Bitcoins: Boom & Bust

The recent bursting of the Bitcoin bubble revealed the lack of depth and liquidity in what is still a tiny market. But it would be wrong to dismiss the virtual currency as a mere curiosity…

Fair value is not the same as market price, John Kay, 17 Apr 2013
Mining Digital Gold, The Economist, 13 Apr 2013
Never Mind Facebook; Winklevoss Twins Rule in Digital Money, NY Times Dealbook, 11 Apr 2013
Bitcoin Great for Narco-Dollar Traffickers, CNBC, 5 Apr 2013
Monetarists Anonymous, The Economist, 29 Sep 2012

Bitcoins have been talked up before…
The Economist, 16 Jun 2011

“Milton Friedman famously called for the abolition of the Federal Reserve, which he thought ought to be replaced by an automated system that would increase the money supply at a predetermined rate and so keep a lid on inflation. A virtual version of this now exists….This absence of a central monetary authority to control the money supply is what many find exciting about Bitcoins. Quantitative easing is not possible. Coins are created at a constant average rate to reward users who give up some of their computing power to track and validate transactions that are made with the currency..”

Only to slump a few months later…
The Rise and Fall of Bitcoin, Wired Magazine, 23 Nov 2011