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There's a currency out there that doesn't exist 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 currency without a central bank or administration.
No main servers are needed, all personal computers used in trasactions become part of the network.
Bitcoin is yielded when computers solve code-breaking problems... a process called 'mining,'
but when that seems too difficult, you can buy 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 bitcoin in the blink of an eye -- just by scanning
the QR code with a smartphone application."
The app converts the purchase value from won to 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 accepting it at the start of the month... but the owner
is not considering cashing out his new bitcoins any time soon.
"I think it will continue to rise, as more people 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 to 21-million units... and nearly half that amount
has been issued so far.... this means demand should far exceed supply.
One bitcoin is worth around one thousand U.S. dollars - up 70-fold from last year... but
wild fluctuations have cast a shadow over bitcoin's stability as a currency.
"Traditional currencies can be issued and are 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 its instability as a currency and the lack of
intervention with its value will limit its usefulness in a wider sense."
While the Korean government has yet to announce its stance, central bank governor Kim Choong-soo
said Thursday that it is questionable whether Bitcoin could develop into non-legal tender
due to its high volatility and limited acceptability. Song Ji-sun, Arirang News