Value of virtual currency bitcoin skyrockets

The bitcoin bulls went on the charge last week, sending the price for one unit of the virtual currency towards the US$1,000 landmark after American lawmakers showed a willingness to lend legitimacy to digital cash.

A US Senate hearing put bitcoin firmly in the mainstream and triggered fresh support from countries that tend to fall in line with America's financial regulatory regime.

In the past 30 days, the price of a single bitcoin has quadrupled, with Chinese speculators among the most enthusiastic buyers.

The question now is whether bitcoin can fulfil the goal it was conceived for: a fast, cheap online payment method.

The fear for many is that the rapid growth and extreme price volatility that has put bitcoin in the headlines could make it completely unsuited to its original purpose.

Bitcoin had its beginnings in 2009, when an individual or group going under the pseudonym Satoshi Nakamoto published a paper laying out the idea.

The concept is simple: bitcoin is a way of sending money electronically in an instant at low cost. It eliminates the need to funnel money through third parties such as banks or card payment processors. And it is not regulated by a central bank.