More than $1 billion dollars worth of a digital currency known as "bitcoins" now circulate on the web – an amount that exceeds the value of the entire currency stock of small countries like Liberia (which uses “Liberian dollars”), Bhutan (which uses the “Ngultrum”), and 18 other countries.

So what is a “bitcoin,” and why would anyone use it?

Unlike traditional currency, bitcoins are not issued by a government or even a private company. Instead, the currency is run by computer code that distributes new bitcoins at a set rate to people who devote web servers to keep the code running. The bitcoins are then bought and sold for regular U.S. dollars online.

Bitcoin is in high demand right now -- each bitcoin currently sells for more than $90 U.S. dollars -- which bitcoin insiders say is because of world events that have shaken confidence in government-issued currencies.

“Because of what's going on in Cyprus and Europe, people are trying to pull their money out of banks there,” Tony Gallippi, the CEO “BitPay.com,” which enables businesses to easily accept bitcoins as payment, told FoxNews.com.

In Cyprus, the government is considering taking a percentage of all citizens’ bank accounts to solve its fiscal woes. That has led Cypriots -- and other Europeans worried about the same thing happening to them -- to take their money out of banks.

“So they buy gold, they put it under the mattress, or they buy bitcoin,” Gallippi said.

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Read more: http://www.foxnews.com/tech/2013/03/29/d...s#ixzz2OxehTW1L