Hong Kong-based entrepreneur planning Asia's first bitcoin conference
As digital currency hits record high, HK-based entrepreneur is organising the first Asian conference dedicated to the virtual system
Angela Meng and Danny Lee
Hong Kong-based entrepreneur Eddy Travia will host the first Asian conference on bitcoin next week, in Singapore, with the digital currency hitting a record price of US$315 yesterday.
The currency was US$123 on October 3 and has since risen nearly three-fold.
"So many things have happened with it, it's happened so fast, so we need to show people what is going on," Travia said.
Bitcoin - which can be used to pay for goods and services on the internet - was created in 2008 by anonymous hackers using the pseudonym Satoshi Nakamoto.
It went operational in 2009 and has skyrocketed in value on bitcoin exchanges since. The digital currency is used to buy everything from coffee to cocaine. Speculators, hobbyists, traders, and digital currency adopters looking for a decentralised, alternative store of wealth have invested in it.
Much of bitcoin's recent rise has been attributed to interest on the mainland. CCTV broadcast a documentary about bitcoin in May, and Jiasule, the online security arm of internet giant Baidu, started accepting bitcoin for payment last month. Joining them is an array of retailers on the mainland and in Hong Kong.
"We started accepting bitcoin a year ago" said Adam Lee, manager of a health and beauty business in Hong Kong. "With a phone, you can just show them a code and receive the bitcoin."
He is, however, still waiting for his first customer to pay with the digital currency.
Bobby Lee, founder and CEO of BTC China, the largest bitcoin exchange on the mainland, said most mainlanders were not using bitcoins to pay for things but rather buying them as an investment.
Germany has declared bitcoin a "unit of account" and the US has recognised it as a "virtual currency". Still, for legal purposes, bitcoin is not backed by a major currency, leading some to the conclusion that all the talk about the "digital asset" has led to a bubble.
Zennon Kapron, managing director of mainland-based financial research firm Kapronasia, said that as acceptance of bitcoin grew, an appropriate level of value would be realised.
"The rise in the past week is based largely on speculation and not the drive towards a proper value of the currency … it still has a ways to go before we hit a proper valuation."
A Hong Kong Monetary Authority spokeswoman said: "The liquidity and value of transactions in the secondary market is extremely volatile and unpredictable, with no guarantee in relation to the amount of goods and services that can be exchanged."
Beijing has not established a stance on bitcoin. Bobby Lee said: "We feel this is an area that eventually will get regulated, and we look forward to working with the government to make that happen."
There is concern about the volatility and stability of bitcoin.
Japan-based Mt Gox, the world's largest bitcoin exchange, experienced a massive security breach in 2011 that caused the price of a bitcoin to drop to one US cent. More recently, US authorities seized more than 144,000 bitcoins worth some US$28 million from online drug marketplace Silk Road.
"Let's cross our fingers that there's not a big scandal where a big exchange closes down and wipes out the bitcoins of many people," Travia said.