Understanding Bitcoin: Money, Asset, or Bubble?

Abstract

The cryptocurrency Bitcoin has been prominently featured in the news recently. Its ascension in value has been nothing short of extraordinary. This article briefly explains what Bitcoin is and how it works. The more challenging question is what Bitcoin—this cryptographic breakthrough—really is: currency, like the U.S. dollar, an asset, more like gold, or something else? Further, can this astonishing run-up in value continue or will Bitcoin be added to the long list of so-called "asset bubbles" that eventually burst, causing pain for those that own them?