double in size.[26] In one press release, WorldCom had claimed that
user demand was growing by 10 per cent every week. For this growth
to be sustainable, it would mean that within a year or so, everyone in
the world would have had to be active online for twenty-four hours a
day.[27] There were simply not enough susceptible people out there.
Arguably the greatest bubble of recent years has been Bitcoin,
which uses a shared public transaction record with strong encryption
to create a decentralised digital currency. Or as comedian John Oliver
described it: ‘everything you don’t understand about money combined
with everything you don’t understand about computers.’[28] The price
of one Bitcoin climbed to almost $20,000 in December 2017, before
dropping to less than a fifth of this value a year later.[29] It was the
latest in a series of mini-bubbles; Bitcoin prices had risen and
crashed several times since the currency emerged in 2009. (Prices
would start to rise again in mid-2019.)
Each Bitcoin bubble involved a larger group of susceptible people,
like an outbreak gradually making its way from a village into a town
and finally into a city. At first, a small group of early investors got
involved; they understood the Bitcoin technology and believed in its
underlying value. Then a wider range of investors joined in, bringing
more money and higher prices. Finally, Bitcoin hit the mass-market,
with coverage on the front pages of newspapers and adverts on
public transport. The delay between each of the historical Bitcoin
peaks suggests that the idea didn’t spread very efficiently between
these different groups. If susceptible populations are strongly
connected, an epidemic will generally peak around the same time,
rather than as a series of smaller outbreaks.
According to Jean-Paul Rodrigue, there is a dramatic shift during
the main growth phase of a bubble. The amount of money available
increases, while the average knowledge base decreases. ‘The
market gradually becomes more exuberant as “paper fortunes” are
made from regular “investors” and greed sets in,’ he suggested.[30]
Economist Charles Kindleberger, who wrote the landmark book
Manias, Panics, and Crashes in 1978, along with Robert Aliber,
emphasised the role of social contagion during this phase of a
bubble: ‘There is nothing so disturbing to one’s well being and