All You Need to Know About Bitcoin’s Rise, From $0.01 to $15,000

The initial price of bitcoin, set in 2010, was less than 1 cent. Now it’s crossed $16,000. Once seen as the province of nerds, libertarians and drug dealers, bitcoin today is drawing millions of dollars from hedge funds. The recent price surge may be a bubble. Or it could be a belated recognition by the broader financial community that so-called cryptocurrencies -- digital forms of money -- are going mainstream. It might be time to nail down what a bitcoin is, and why its price has been going through the roof.

It’s a form of money that’s remarkable for what it’s not: It’s not currency you can hold in your hand. It’s not recognized by most Main Street stores. It’s not issued or backed by a national government. At their core, bitcoin and its imitators are sets of software protocols for generating digital tokens and for tracking transactions in a way that makes it hard to counterfeit or re-use tokens. A bitcoin has value only to the extent that its users agree that it does.