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Ⅶ Appendix

Research Paper Presented in The 7th Academic Forum
of Special Purpose High School in Incheon 〔2017.11.10〕

A Treatise on the Interpretation

of the Bitcoin as a Speculative Bubble

or an Alternative Currency

Sokjun Hong(2-1)
Minsung Kim(2-7)

Abstract vulnerable to external tampering could be a priceless risk.
Some even go further and maintain that Bitcoin is yet an-
This study was designed to suggest the aspect of bitcoin as other financial fad which will, in time, turn out to be no other
a speculative investment. Through a thorough analysis on than another ‘financial bubble’, in which high rewards and
historic precedents of economic bubble, notable character- corresponding risks can be expected at the same time.
istics of economic bubble would be drawn out. On the back One of the first recorded cases of mass economic bubble
side of application of these speculative features to the cur- effect is the tulip bubble incident of the Netherlands, or the
rent bitcoin industry, we have drawn out some interesting Tulipomania, where people applied financial significance to
speculative aspects of Bitcoin - volatility, instability, insub- a product of little financial property and unintentionally re-
stantiality, vulnerability, and heavy reliance on customers. nounced control of the market, permitting the price of tulip
Each of these individual factors goes on to support that Bit- bulbs to skyrocket. Bitcoin is yet another unstable platform
coin is a highly ubiquitous yet dependent factor on specula- where economical transactions are irreversible and are ex-
tive methods. Ultimately, that Bitcoin surely can be perceived posed as it comes without a safety net or a centralized eco-
as a method of speculative investment, even though it may nomic party. Still, despite these high risks, some currencies
be lacking physical resources, carrying unstable values, and are appealing to users as ‘an alternative currency’, creating
showing high fluctuations in prices. a zeal for them as well as making customers willingly pay
the price of imminent risks. This could be highlighted as a
tendency to take financial risks, creating economic bubbles
Ⅰ. Introduction and fads across the population. As an attempt to gauge and
comprehend the tendencies and underlying reasons for
Cryptocurrency is currently being highlighted as a novel fi- economic bubbles, along with Bitcoin popularity, overall re-
nancial platform with low fees guaranteed, boasting an un- view of some of historical financial bubble effects will be
precedented ubiquitous social infrastructure where dealers done throughout this paper, with much focus on the status
can participate in economic transactions all over the world. quo and prospects of Bitcoin.
Bitcoin is all the rage now as potential users can transmit
currency anywhere, anytime, without paying the usual high-
rating fees in the way. However, some are pointing out that Ⅱ. Theoretical Background
Bitcoin cannot be highly trusted, asserting that heavy re-
liance on intangible resources and unstable system highly 1. The 1630s tulip bubble in the Netherlands

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