In times of extreme fear, uncertainty and doubt (FUD), Bitcoiners need FUD-busting.
In 1710, almost a decade before the South Sea Bubble in England and the Mississippi Bubble in France, the essayist and author Jonathan Swift[1] wrote the following iconic lines, echoed by many of history’s most famous writers[2], about truth and lies and their effects:
“... it often happens, that if a lie be believed only for an hour, it has done its work, and there is no further occasion for it. Falsehood flies, and truth comes limping after it; so that when men come to be undeceived, it is too late, the jest is over, and the tale has had its effect.”
Little did Swift know that falsehoods reminiscent of his own era’s financial manias would reemerge again and again more than three centuries later, wielded by economists who don’t know[3] the first thing about the monetary and cryptographic invention they are more than happy to attack.
These critics of Bitcoin often mention the South Sea Bubble, Tulip mania[4] or the Mississippi Bubble, thinking that they hold the definitive trump card. And Bitcoiners, sometimes unfamiliar with much of financial history[5], object that bitcoin is not in a bubble, leading to the usual impasse that we can’t readily identify[6] a bubble[7] until after it has burst.
Since my academic training is in financial history, I have always found another avenue to be more fruitful: object to the analogy altogether. I know a thing or two about the episodes that Paul Krugman[8], Nouriel Roubini[9] and others routinely invoke — and I don’t think they know
