 percent or 30 percent per year on low risk investments, but laws and customs prevented anyone not in the merchant class from taking advantage.
Holland accidentally created a loophole by allowing contracts for fractional interests in tulip bulbs for the convenience of the industry. These were needed because the price of popular new bulbs was higher than even rich individuals could afford. In the early 1630s ordinary people discovered that these contracts could serve as money to support business and investment. These contracts then became “monetized,” as happens to all assets used as bases for monetary activity. That means their value decoupled from the use value of the underlying asset and became determined by demand for money services.
By 1637, contracts for fractional interests of low-priced tulip bulbs had risen to 20 times the price of the actual bulbs, reflecting the explosion of economic activity they stimulated. In February 1637, the market collapsed; six weeks later it was outlawed.
Something similar happened with bitcoin.
People began using it in 2009 because it solved problems of the existing money and banking system: inflation, expropriation, taxes, use restrictions, financial repression and fees, especially for small and cross-border transactions.The economic value of these services serves as the underlying base of value, just like the value of tulip bulbs supported the tulip futures contracts. But bitcoin became monetized and its value far exceeds the current use value in transactions. Its value is now based on projected future need for protection against the problems it solves. If this be fraud, all money is fraud.
Dimon went on to claim that governments would suppress bitcoin because they like to control their own monetary policy.This is a strange objection. It seems to assume bitcoin will increase dramatically in value, because it would have to in order to be significant in global money supply. (Full disclosure: I own bitcoins and other cryptocurrencies as well as shares of JPMorgan)
A better reason for governments to suppress cryptocurrencies is that they make it easier for people to evade taxes and regulations. Many of the advantages of a cryptocurrency from a user’s standpoint are disadvantages to people who want to control users. Cash is a far better tool for evasion, and no government has yet outlawed cash -- or even stopped printing it. The most financially repressive governments have not taken effective action against cryptocurrencies. Any efforts to suppress simultaneously make cryptocurrencies more valuable.
Bitcoin values may well collapse the way tulip futures did, either on their own or due to government efforts. But the problems cryptocurrencies address will not disappear with that collapse. People will continue to pursue technological innovations to improve financial services. The eventual winners may be traditional financial institutions that innovate or new entrants. But it’s a safe bet they will not be financial institutions that fire employees who take bitcoin seriously and ridicule customers who try to help themselves without waiting for JPMorgan to take notice of their problems.
Source : http://www.zerohedge.com/news/2017-09-18/what-jamie-dimon-got-wrong-about-bitcoin-tulips
Jamie Dimon might be part of the Illuminati
Makes a lot of sense, interesting to read a more in dept story about the tulip mania, didn't know this yet
Great article. It will be very interesting to see how this plays out going forward. Really good explanation of just how the Tulip mania played out. It's one of the most fascinating and misunderstood financial happenings in semi-modern times.
In my mind, it is a done deal. Cryptocurrencies, bitcoin especially, are NOT going anywhere. They will not collapse nor will they be outlawed/eliminated. Why do I say this? My reasoning is simple: the financial institutions are involved in them. It is a new toy for them to offer to their clients. In addition, the banksters are scooping these things up left and right. Do not think for a second that Dimon has no crypto in his holding nor that JPM is without them either. I can guarantee you both have a lot more than the 9000 BTC that were purchased last week.
The underlying technology simply is too strong, too innovation, and too revolutionary. There is no way people will revert back to the old model once they find the blockchain payment system. Seriously, who on here wants to post on Reddit of FB for free? Who wants to pay to listen to the radio when you can get paid for it? Why not get paid for storage? Your music? Your art? You comments under an article.
All have value as evidenced by the wealth of the likes of Zuckerberg. Now it is time for the masses to take control and share in the wealth.
Internet First Generation opened up the informational chain....Internet 2.0 is opening up the monetary chain. It is time for the masses to get paid.
Thx for share this with us..
It would seem there is even more misinformation and confusion surrounding the history of tulip mania than there is in Bitcoin journalism.
Who'd've thought?
Love the Jamie Dimon analysis. We'll see how he feels when his excessive bonus is paid in Bitcoin
"Tulips are not a system of account that is free, open, immutable, distributed, encrypted, and unstoppable by anything other than massive world-wide blackouts.
That's why Tulips are a bubble, and Crypto is money."
I don't there a quite a few naive people that think this will be smooth sailing and replace "money".
Either way, I'm in for the long hall.
Great posts
Still i would say the ratio between how the utility value is actually estimated and the certitude it has huge future speculative value based on this supposed utility value is still weird.
Hiw many people actually have any kind of number on which to base this utility value, in'which sector of the economy, compared to other options available, except repeating the mantra about decentralization which is not even true anymore for bitcoin at all , and its impossible to use it both as efficient currency and speculative assets with so little backing behind its value.
Most people who use bitcoin are mostly in for promise of huge rise, and just sit on their btc waiting for the prophetic huge rise, rather than really trying to listen to potential customer or problem with it, almost starting to act as ca ult, rather than trying to make it really useful for actual buisness in real economy.
With this sort of attitude, cumulated with the thousand of scams, ponzi, and all organized with it, its no wonder it fail to get trust from mainstream economy.
From the outside, id bet most noob who actually tried to get some bitcoin got scammed t least once, without counting all the bugs, mistake, latency, and esoteric interface to pile up more loss and questions than anything, and there always huge number of people exploiting those cracks compared to the number who really want to helps and improve clarity and fix problems or helping noobs and layman.
This culture of pseudo elitism in early day that being early initiate in crypto in early days to mine easy coin and get the first round of big profits doesnt really helps the reputation either, and still have impact on the attitude of many user of cryptos.
At some point need to take a good firm honnest look at where does the money come from in this huge soeculative profits making, and its most likely not from utility value, so in this it can still largely be called some kind of speculative craze, and still mostly a bubble for the moment.
WTF i DONT like how youre getting $42 for reposting a plagarized article by Authored by Aaron Brown via Bloomberg.com, which you even ADMIT WTf where is @cheetah and @steemcleaners bro wtf u cant just repost other peoples articles on steemit as your own and just get paid for them, you know this is wrong wtf you cant just repost other peoples articles....u gonna donate this steem or what???? wtf https://www.bloomberg.com/view/articles/2017-09-18/what-jamie-dimon-got-wrong-about-bitcoin-and-tulips you copied this post WORD FOR WORD and SO WHAT if you "cited" it wtf you didnt add ANYTHING you just copied and pasted an article and fuckin posted it on steemit....fucking add something to it....dont just copy and paste articles