Bitcoin has rebounded to $2600 this morning (after touching $2200 late yesterday, and $2760 highs yesterday) as Korean prices and US prices are converging (Korbit still trading at around $3200)

Bitcoin is trading around $2600 on US exchanges...

And $3200 on Korea's Korbit...

As Alhambra Investments' Jeffrey Snider details, Bitcoins are a remarkable bit of innovative technology. When they were first introduced quietly at the end of October 2008, nobody noticed it or the fitting timing. The design paper for the cryptocurrency was published anonymously at the very same moment the dominant global currency, the eurodollar, was undergoing its severe reckoning. The latter is in many ways like the former, since the eurodollar is not a thing just like Bitcoins. In many respects, it, too, is a cryptocurrency and as such confounds a great deal of "expert" analysis.

The price of a Bitcoin, meaning its exchange rate, has exploded more recently, though not for the first time. If we reckon it as a currency, then the other side implication of this price action is that the dollar has fallen in value relative to it. That it has survived and in some places thrived after eight and a half years is meaningful, but what we don't know is whether it is that because of the potential for Bitcoins or because of the constant malfunction of the "dollar."

There is more than a fair hint of Gresham's Law at work. For those unfamiliar, Gresham's Law is a stated maxim on currency, thought up in 1858 by Scottish banker Henry Dunning Macleod and named for 16th century English financier Sir Thomas Gresham. Ironically, I suppose, Macleod's thoughts on 19th economics mirror what would become of this idea.

I can hardly express the disappointment I felt at reading them…for the purpose of describing the actual principles and mechanisms of commerce they were absolutely worthless. They were merely a chaos of confusion and contradictions…In fact, they were in no sense a science, but the butchery of a science. I saw that the greatest opportunity that had come to any man since Galileo had come to me, and I then determined to devote myself to the construction of a real science of Economics on the model of the already established physical sciences.