Virtual bitcoin to buy Perth home

This is the Perth hills home whose seller is stating that the house can only be bought for bitcoins. Source: Supplied

Biscotti are one of the local places accepting Bitcoins as payment. Pictured is Alex Morgan with Zoe Ravensberg. Source: News Limited

FOR SALE: A five-bedroom Perth Hills property for $1.4 million that overlooks a lake and has air-conditioning, a pool, timber decking and even a wood-fired pizza oven.

The only catch: the owner must be paid in a digital currency known as bitcoin.

The sale, which would make the property the first in Australia to be sold for bitcoin, is the latest sign WA is embracing digital dollars.

But even bitcoin enthusiasts have been shocked by the offer, as the value of the currency fluctuates wildly.

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The price of a single unit, which can be traded in online exchanges or "mined" through powerful computers that crack complex algorithms, has surged tenfold since the start of the year, hitting a high of more than $1000 last month before falling heavily.

Perth businessman Bret Treasure, 53, chairman of the Australian Web Industry Association and a board member of Bitcoin Australia, believes it's the first bitcoin house sale in Australia.

"The seller obviously believes the value is going to appreciate because to mine that much bitcoin you would need a bloody supercomputer," he said.

Mr Treasure's son, Leo, 28, last year took out a $20,000 loan to buy bitcoins.

He now owns "a bit over 1000" bitcoins, worth about $750,000.

He is also importing Australia's first bitcoin kiosks, which will allow people to exchange cash for bitcoin.

The first of the ATM-like facilities, which credits a user's virtual wallet in their smartphone, will be installed next month at Spacecubed, a shared work space on St Georges Tce.

Others are planned for Frisk Small Bar in Northbrid ge and Fremantle's Treasure Gallery.

Bar Biscotti, on the ground floor of the CBD's Bankwest building, this month became Perth's first traditional business to accept bitcoin.

Customers buy drinks and food by scanning a QR code with an app on their smartphone, with all bitcoin users receiving a 5 per cent discount.

Six businesses in Perth are accepting bitcoin, according to the CoinMap website.

But Associate Professor David Glance, director of UWA's Centre for Software Practice, could see little value in businesses adopting it.

"The currency is so volatile that it's almost useless as an electronic currency at the moment," said Prof Glance, who owns two bitcoins he bought for $10 each in 2011.

"You could buy a cup of coffee and two minutes later the cost of that coffee was three times what you paid for it."

UWA Winthrop Professor of Economics Ken Clements said the bitcoin's long-term viability would be determined by its rate of inflation.

"It's uncertain what their supply is going to be in the future, so it's uncertain what their value is going to be," he said.

WHAT IS BITCOIN?

Bitcoin is a decentralised digital currency launched in 2009 by a programmer who goes under the pseudonym Satoshi Nakamoto. It can be exchanged through a peer-to-peer network without the need for a financial institution.

WHO ISSUES BITCOINS?

Bitcoins are not issued from a central bank in the same way as dollars are printed. Instead, the currency is awarded to users of Bitcoin software, known as miners. The miners use computers to perform complex calculations which are needed to confirm Bitcoin transactions.

HOW DO YOU BUY BITCOINS?

Bitcoins can be bought from currency exchanges for those who don't have computer hardware to mine for the currency. These exchanges allow users to buy and sell bitcoins for other real world currencies.

WHAT ARE THEY WORTH?

Fuelled by speculators, the value of Bitcoin fluctuates wildly. In late November the price surged to more than $1000 (AUS) per Bitcoin, more than 10 times its value at the start of the year. As of Friday, a single Bitcoin cost about $750.

WHERE CAN YOU SPEND THEM?

Bitcoin can be used for private transactions between users, but a number of businesses are also adopting the currency. Bar Bescotti, in the CBD, lets customers make purchases by using an app on their smartphone.

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