TOKYO -- Mt. Gox has gone. The 2013 darling of the bitcoin universe is in liquidation. Customers are unlikely to get back the estimated $450 million said to have been held on the exchange.

Yet the Tokyo-based company's disappearance has not dampened the sentiment of some bitcoin enthusiasts.

In Hong Kong, bitcoin devotees are working to build better trading infrastructure. In Geneva, two researchers are working to prove that whatever happened at Mt. Gox, the mysterious Satoshi Nakamoto's initial bitcoin model remains viable. And in London, a man who in February lost 250 bitcoins (worth about $200,000 at the time) in the Mt. Gox debacle is confident the disaster will lead to improved cryptocurrencies.

Appeal

"I didn't think this sort of thing could last long," Japan's Finance Minister Taro Aso said after Mt. Gox crashed. Japan plans to classify bitcoins as a commodity, putting them under the jurisdiction of the trade ministry. The government is looking at imposing consumption and capital gains taxes on cryptocurrencies, The Nikkei reported in March.

The climate in Hong Kong is different. While authorities say they are keeping an eye on bitcoin, in practice they are taking a hands-off approach for now. "At present, the acceptance of bitcoins by local vendors as a medium of payment is so limited that it is unlikely (they) will pose a significant threat to Hong Kong's financial system," K.C. Chan, secretary for financial services and the treasury, said Jan. 8 in the Legislative Council. "Nevertheless, regulators will remain vigilant about the development of such virtual currencies to ensure that their use will not undermine the financial stability of Hong Kong."

Earlier this year, the island city became the home of the world's first bitcoin shop. The store, opened by bitcoin exchange ANXBTC, allows customers to walk in and purchase coins with U.S. or Hong Kong dollars. The exchange and other entities have also set up bitcoin ATMs.

Hong Kong, too, views the coins as a commodity, but since the city has no capital gains taxes, "most are fine with that," says Samuel Bourque, a programmer with financial experience in Tokyo. He currently works on white papers about bitcoin's legal status at the School of Law, City University of Hong Kong.

The currency appeals to brave investors. Volatility is one reason why. The coins were worth basically nothing when first released in 2010. The price per coin hit a high of $1,151 in late 2013. Bitcoin's market capitalization peaked Dec. 4 at $13.9 billion, and while the figure was down to $5.95 billion on April 19, it rebounded to $6.25 billion as of April 22.

Some like cryptocurrencies for a different reason. "The true innovation that came with (Nakamoto's) paper (introducing bitcoin) was not the invention of Internet money, it was a solution to the double-spend problem," Bourque says, referring to an issue with some online cash systems where the same digital money can be spent twice. "The whole system, every node, carries a validation of every transaction that ever happened. So you've got this ledger." The security this provides means bitcoins can be used to make big investments without the need for lawyers, bankers or other intermediaries.

Be it for money or idealism, cryptocurrency innovations are appearing across Asia and bitcoin imitations continue to sprout up. The combined capitalization of the top 10 virtual currencies was $6.85 billion on April 22, according to the website coinmarketcap.com.

The industry remains shrouded in uncertainty. But people are working to reduce cryptocurrency risks -- and learn from past mistakes. "If my parents' generation were doing LSD and I realize what it did to their brain, am I going to do it? No, I think not," says David Shin, who plans to launch a bitcoin crowdfunding platform in Hong Kong called CryptoMex in the coming weeks.

Shin has worked in finance for banks such as Lehman Brothers, Standard Chartered and Morgan Stanley over the past decade, specializing in information technology and derivatives. His new platform will allow investors to put money into ventures using bitcoin and receive payments later. "We call these 'shares' profit units, because they are IOUs, but investors do not own portions of companies."

CryptoMex will launch with "three or four companies after due diligence," Shin says. Not just anybody will be able to list, he added, pointing out that a Mt. Gox-style fiasco would be catastrophic. The companies he expects to eventually list include a Hong Kong bitcoin exchange, an established Canadian content-management business and ventures that "mine" bitcoins. "We are also talking to a Formula One driver. He has a company set up under his name to manage his brand."

Leonhard Weese runs the Bitcoin Association of Hong Kong, which is in the process of registering as a company limited guarantee -- "an easy form of setting up a nonprofit under Hong Kong law," Weese says. The association will work to educate the less computer savvy, lobby to keep cryptocurrency regulations "sensible," and promote both the technology and the companies using it.

Cryptic case

There is a big unanswered question looming over bitcoin, though: What, exactly, went wrong at Mt. Gox?

The exchange claimed in February that a bug had allowed some users to fool its system into giving them two coins for the price of one, through a process called "transaction malleability." Researchers Christian Decker and Roger Wattenhofer of ETH Zurich, a university, deny this is the case. They have been monitoring the online record of bitcoin trades since early 2013 and say they found no evidence of malleability leading to the Mt. Gox loss.

"Mt. Gox claimed to have lost 850,000 bitcoins due to malleability attacks, we merely observed a total of 302,000 bitcoins ever being involved in malleability attacks," Decker and Wattenhofer wrote in a paper that is yet to be peer reviewed but which they released due to public interest in the case. "Of these, only 1,811 bitcoins were in attacks before Mt. Gox stopped users from withdrawing bitcoins."

Decker and Wattenhofer do not have the full bitcoin transaction data set. Perhaps the heist took place before the two researchers began monitoring? They say that's unlikely. "Why would an attacker, having found such a lucrative attack before 2013, suddenly stop exploiting it?" they ask. Wattenhofer told Nikkei Asian Review that to have a better idea of what happened, they would have to see Mt. Gox's public keys. They acknowledge this is a matter for Japan's authorities to decide.

All sorts of other Mt. Gox theories are going around. "I think (CEO Mark) Karpeles lost the password for the wallets where they are held," says Brian de Heus, the owner of 2connect, a Tokyo software consultancy.

London-based Kolin Burges had around 250 bitcoins held temporarily in Mt. Gox when the exchange froze withdrawals. He traveled to Tokyo to protest outside the company's headquarters and says he has spoken with insiders. He alleges there was something nefarious going on: "that the bitcoins have been missing for years, and Mt.Gox has been covering it up," or that "someone from the inside took the coins."

Still, Burges says the disaster is "a long-term positive thing for cryptocurrencies. It is pushing exchanges to be more transparent and improve their security, as well as pushing investors to use more trustworthy exchanges. Hopefully it will also eventually lead to governments enforcing some basic regulation on digital currency exchanges."

Bourque in Hong Kong sees incompetence behind the loss. "Mt. Gox was not secure," he says. It "was just a prototype that got too popular too fast -- it couldn't keep up with the volume. It regularly messed up, so it became fodder for hackers. The Mt. Gox disaster was a combination of bad design and users' misplaced trust in the exchange."

Fun money

While some battle for bitcoin's future, others have moved on. In Tokyo, de Heus shrugs -- he couldn't care less about bitcoin. "I used to mine alternative cryptocurrencies and turn them into bitcoin. I did this because the alternatives gain a lot faster than bitcoin fluctuates." Then he gave up. The stress made bitcoin too much of a hassle. Now he carries a cryptocurrency called Dogecoin.

"It's such a fun currency. They funded a Nascar driver. They funded water wells in Africa. They have all these charitable events going on."

There is a lesson in de Heus' switch. If digital cash is to win over the masses, it cannot be embroiled in wonkish issues such as regulations, security, profits and disruptions. Cryptocurrencies are going to have to become as simple and enjoyable as $100 in a bar. If Hong Kong gets security and regulation right, that will be the next challenge.

Says de Heus: "Bitcoin (today) is a whole lot less fun, unless you are into bitterness."