This week, I walked into a house on a ritzy estate that the locals call, “Billionaire’s row.” It’s located in Dubai, a wealthy city in the United Arab Emirates. Polo fields surround the home. Most of the residents have housekeepers, nannies and personal assistants.

My hosts hired a British nanny for their children. I’ll call the nanny, Suzy. When Suzy learned I was an investment columnist, she looked at me with wonder. No, she wasn’t dazzled by my job. Nor was she attracted to my sparkling wit or, uhum, my dashing good looks. Instead, she only had eyes for bitcoin. “Should I invest?” she asked.

Over the past 13 months, I’ve given more than 90 investment talks in 13 different countries. No matter where I go, people want to talk about bitcoin. Even the taxi driver that brought me to Billionaire’s row wanted to invest. Earlier that week, my friend’s retired mother had sent me an urgent text. She also wanted a piece of the bitcoin action.

Suzy and I sat at the kitchen table and drank some mint tea. I described how bitcoin works. “It’s a digital currency,” I said. “It allows people to make online purchases. Much like a US dollar, a British pound or a euro, it’s a medium of exchange.”

“But why has it risen so much in value?” she asked. Suzy was right. Bitcoin has risen plenty. It surged 1,520 percent last year. In January 2017, one Bitcoin was worth $958. By the end of the year, it was priced at $15,527.

“Bitcoin has risen a lot based on supply and demand,” I said. “People buy it because they expect it to rise in price. There have been many more buyers than sellers, so the price has risen.”

Warren Buffett, however, calls bitcoin a mirage. He says, "The idea that it [bitcoin] has some huge intrinsic value is just a joke in my view.” In a January 10th interview with CNBC he said, "In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending."

A life-altering investment captures the imagination of every generation. It seduces us into paying an ever-increasing price in hopes of easy money. I remember my friend’s father talking about the “dotcom bubble”, long before it burst. “Stocks can’t justify rising hundreds or thousands of percentage points a year,” he said, “unless those companies are increasing their business earnings as fast as those stock prices are rising.”

My friends and I ignored him. We figured he didn’t understand. Internet companies, after all, were going to change the world. And they did. But in the late 1990s, many of them didn’t make profits. Their prices soared on the backs of hope. But when their business earnings didn’t rise in line with the price of those stocks, the floors caved in. Plenty of those stocks still haven’t recovered. Many are now in graves. May they rest in peace.

Cryptocurrencies might be the future. But they don’t make business-earnings. As Warren Buffett says, they’re just electronic money orders. Suzy looked a bit confused, so I gave another example.

Imagine if a drug company created a cure for cancer. This would be a far bigger breakthrough than any cryptocurrency. Let’s call the drug company, Hope. If it traded on the stock market, its price would soar. It might gain 10,000 percent in a single year. The following year, it might gain 20,000 percent. People would want to buy it. Crowds would rush in.

But what if the business couldn’t create after-tax profits? Sales might be great. But if the income from sales didn’t exceed corporate expenses, the business wouldn’t make money. And if this were to continue, the stock would eventually crash.

It wouldn’t, however, happen right away. The stock could rise for a decade without the business making profits. But economic principles are a lot like gravity. Eventually, they win. That stock would crash hard and investors would lose a lot of money.

That’s an economic law. But memories are short. Almost every generation gets high on the next big thing. They say, “This time it’s different.” They buy something that soars in price–mostly because it has soared in price. They believe they’ve made a smart decision if that price keeps rising.

History gives us lessons if we’re prepared to listen. Charles Mackay describes our natural weakness in his book, Extraordinary Popular Delusions and the Madness of Crowds. He wrote about the South Sea Company bubble of 1711–1720 and the Mississippi Company bubble of 1719–1720. He also wrote about the Dutch tulip mania of the early seventeenth century. During this bubble, some tulip bulbs were priced as high as houses. This classic text was first published in 1841. But its principles are current. Each generation proves the madness of crowds continues to be present.

Bitcoin investors, years after they get burned, will try to teach this to their children. But their kids won’t likely listen. Many will say, “Mom and Dad, you don’t understand. This new technology isn’t like Bitcoin. It will change the world. And it’s price has increased a lot, so I know that I’m right.”

Former Bitcoin investors will just drop their heads and sigh. Timeless economic principles bring chickens home to roost.

Andrew Hallam is a Digital Nomad. He’s the author of the bestseller, Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas