Even after the recent fall in their prices, the total market value of all cryptocurrencies now exceeds $1.5 trillion, a staggering amount for virtual objects that are nothing more than computer code.
Bitcoin was created as a way to conduct transactions without the intervention of a trusted third party, such as a central bank or financial institution.
It takes about 10 minutes to validate most transactions using the cryptocurrency and the transaction fee has been at a median of about $20 this year.
Moreover, it has become clear that Bitcoin does not offer true anonymity.
Bitcoin investors seem to be relying on the greater fool theory — all you need to profit from an investment is to find someone willing to buy the asset at an even higher price.
Securities that enable speculation on Bitcoin prices are already regulated, but there is not much more the government can or ought to do.
By some estimates, the Bitcoin network consumes as much energy as entire countries like Argentina and Norway, not to mention the mountains of electronic waste from specialized machines used for such mining operations that burn out rapidly.
Bitcoin has shown how programs running on networks of computers can be harnessed to securely conduct payments, within and between countries, without relying on avaricious financial institutions that charge high fees.
But, as with its other ostensibly high-minded initiatives, Facebook can hardly be trusted to put the public’s welfare above its own.
Variants of Bitcoin’s technology are also making many financial products and services available to the masses at low cost, directly connecting savers and borrowers.
Unequal financial literacy and digital access might result in sophisticated investors garnering the benefits while the less well off, dazzled by new technologies, take on risks they do not fully comprehend.
Eswar Prasad is a professor at Cornell University and a senior fellow at the Brookings Institution.