Bitcoins: The future of money, or a bubble ready to burst?

Bitcoins have been around since 2009, but have gained widespread attention only in the past few weeks. Worth only a couple dollars a pop a year ago, the Bitcoin exchange rate has seen some dramatic ups and downs since the end of March.

Here’s how it works: Anybody can get into the game by downloading a program onto their computer and using a number of online exchanges to convert their dollars into bitcoins. After that, the currency can be transferred anonymously and directly between two users anywhere in the world.

Some observers say a payment network like Bitcoin could one day rival a company like PayPal or Western Union. Even the Winklevoss twins, of “The Social Network” fame, have a multimillion-dollar investment in it.

But bitcoins aren’t likely to be a good investment for the average person for the foreseeable future.

“I see this as the first generation of something that may proliferate,” said Judson Gee, managing partner of JHG Financial Advisors in Charlotte, N.C. “Right now it’s mostly just a speculative investment.”

University of Chicago law professor Eric Posner, writing in Slate this week, was more blunt, calling it a “fantasy” that “resembles a Ponzi scheme.”

The currency traded as high as $266 on Wednesday before crashing. The most popular exchange put a halt on trading for hours, and prices fell below $55. On Friday morning, bitcoins were trading for about $78.