People keep calling crypto âtulips.â Itâs a fun insult, but it explains almost nothing about how infrastructure technologies spread. This article shows why Britainâs Railway Mania (1840s) is a sharper model for blockchain: wild funding, brutal shakeouts, and systems that keep running after the hype collapses.
Quick highlights
- Tulips are mostly a price story; railways are a buildout story that kept operating through the crash.
- Railway Mania peaked in 1846: 263 Acts of Parliament, ~9,500 miles proposed.
- A practical test for âbubble vs infrastructureâ: after the price drop, does the system still work and keep improving?
- CBDCs are being explored widely (Atlantic Council tracks 137 countries & currency unions, 98% of global GDP). Thatâs not a crypto endorsement, just a signal that digital money rails are a serious global theme.
Why the tulip comparison fails (even if the meme is eternal)
Tulip mania is often presented as: everyone went mad, everything collapsed, society learned a lesson. In reality, the dramatic version is contested, and many historians argue the broader Dutch economy wasnât âdestroyedâ the way popular retellings imply.
More importantly, tulips didnât create a durable network that kept producing value after prices fell. They were fashionable goods traded via contracts, and when the market cooled in February 1637, there wasnât a âtulip infrastructure layerâ left behind.
| Blockchain is closer to a network technology than a collectible fad. That difference matters. |
What Railway Mania got right (and what it punished)
In the 1840s, Britain overfunded railways. In 1846, Parliament passed 263 Acts for new railway companies and proposed routes totaling about 9,500 miles. A large share of that authorized buildout wasnât built, and many companies collapsed or were absorbed.
If you were holding railway shares at the peak, your experience could be ugly. But the key point is structural:
The market for railway shares and the railway network were not the same thing.
Trains still ran. Logistics improved. The system kept expanding and standardizing. Society got a transportation and coordination upgrade even as many early backers got a painful lesson in timing.
If you want a modern translation: prices can be wrong about the timeline while the underlying system keeps getting more useful.
The âutility persistence testâ
When people argue âbubble,â they often mean âprices went up and then down.â Thatâs true for bubbles, and also true for infrastructure buildouts financed by speculation.
A more useful test:
After a major price drawdown, does the system keep functioning and keep improving?
- Tulips: the market ended; nothing kept running except horticulture.
- Railways: the network kept operating, consolidating, and expanding.
- Blockchains: networks keep producing blocks, confirming transfers, and running apps through downturns.
The painful middle: working core, awkward user experience
Railways had an awkward adolescence: track existed, but coordination was messy: operators, schedules, ticketing, and freight systems needed years to become coherent.
Blockchains often sit in a similar middle phase. The base layer can work reliably while users still face friction: confusing token representations, unclear failures, and UX that assumes you enjoy reading explorers at midnight.
That gap between a functional core and immature usability is exactly where lazy analogies thrive.
Five patterns where blockchains rhyme with railways
1. Overbuilding leads to consolidation, not instant death
Railway Mania produced redundant routes and too many companies. The shakeout reduced fragmentation and pushed standardization.
Crypto ecosystems behave similarly: many projects compete, most fade, and the reusable parts survive as standards, tooling, and safer operational habits.
2. Speculative capital accelerates buildout
Speculation can mobilize funding for high-risk infrastructure faster than cautious capital ever will.
Railways did it. Blockchains do it too, often imperfectly, but at high speed.
3. Early users subsidize later usability
Early railway investors and passengers paid for a network that later generations used as normal life. Early crypto users pay in friction: confusing UX, mistakes, and learning curve. Later users enjoy smooth interactions.
Thatâs the pattern. Nobody likes it while theyâre living it.
4. Network effects reward compatibility over elegance
Railways converged on interoperability. Blockchains converge on composability: where apps connect cleanly and users donât need five separate mental models.
5. Utility looks gradual until it looks obvious
Railways didnât transform Britain in a week. They became unavoidable once enough routes, routines, and businesses formed around them.
Networks tend to feel inevitable only after years of compounding.
A quick âbubble vs infrastructureâ checklist
| Question | Tulip-style | Railway-style |
| Does the system still run after a crash? | No system to run | Yes, it keeps operating |
| Is there compounding utility from adoption? | Limited | Yes (networks get more useful) |
| Do failures leave reusable components? | Not much | Yes (routes/standards/tooling) |
| Does UX get less niche over time? | No | Typically yes |
Wrapping up
Tulips are a neat metaphor for price euphoria. Railways explain infrastructure: overfunded buildout, consolidation, and a system that becomes more valuable long after the mania ends.
