November 7, 2013 2:18 pm

Bitcoin price climbs to record high as China drives wider acceptance

AP Photo/Rick Bowmer

TORONTO – The price of Bitcoin continued to climb Thursday amid reports that the emerging digital currency was gaining a wider acceptance in the Chinese marketplace.

Bitcoin’s price was trading around US$290 on the BitStamp online exchange Thursday morning, just a day after it hit a record of $265.

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The digital currency’s future was called into question a month ago after U.S. authorities shut down an online black market site called “Silk Road,” where users could purchase drugs and drug paraphernalia. The website, often called the “eBay for drugs,” used Bitcoin for its transactions.

Bitcoin uses peer-to-peer (P2P) technology to operate without using banks and is not produced by a government or backed by a national currency.

Using Bitcoins allows users to send money directly to each other, without having to go through a bank, making fees much lower and allowing for international use of the money.

READ MORE: Bitcoin economics: A volatile currency

The currency, stored in a digital wallet, can be transferred between users in a matter of minutes.

Authorities seized $3.5 to $4 million (US) in Bitcoins when the Silk Road website was shutdown.

Later FBI officials seized 114,000 Bitcoins believed to belong to Ross Ulbricht, the 29-year-old who allegedly created the site, as part of the investigation. According to Forbes, this was the largest seizure of the digital currency to date – worth close to $28.5 million (US).

Bitcoin lost a third of its value following the Silk Road bust.

But, according to a report from Bloomberg, experts are seeing an increase in Bitcoin use in China which appears to be picking up the slack.

The report also noted that Chinese Bitcoin trading platform BTC China is now the world’s largest Bitcoin exchange.

Interest in Bitcoin has also picked up in Canada.

The world’s first Bitcoin ATM was put into use in a Vancouver coffee shop in late October, allowing users to exchange cash for the digital currency. A number of Vancouver businesses have also began accepting Bitcoin as a form of payment, from cafes to moving companies.

READ MORE: Vancouver businesses jump on the Bitcoin bandwagon

Bitcoin may be in for another boost in the coming weeks.

Just one month after Silk Road was shut down another website, under the same name, opened up for business Wednesday offering a wide variety of illegal substances. According to a report by The Huffington Post, a message on the new site declared that its community of buyers and sellers was “even stronger than before.” 

© 2013 Shaw Media

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