Back to Basics after Bitcoin’s Wild Rise

The alternate currency known as Bitcoin has had a wild week, and its dramatic rise in value has meant that many Americans are hearing and learning about it for the first time.

The increase has been so dramatic, however, it has also caused many observers to express skepticism about the sustainability of these gains, generating comparisons, for example, to the legendary price bubble for Dutch tulip bulbs in the 17^th Century. As the Los Angeles Times colunist and cryptocurrency skeptic Michael Hiltzik wrote today, “When Grandma and Grandpa join the frenzy, you know bitcoin is turning into a bubble.”

Before wading into the famously contentious debate about the future of Bitcoin, however, it would help to briefly review the conceptual basics. In that spirit, it’s a great opportunity to revisit the excellent short Learn Liberty video with Coin Center Executive Director Jerry Brito (above).

Also, to read more about how the federal government (in particular the Internal Revenue Service) is responding to the rise of Bitcoin, see this blog post by CEI Vice President Jim Harper and this post by Christian Langalis.