The question of how high bitcoin can fly looms large after the digital currency shot past 3,000 US dollars each for the first time ever. But Monday served as a reminder that volatility may be the rule, not the exception, as bulls and bears lock horns about the prospects for the rapidly ascending cryptocurrency.

Henry Meier, Los Angeles Business Journal said, “Bitcoin is a cryptocurrency, created by solving mathematical equations. You can use it to pay for things. Some vendors are now taking it and it is a rapidly growing form of currency.”

You may have heard of it because of sites like Silk Road. Bitcoin was used by those navigating the dark web, using it to pay for illegal goods like drugs, counterfeit money, and hacked user account details. It’s complex, and untraceable, unlike a credit card.

There’s no centralized bank or repository for Bitcoin. So nobody controls Bitcoin. Instead it is a diversified system. “There is a limited number of Bitcoins that can be made and that’s 21 million and once you reach that threshold, no more can be printed. However, you can sell and buy fractions of bitcoins, so I think the smallest amount is a millionth of a bitcoin, so there is some flexibility there," Meier said.

Bitcoin’s gone from 750 US dollars per Bitcoin at the start of the year to nearly 3,000 US dollars, equal to 19,000 yuan in early June. But it’s volatile and it can crash just as quickly.

“There’s a few reasons. Speculation that this is going to be the currency of the future, there are also different type of cryptocurrencies being developed. And those are usually paid for in Bitcoin. You usually have to pay to buy those in Bitcoin, so more and more people are using Bitcoin to speculate on other types of cryptocurrencies and then there is this artificial threshold. Once you get to 21 million bitcoins, there is no more. So there’s a finite cap on how much Bitcoin is out there,” Meier explained.