Casper, a Year 11 student from United Christian College (Kowloon East), owns about 50 bitcoins, which is quite a fortune for a teenager. But he does not think of his haul as an instant cash cow; he sees the bitcoin network more as a massive social experiment in a new type of payment network. "With traditional currency, governments control the majority of its business," he says. "By contrast, bitcoin controls everything in the protocol, it uses a mathematical rule in the programme, and every user of the network adds to the consensus.
Casper says government control can imply that something will be more stable, "but the government can also abuse the system, such as printing more money. That causes inflation.
"For example, Argentina's reckless capital control, with massive taxes on foreign transactions, would have been solved with bitcoin, since the system works on a peer-to-peer network and takes away the power of corrupt governments."
Under payment methods such as credit cards and PayPal, merchants' transactions incur a huge transaction fee - about 3 per cent of the money transacted. Banks also take a higher fee on transactions involving smaller countries or those with poor credit ratings. This is something that Casper thinks should change. "Imagine if we could send money to places like Kenya without having to pay 10 per cent fees in bank charges," he says.
"Bitcoin takes away the trust needed to do a transaction. No entity has to be trusted in order to send a payment. Trust is built by excluding corruption. Bitcoin is a way for the unbanked to work for themselves. Instead of being ripped off by banks' ridiculous charges, bitcoins can only be sent, but not 'called out' from a wallet, so no one can take extra charges from you."
Casper first became aware of bitcoin when creating his own website and finding out bitcoin could monetise it. "I've been learning about bitcoin for two years," he says. "I bought bitcoins for the first time with my lai see money last year. I have spent some of my bitcoins on watches, T-shirts and music. My plan is to hold on to most of my bitcoins, spending some occasionally, while investing in some bitcoin-denominated stocks or bonds, which help to build the digital economy."
Despite the hype around bitcoins, Financial Secretary John Tsang Chun-wah wrote in a blog that bitcoins' bull run can't last forever because there is "no support from the real economy". He linked the rise in value to speculation and argued that "the more popular bitcoin is, the risks of a market bubble burst are higher".
Tsang might be right. Bitcoin investors often seem to be on a roller coaster. The price of a bitcoin topped HK$9,630 at the end of November before plunging by 57 per cent to HK$4,187 in less than a week.
Casper says he is prepared for such volatile price swings, but that they aren't his main concern. "I have experienced rises and falls for quite a long time," he says. "I guess my sense of it has numbed.
"I don't think the price is a major factor of bitcoin. It's more merchants' and users' adoption of it, and new infrastructures that are interesting to me."