There's a currency out there that doesn'texist in any physical sense but is worth about the same as an ounce of pure gold.
Bitcoin, a virtual currency invented in 2009.
is now the talk of the markets everywhere.
But can it ever become a legitimate currency? Song Ji-sun reports.
It's a virtual currencywithout a central bank or administration.
No main servers are needed, all personal computersused in trasactions become part of the network.
Bitcoin is yielded when computers solve code-breakingproblems.
a process called 'mining,' but when that seems too difficult, you canbuy them online.
You can now trade bitcoin in the Korean won,too.
through Korbit — Korea's bitcoin exchange market.
And buy goods with the virtual currency.
"At this bakery, you can pay with bitcoinin the blink of an eye — just by scanning the QR code with a smartphone application.
" The app converts the purchase value from wonto bitcoin — and the amount is sent to the seller's electronic coin wallet.
An average of one customer per day has paid with bitcoin since his shop started acceptingit at the start of the month.
but the owner is not considering cashing out his new bitcoinsany time soon.
"I think it will continue to rise, as morepeople get to know it and become interested in it.
I'm thinking of keeping all bitcoins paid by my customers.
" Many others agree, as bitcoin is limited to21-million units.
and nearly half that amount has been issued so far.
this means demandshould far exceed supply.
One bitcoin is worth around one thousand U.
Dollars – up 70-fold from last year.
but wild fluctuations have cast a shadow overbitcoin's stability as a currency.
"Traditional currencies can be issued andare bound to inflation — but bitcoin is bound to deflation as the money supply is limited.
There's no doubt that bitcoin is the most successful virtual currency to date, but itsinstability as a currency and the lack of intervention with its value will limit itsusefulness in a wider sense.
" While the Korean government has yet to announceits stance, central bank governor Kim Choong-soo said Thursday that it is questionable whetherBitcoin could develop into non-legal tender due to its high volatility and limited acceptability.
Song Ji-sun, Arirang News.