Bitcoins, Tulips, Sparkling Diamonds, Fiat Moneys and Gold

by tonytran2015 (Melbourne, Australia).

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(Blog No.106).

#Bitcoins, #tulips, #diamond, fiat money, #gold, #investment, #investment mania,

Bitcoins, Tulips, Sparkling Diamonds, Fiat Moneys and Gold.

You may want to store your earning surplus for rainy days. Here are a number of easy options, including those of the current and past investment manias! They are gold, fiat money, sparkling diamonds, tulips and bitcoins.

1. Bitcoins.

Imagine a club with limited number of equal ranking memberships (less than 10 million memberships). The memberships are transferable (can be resold), you can buy more than one membership, and memberships are well protected from counterfeiting

(using Blockchain technology).
Currently the price for each membership is higher than $1000US and keeps on rising. Memberships from competing

similar clubs are also booming.
How much would you pay for one membership to belong to the club? US$16000 or US$10000 or US$1000 or US$100 ?
The club is now known as the Bitcoin Owners Club. Competing clubs are for owners of other crypto-currencies.

2. Tulips

Figure: Tulips (currently at $2 a bulb).

Tulips are beautiful flowers which require skillful cultivation and are perishable.There was an (informal) club of Tulips owners in Holland. Anyone owning a beautiful tulip is automatically its member (You don’t need to grow the flowers yourself, you can buy them from anyone and they are good until they perish!). This informal club flourished then quickly dissolved itself in Holland. The phenomenon is named the Tulips Investment Mania.
Obviously people have to grow tulip flowers to harvest them and the total number of tulips is limited as their total mass cannot exceed the mass of our plannet Earth!How much are you prepared to pay for a beautiful Dutch tulip now?

There were numerous analogue repeats of the tulips mania in Vietnam. They did not use tulips but used instead chameleons, quails, specific types of fish in fish tanks. Those manias all ended up in the same way.

Figure: Any other flowers can also be used to start a mania.

3. Sparkling Diamonds.

Figure: Glass model of a “brilliant cut” diamond.

The sparkling diamonds are mined and marketed by De Beer Group. Its successful marketing slogan is “Diamonds are forever”. You pay high price for any diamond but you would be lucky to get half of that money when reselling the diamond immediately after buying.

Nevertheless, girls are still asking their husbands for diamonds!

4. Fiat money

Figure: Fiat money can always be used to pay taxes. .

You are forced to receive your salary in the fiat money of the country you are living in!

Fiat money may partially “perish” due to inflation or may (very rarely) appreciate due to its scarcity.

Fiat money can always be used to settle your taxes, service fees and fines with your government whereas tulips and bitcoins cannot.

Figure: Modified photograph of a note of US$100, the best known fiat currency in the World.

5. Gold.

Figures: 1 ounce gold slab.

Gold is a compact commodity. It can be swapped for any other commodity when there is a need.

There is always a demand for gold everywhere and the supply cost is almost constant in human history. So gold can be bought as a form of compact property and sold when required.