Bubble Lights have been around for quite a while now, about 60 years or so and they are quite simple.
A light bulb in the base illuminates the bubble tube and also heats the liquid inside, causing it to boil.
As the liguid boils, gas bubbles rise until reaching the cooler region at the top and condensing back again into a liquid.
There were a few variations in design, for example, some bubble tubes included a glass slug while others had oil in the tubes.
The biggest problem with bubble lights is that it is very difficult to replace the light bulb inside when it eventually burns out,
because most of them are cemented together. The bubble tubes may be reused as long as they are undamaged.

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Here is a NOMA 18 light Bubble light tree, model 503, circa late 1940s.I got it for $3.00 at a yard sale in spring of 2002.It's proof that the best stuff is right in your backyard. The previous owner replaced the bubble lights with C-6 bulbs as they burned out, so I had to replace them with reproduction Bubble Lights from Lions Den Antiques.
The above Bubble light tree, shown lighted.
Here is a mini movie of a NOMA C6 biscuit bubble light. It's a 23 second loop, so you can watch it as long as you want to. The video file is 1.8 MB, so you'll need broadband, or LOTS of patience. Estimated download time on : 56K dial up - 12 minutes. On 768K DSL - 25 seconds, on 3.0 M DSL - 5 seconds.  Dial-up users click here. (800 KB, 9 second loop)
Going forward to the mid 1970s is this Bubble light candelabra, Cat no 379. It's from A.C.L.A, the successor to Paramount.
The above candelabra, shown lighted.
G.E. Merry Midget 10 bubble light set, made in Korea. The Kmart tag on this set shows a price of $6.57 and also shows a date code of 1084, or October 1984. Since this set dates to the 1980s it was originally packaged in a Styrofoam tray, but that is now lost to the ages.
Here's an exploded view of one of the merry midget bubble lights. Check out the unusual flat topped miniature bulb used in the bubble light. Also you can see that G.E. continued to use the bi pin base on some sets into the 1980s.
Going forward again, to the present is this miniature 10 light bubble light set by Sterling. The bubble tubes are much narrower because the 12 Volt miniature bulbs used give off less heat. For example, 110 volt C-7 bulbs are 5 to 7 watts, 15 volt C-6 bulbs are 3 watts and the 12 Volt miniature bulbs used here are about 1 watt. Also note the different design as the bulbs on this set are placed horizontally.