Boom, Bust, and Bitcoin: Bitcoin-Bubbles as Innovation Accelerators
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Author / Producer
Date
2022
Publication Type
Journal Article
ETH Bibliography
yes
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Abstract
Bitcoin represents one of the most interesting technological breakthroughs and socio-economic experiments of the last decades. In this paper, we examine the role of speculative bubbles in the process of Bitcoin's technological adoption by analyzing its social dynamics. We trace Bitcoin's genesis and dissect the nature of its techno-economic innovation. In particular, we present an analysis of the techno-economic feedback loops that drive Bitcoin's price and network effects. Based on our analysis of Bitcoin, we test and further refine the Social Bubble Hypothesis, which holds that bubbles constitute an essential component in the process of technological innovation. We argue that a hierarchy of repeating and exponentially increasing series of bubbles and hype cycles, which has occurred over the past decade since its inception, has bootstrapped Bitcoin into existence.
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Publication status
published
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Book title
Journal / series
Volume
56 (1)
Pages / Article No.
113 - 136
Publisher
Taylor & Francis
Event
Edition / version
Methods
Software
Geographic location
Date collected
Date created
Subject
bitcoin; money; cryptocurrencies; financial bubbles; technological innovation; economic growth; reflexivity
Organisational unit
03738 - Sornette, Didier (emeritus) / Sornette, Didier (emeritus)