The bubble in comparing Bitcoin to the tulip bubble has gotten out of hand.
Bitcoin and Blockchain
We place our trust in financial intermediaries because they have made costly investments over time to engender that trust. Processing payments on a blockchain essentially avoids these costs.
Mass adoption of cryptocurrencies is unlikely to take place unless there is “significant monetary instability” or “government support” (fat chance, at least with bitcoin).
Why do some commentators, all smart and competent economists, investors, and journalists, reach such vastly different conclusions about Bitcoin and blockchain technology?
To maintain a high value in the long run, and thus be used as a currency, Bitcoin's dramatic rise will eventually have to moderate.
This is the third and final article in a series about blockchain-enabled “smart contracts” and their ability to address retail fraud.
Imagine if every time you bought a sandwich for a few dollars, the IRS forced you to treat as capital gains or losses any change in value of those dollars on the foreign exchange market since the time you earned them. That’s the way the U.S. government treats two legitimate forms of currency: gold and cryptocurrencies.
The high price of bitcoin serves as a reminder of its rigid supply, which might ultimately be its undoing.