Virtual currency a bit overpriced for the real world

Real risk

In China, when bitcoins are actually used to buy something, it's usually in coffee shops, pizza restaurants, digital appliance stores and other outlets selling low-priced products or services.

But Shenyu used bitcoins to buy a laptop from an e-commerce platform in the United States. The price was 20 bitcoins, worth 6,000 yuan at the time of payment.

"The value surge of the bitcoin has exceeded the expectations of most people. Who could have imagined that the currency could reach such a high value, while back in 2011, one bitcoin was worth less than a dollar," he said.

The bright side, he said, is the increase in value will enhance the bitcoin's acceptance among manufacturers, traders and consumers, even though its legitimacy hasn't verified by the government.

There are rising calls for governments to step up supervision of digital currencies to preclude illegal activities. These currencies, after all, operate totally outside the control of any government or central bank.

Chen Sheng, vice-president of the China Real Estate Data Academy, said a property price denominated in bitcoins is so far just an example of successful marketing. But he said that eventually, a real deal will be sealed using bitcoins.

"Only a real deal can prove the feasibility of bitcoin payments. There will be quite a few questions surrounding such a deal, for example, government recognition of it," said Chen.

Chen Ye, a Shanghai-based wealth manager at Industrial Bank Co Ltd, said it is risky to pay for an apartment with a "nonstandard" currency.

"For homebuyers, the risk lies in obtaining the invoice and receipt. As far as I know, there is no authorized receipt in China recognizing payment in bitcoins.

"For sellers, calculating and declaring income and taxes based on bitcoin payments may be something they need to figure out before they accept such payments," said Chen.