As Bitcoin gets more and more media attention, use of the word “bubble” is multiplying by the day. The “experts on everything” are calling cryptocurrencies a new tulip mania and publicly warning of the crypto world’s dangers and horrors. But are all bubbles really so pointless? And do they all leave loss and misery behind? Aren’t there cases of bubbles which were actually useful for the world?

History can help answer these questions. And while a number of types of bubbles exist, to keep it simple we can divide them into two groups: speculative and non-speculative. The infamous tulip bubble was in fact driven by greed and price speculation, bringing no real value for industry, infrastructure or wider society. That’s why it’s such an easy negative example (even if it did bring us the Dutch auction and some other still valid insights). But what about non-speculative bubbles?

Most non-speculative bubbles in history, like Britain’s railway bubble in the 19th century or the more recent dot-com crash at the turn of the millennium, had their basis in a transformational technology that seriously disrupted the market. When a new technology is introduced, a whole array of business opportunities tends to open up around it. The market expands and discovers a totally new, empty space that needs to be filled. Energy flows to the new space and spreads out, rewarding the first ones in. It’s basic physics, since “nature abhors a vacuum,” as even Aristotle noted.

As the ecosystem continues to grow, eventually a point is reached where the growth of suppliers starts to exceed the growth of demand. Market sentiment changes. And soon we’re in a situation that resembles trying to fill a cup using a bucket of water: a lot of the liquid misses the cup and splashes about, and much that was already inside the cup ends up getting forced out. Unfortunately, those who didn’t get in at the right time, or were floating on top, get hurt.

In short, bubbles happen because everyone wants a piece of the pie, but the pie has only so many slices. That’s what happened with the gold rush, colonization and in a multitude of other cases.

What’s important is that the technology in question, with its use cases, infrastructure and related knowledge, stay with the market. That’s what facilitates progress. The railway bubble left us with railway infrastructure which we still use even now. The dot-com bubble put internet cables all over and brought us the DNS network we rely on every day. And some of the biggest US cities were only established because of the gold rush.

To conclude, the Blockchain bubble does have speculative marks, but at the same time it’s based on innovation, technology and progress. That’s why I am almost 120% sure that, whatever happens, it will leave us with new extremely useful technology. And if we manage to proceed intelligently and carefully, we might even master the bubble and keep it from bursting.

In any case, let’s not be afraid of what is new. We should try it out, explore it, experiment… and advance toward the future with our heads held high. Even if we have to live through a bubble or two. Since to me, bubbles seems to be more of a natural pattern than they are a market failure.