In my post yesterday I mentioned that I had noticed that the price increase in Bitcoins mainly takes place during daytime in China. That could imply that exploding exchange rate is mainly driven by Chinese demand. That theory was confirmed by a table from Bitcoinity that Justin Tsang sent me on Twitter today. The picture shows that over the past 3 days the largest Bitcoin exchange in the world is not Mt. Gox anymore, but BTC China!
Although over the past 24 hours Mt. Gox is bigger than BTC China again, I think this is quite significant for the Bitcoin economy. China is not only taking over the real world, but now also the virtual one. This is something fairly recent, because before I left China earlier this year nobody really talked about Bitcoin yet. Bitcoin is not mainstream yet, but with Baidu now accepting Bitcoin and BTC China being the largest Bitcoin exchange in the world, this is changing very fast!
China took over virtual currency in ~2004. wow gold, diablo 3 gold etc., are all still larger than the total amount of circulating bitcoin. This gets overlooked a bit, nowadays. Mostly because those currencies are traded within China and in Chinese. Bitcoin is traded worldwide, and to a large degree in clearly readable English for everyone.
Hey Marc, Bitcoin is great but I feel like you are covering its potential more than its pitfalls 🙂 For example, the market price is largely dependent on its users’ trust in Bitcoin exchanges. What do you think about the fact that many people are having problems withdrawing money from the largest exchange, Mt. Gox (see https://bitcointalk.org/index.php?topic=179586.0)? There are even rumours of insolvency. If any significant news portal is to pick this up that could have a substantial downwards effect on the market price. Moreover, it’s interesting to see huge arbitrage opportunities between different bitcoin exchanges — which makes me wonder why they are not being exploited. Do you have any insights on this?
Tom, I am an entrepreneur and therefore mainly focus on the potential, not on the risks (although I do take those into account). Mt. Gox has been having issues for months, that’s one reason why its prices are higher than the rest of the network (more risk means that you want to get more money). People using Bitcoin are aware of that and that’s why there are so many new exchanges coming up.
I don’t think Mt. Gox problems are news, media wrote about it many times already. The people who only get their news from news portals (or worse, traditional media), probably don’t use Bitcoin yet anyway. Once they start using it the exchange networks will look very different from now.