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Global Tracking—Who Is Buying Bitcoin

Bitcoin, the popular Internet currency, is on the map in more than one way.

You could watch it trading across the globe, and probably draw some intriguing conclusions about where the popular fast-moving digital money is flowing to. For the last week, a site called fiatleak has provided a Bitcoin map, which compiles information from all major online bitcoin exchanges such as BTC-e and Mt. Gox and allows you to watch what country’s residents are purchasing bitcoins in real time.

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 A screen shot of Fiatleak.com, which tracks the movement of bitcoin, taken on Wednesday.

There are also some other sites that list major bitcoin exchanges, however, they don’t show it as a global phenomenon as vividly like fiatleak.com.

We can observe a striking thing from this bitcoin map: Bitcoin is increasingly a Chinese craze. Even at the height of the European and American trading days, when it is 3 a.m. in China, Chinese transactions far outstrip activity in euros. The U.S dollar transactions are still more popular than Chinese at the time, with around twice as many transactions. China was rarely involved into bitcoin one year ago, however. The Chinese presence could also strengthen when it’s daytime in China and night in the U.S.

 “You could watch China play Ping-Pong on this with the U.S.,” said Andrew Hodel, the owner of the site. “You see the psychology, as the bitcoin goes over a threshold number in dollars or yuan.”

Other countries such as Britain or Japan, barely have players figure into the exchanges. Russians don’t apparently trade much, however, that participation is masked by their activities in the euro-based market. This map also demonstrates the value of bitcoin in the local currency, based on the most recent trade.

By Monday evening, the value of a bitcoin unit reached and soared past $700 on some exchanges. The total outstanding pool of bitcoin – which is created by a network of users who solve complicated mathematical problems – is now worth more than $7 billion.

Mr. Hodel is an American living in Uruguay who holds a small Internet service business called Cobianet that is operated in Colorado and Texas. He notes that he owns only around 10 bitcoins, but is a fascinated with the currency.

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Andrew Hodel, the creator of fiatleak.com.

 “I’m surprised that the U.S. is not as influential as I thought,” he said. “Bitcoin is a currency, a commodity as well as an accountancy build by developers that is totally decentralized. It is fundamentally better than traditional currency.”

In regard to whether the large influx of Chinese buyers can signal a bubble, Mr. Hodel explained it proved the opposite. “Speculation from yuan buyers is running wild,” he said, “However, bubbles are cultural reactions to a development. It is happening over all kinds of cultures.”

Certainly, that may raise the prospect that bitcoin is the first bubble currency of the new global digital culture. “That could be too,” Mr. Hodel noted. “But that probably suggests it will bubble up, burst and come back,” that way some currencies have the past when they originally rise to pre-eminence.

Source:New York Times