When it comes to Bitcoin and Co., it is often said that it must be a speculative bubble. But that could turn out to be a mistake.

If you had the choice, what would you choose: You either get: a) $ 10 000 a week over a period of one year, or b) during the same period every week, double the previous week, starting with a dime? If you think like most people do, you intuitively opt for the staggering $ 10,000 a week and $ 520,000 at the end of the year. And if you had chosen the option with the cent? Then you needed a financially strong opponent: They would then have almost 87 million times as much as in the first variant, namely over 45 trillion dollars.

The reason for this is simple: Our brain can imagine steady, linear growth, but exponential can not. A stock that is already steadily increasing in linear terms is already ringing the alarm bells. If, on the other hand, it increases exponentially, the bursting of the bubble is supposedly close according to the motto “What comes up, must come down”. Since Dutch tulip speculation, it has always been like that or not?

Counter question: Do you go by train, car or plane every now and then? These are inventions of the last 100 + x years, whose distribution in the course of time has only ever increased worldwide. Software has been expanding exponentially in all areas of life since the 1970s, and so has the smartphone. But does anyone speak of a bubble in all these examples? Somebody says: “Digitalization has spread so blatantly, that will all end in a huge crash, and then we are back in front of a slide rule”?

The biggest mistake about bitcoin might be that you consider this innovation as a pure asset class, like a stock, government bond, or even a tulip – and forget about the network effect. Bitcoin is network-centric money, and blockchain-based business models are novel platforms that make sense everywhere it comes to replacing middlemen. Blockchain technology is an invention, like a new tool. And you can not undo inventions any more than you can make an egg out of an omelette.

The unprecedented of this development is that you can track the growth of Blockchain-based business models in near real-time, and look at This does not mean that losses or setbacks can not occur, especially since the sector is still young and highly volatile. But those who compare Bitcoin and Co. with fads such as Pokémon Go, the Fidget spinner or just tulip bulbs, should not forget that on tulip bulbs it was difficult to build a protocol-based, global and decentralized network.

The state and central banks are warning against investing in Bitcoin and Co. One could lose money, said Bundesbank President Jens Weidmann recently. Where are the warnings of state-owned casinos, of state lotteries, of investments in life insurance, government bonds or in their own, inflationary arbitrary propagated government bills, called money?

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