NEW YORK (MainStreet) — Bitcoins, the cyber-currency has become the stuff of legend. It became a parlor game to wonder if it would replace dollars as the world's reserve currency. Meanwhile prices increased exponentially as speculators moved in to drive up prices--topping out at over $1,000.

That seems to be something of the past.

Bitcoin hit a brickwall December 18 when China announced that it was no longer accepting yuan deposits for them. The South China Morning Post reported that the People's Bank of China ordered third-party payment providers to stop using Bitcoin.

The Post said that Bitcoin prices went "into freefall" after Shanghai-based exchange BTC China yesterday blocked deposits. This initiated a global sell-off.

Bitcoin prices took a dive after the announcement. They hit as low as 2,503 yuan ($412) by early evening after beginning the trading day at 3,755 yuan ($618). The currency was selling for $1,250 a few weeks ago.

Chinese officials derided it. China's Secretary for Financial Services and the Treasury, Chan Ka-keung, was quoted in The Post telling lawmakers, "Bitcoin is not an electronic currency, nor is it an e-wallet...It is not qualified to become an electronic currency. Citizens should beware of it."

The Voice of America reported that Chinese officials are concerned that Bitcoin can be used to move money out of China. Bitcoins are fairly untraceable and transactions are largely anonymous.

Ergo, what China cannot control, it will not use.

Some claim that Bitcoin's increasing media profile led to its meteoric price rise. The former president of the Dutch Central Bank, Nout Wellink, was quoted by The Guardian comparing Bitcoin mania to the tulip mania that enveloped his country at one time. Prices for the flower rose exponentially and then fell the same way.

"This is worse than the tulip mania," he told The Guardian. "At least then you got a tulip [at the end], now you get nothing."

Does Bitcoin have a future? Ronald Rotunda, a professor at the Chapman University School of Law, says no.

He observed that while there are a limited number of bitcoins promised to be created, they are still vulnerable to hacking and counterfeiting. This is just one problem according to him.Generally, he does not see much future for them.

"I think bitcoins are a barbaric relic of a future that will not come to pass," said Rotunda.

--Written by Michael P. Tremoglie for MainStreet