[Annotated] What if the bitcoin bubble bursts?

Is the latest frenzy^[각주:1] like tulipmania^[각주:2], a gold rush or the dotcom boom?

Markets frequently froth^[각주:3] and bubble^[각주:4], but the boom in bitcoin, a digital currency, is extraordinary. Although its price is down from an all-time high of^[각주:5] $2,420 on May 24th, it has more than doubled in^[각주:6] just two months. Anyone clever or lucky enough to have bought $1,000 of bitcoins in July 2010, when the price stood at $0.05, would now have a stash worth $46m. Other cryptocurrencies have soared^[각주:7], too, giving them a collective market value of about $80bn. 

Ascents this steep^[각주:8] are rarely sustainable^[각주:9]. More often than not, the word "bitcoin" now comes attached to the word "bubble". But the question of what has driven up the price^[각주:10] is important. Is this just a speculative^[각주:11] mania, or is it evidence that bitcoin is taking on a more substantial role^[각주:12] as a medium of exchange^[각주:13] or a store of value^[각주:14]? Put another way, is bitcoin like a tulip, gold or the dollar - or is it something else entirely^[각주:15]? 

Start with the case that this is nothing more than a virtual tulipmania, a speculative hysteria^[각주:16] in which a rising price encourages ever more buyers, no matter what the asset is. Bitcoin's recent trajectory^[각주:17] certainly seems manic. Retail investors^[각주:18] have piled in^[각주:19]. Many already familiar with bitcoin investing have moved on to bet on alternatives^[각주:20], such as Ethereum, and "initial coin offerings" (ICOs), in which firms issue digital tokens of their own.

It looks like a scammers^[각주:21]' paradise, yet unlike tulips, bitcoins have real uses^[각주:22]. They now buy everything from pizzas to computers. So if a tulip isn't the right analogue^[각주:23], how about gold? Bitcoins certainly seem to bear more than a passing resemblance^[각주:24]. Goldbugs mistrust^[각주:25] governments and their money-printing tendencies; so too do bitcoinesseurs: no central bank is in charge of bitcoin. But a store of value should not bounce around^[각주:26] as much as this one does: bitcoin swung from more than $1,100 in late 2013 to less than $200 a year later, before climbing, in fits and starts^[각주:27], to its current dizzying^[각주:28] heights. 

Rather than being just a form of digital gold, bitcoin aspires to^[각주:29] loftier^[각주:30] goals: to be a means of exchange^[각주:31] like the euro, yen or the dollar. Regulators^[각주:32] are starting to take bitcoin seriously. Some of the price surge^[각주:33] can be explained by Japan's decision to treat bitcoin more like any other currency. Yet the bitcoin system is operating at its limits and its developers cannot agree on how to^[각주:34] increase the number of exchanges the system is able to handle. As a result, a transaction^[각주:35] now costs nearly $4 in fees on average and takes many tedious hours to confirm. For convenience^[각주:36], a dollar bill beats it hands down^[각주:37]. 

Not so dotty^[각주:38]

If bitcoin and the other cryptocurrencies^[각주:39] are unlike anything else, what are they? The best comparison^[각주:40] may be with the internet and the dotcom boom it created in the late 1990s. Like the internet, cryptocurrencies both embody innovation^[각주:41] and give rise to more of it^[각주:42]. They are experiments in themselves of how to maintain a public database (the "blockchain") without anybody in particular^[각주:43], a bank, say, being in charge. Georgia, for instance, is using the technology to secure^[각주:44] government records. And blockchains are platforms for further experiments. Take Ethereum, for example. It allows all kinds of projects, from video games to online markets, to raise funds^[각주:45] by issuing tokens - essentially private money that can be traded and used within these projects. Although such ICOs need to be handled with care^[각주:46], they could also generate intriguing^[각주:47] inventions. Fans hope that they will give rise to decentralized^[각주:48] upstarts^[각주:49] taking aim at^[각주:50] today's oligopolistic^[각주:51] technology giants, such as Amazon and Facebook.

This may seem like a dangerous way to generate innovation. Investors could lose their shirts^[각주:52]; a crash in^[각주:53] one asset class^[각주:54] could spread to others, creating wobbles in^[각주:55] the financial system. But in the case of cryptocurrencies are unaware of the risks. And since they are still a fairly self-contained^[각주:56] system, contagion^[각주:57] is unlikely^[각주:58].

If there is such a thing as a healthy bubble^[각주:59], this is it. To be sure, regulators should watch out that cryptocurrencies do not become even more of a conduit for^[각주:60] criminal activity, such as drug dealing. But they should think twice^[각주:61] before coming down hard^[각주:62], particularly on ICOs. Being too spiky^[각주:63] would not just prick a bubble^[각주:64], but also prevent a lot of the useful innovation that is likely to come about^[각주:65] at the same time^[각주:66].

1. frenzy ; [C , U] (pl. -ies) [주로 단수로] ~ (of sth) 광분, 광란 ;; 참고 feeding frenzy [본문으로]
2. tupli mania ; 튤립 파동 [본문으로]
3. froth ; 1. (액체가[를]) 거품이 생기다[생기게 하다] [본문으로]
4. bubble ; [v] 1. 거품이 일다, 보글보글 끓다 [본문으로]
5. all-time high ; [명사] 사상 최고치 [본문으로]
6. double ; 1. BECOME TWICE AS MUCH/MANY | 두 배[갑절]로 되다[만들다] [본문으로]
7. soar ; [v] 1. (가치・물가 등이) 급증[급등]하다[치솟다] [본문으로]
8. ascent ; 3. [U] (격식) 상승, 향상 ;; ascents this steep ; 명사 + this + 형용사 행태로 강조 [본문으로]
9. sustainable ; 2. 오랫동안 지속[유지] 가능한 [본문으로]
10. drive sth up/down ; (물가 등을) 빠르게 끌어올리다/끌어내리다 [본문으로]
11. speculative ; 3. (사업 행위가) 투기적인 [본문으로]
12. take on/assume a role ; 역할을 맡다, 역을 맡는다. [본문으로]
13. medium of exchange ; [the ~] 교환 매개물, 교환 수단, ((특히)) 화폐 [본문으로]
14. store of value ; 가치의 저장수단 [본문으로]
15. entirely ; [부사] 전적으로, 완전히, 전부 [본문으로]
16. hysteria ; 2. (못마땅함) 과잉 흥분[반응] [본문으로]
17. trajectory ; (pl. -ies) (전문 용어) 탄도, 궤적, 궤도 [본문으로]
18. retail investor ; [명사] 소매 투자자 [본문으로]
19. pile in/into ; 3. (구어) (…에) 난입[쇄도]하다 [본문으로]
20. move on to sth ; (새로운 일·주제로) 옮기다[넘어가다] [본문으로]
21. scammer ; [명사] [속어] 사기꾼; 난봉꾼 [본문으로]
22. real uses ; 흐름상 "실용성" 정도의 의미 [본문으로]
23. analogue ; (격식 또는 전문 용어) 유사체 [본문으로]
24. bear[have] (a) resemblance to ; …을 닮다 [본문으로]
25. mistrust ; [타동사][VN] 신뢰하지 않다, 불신하다 [본문으로]
26. bounce around ; [계획 따위]를 이리저리 생각하다, 궁리하다, 논의하다 [본문으로]
27. in[by] fits and starts ; 하다가 말다가[단속적으로] ;; not steadily; often starting and stopping [본문으로]
28. dizzying ; [형용사] 어지럽게 만드는, 어지러운, 아찔한 [본문으로]
29. aspire to ; …을 갈망하다. [본문으로]
30. lofty ; (loft・ier , lofti・est), (격식) 1. (건물・산 등이) (인상적이게) 아주 높은, 우뚝한 [본문으로]
31. a means of exchange ; 교환 수단. ;; means 자체가 하나의 단어로 인식되어서 관사 a가 붙는 다는것을 확인 [본문으로]
32. regulator ; [명사] (산업・상업 분야의) 규제[단속] 기관[담당자] [본문으로]
33. surge ; 3. (물가・수익 등이) 급등[급증]하다 [본문으로]
34. agree on ; ~에 동의하다 [본문으로]
35. transaction ; 1. [C] ~ (between A and B) 거래, 매매 [본문으로]
36. for convenience ; 편의상 [본문으로]
37. win (something)/beat somebody hands down (←beat hands down) ; win (something)/beat somebody very easily ;; hands down ; 노력하지 않고, 수월하게 [본문으로]
38. dotty ; 2. ~ about sb/sth ...을 사모하는[열렬히 좋아하는] [본문으로]
39. cryptocurrency ; A digital currency based on a cryptographic system [본문으로]
40. comparison ; 1. [U] ~ (with sb/sth) (~와) 비교함 [본문으로]
41. embody innovation ; 혁신을 구현하다, 이끌다, 만들어내다. [본문으로]
42. give rise to sth ; ~이 생기게 하다, 낳다; 일으키다. ;; 동의어 originate; cause. [본문으로]
43. in particular ; 특히[특별히] [본문으로]
44. secure ; 3. PROTECT FROM HARM | [타동사][VN] ~ sth (against sth) 안전하게 지키다[보호하다], 단단히 보안 장치를 하다 [본문으로]
45. raise funds ; 기금을 모으다, 자금을 조달하다 [본문으로]
46. be handled with care ; 조심이 다루어지다. [본문으로]
47. intriguing ; [형용사] (특이하거나 분명한 해답이 없어서) 아주 흥미로운 [본문으로]
48. decentralize ; [동사] (중앙 정부의 권력을) 분권화하다 [본문으로]
49. upstart ; [명사] (못마땅함) 건방진 놈, 벼락부자, 갑자기 힘을 얻은 신흥 세력 [본문으로]
50. take aim at ; ~을 (겨냥해서) 비판하다 [본문으로]
51. oligopolistic ; [형용사] (경제) 소수에 의해 시장이 독점되는, 과점의. [본문으로]
52. lose one's shirt ; 무일푼이 되다(=lose everything). [본문으로]
53. crash ; 3. IN FINANCE/BUSINESS | (가격・가치의) 폭락[붕괴]; (사업) 실패, 도산 [본문으로]
54. asset class ; 자산 [본문으로]
55. wobble ; 2. (마음・자신감의) 흔들림, 동요 [본문으로]
56. self-contained ; [형용사] 자족적인 [본문으로]
57. contagion ; 3. [C] (격식) (좋지 않은 감정이나 태도 등의 빠른) 전염[확산] [본문으로]
58. unlikely ; [형용사] ~ (to do sth) | ~ (that…) …할[일] 것 같지 않은, 있음직하지[있을 것 같지] 않은 [본문으로]
59. bubble ; 4. 거품, 버블(오래 가지 않을 호황) [본문으로]
60. conduit ; 1. (전문 용어) (액체나 기체를 통하게 하는) 도관, 전선관 2. (격식) (정보나 물자의) 전달자[전달 기관/국가] [본문으로]
61. think twice ; 재고하다, 숙고하다, ~에 대해 재차[신중히] 생각하다 [본문으로]
62. come down ; 무너져[떨어져] 내리다 [본문으로]
63. spiky ; 3. (英) (사람이) 성을 잘 내는, 잘 토라지는 [본문으로]
64. prick a[the] bubble[bladder] ; 비누방울을 퉁겨 터뜨리다.[비유적] 가면[탈]을 벗기다, 거짓[정체]을 폭로하다 [본문으로]
65. come about ; [동사] 생기다, 일어나다, 발생하다; 바뀌다. ;; 동의어 happen, take place; change. [본문으로]
66. at the same time ; ~와 동시에[함께] [본문으로]