In an age when the economy is unstable and every expense is met by a tax, some have thought of their own means to tackle the tough situation. One such way is the launching of digital currencies, which have no physical presence and can only to be used on the Internet, but function in much the same way as real currencies.

This is how Bitcoin came to exist. Since its launch in 2009, the amount of users of the electronic cash are extraordinary and it has since come to China. But is Bitcoin the answer to economic woes?

Virtual jackpot

The idea behind Bitcoin came about in 2008, when a person named Satoshi Nakamoto published a post on an obscure cryptography website, listing the theories and statements about his idea of a digital currency. He said in his post that the foundational problem for traditional currencies is their lack of credibility.

Speaking to the Global Times, Gavin Andresen, a coder of the Bitcoin virtual currency system, said that Nakamoto was the first person to solve a very difficult technical problem. He made it possible to have online money that is not manipulated by any organizations. "Bitcoin has been successful because through his design everybody has a sense that those using bitcoins play by the same rules," he said.

Flash forward three years and on Bitcoin currency exchanges reach around $300,000 daily and almost nine million bitcoins (worth about $45 million at today's exchange rate) have been created.

Now there are hundreds of websites worldwide doing business related to Bitcoin. Bitcoin is also in China after a Bitcoin fan named Yang Linke established a Chinese website for it, offering exchange services between Bitcoin and the yuan for online users.

Donald Norman is a big beneficiary and believer in Bitcoin. He is the co-founder of Bitcoin Consultancy, which is a Bitcoin development group, and the owner of Intersango.com, a website that allows people to do currency exchange between Bitcoin and popular currencies. He believes that the effect of this digital currency upon the world of e-commerce is enormous.

"Payments using bitcoins are free, international and quick in a way that no other systems are," he said. "Bitcoin is the only way that you can send money internationally without going through a third party, which means that no one can stop your payment or shut your account or take money from you."

Norman said that if someone was sending him money, he would rather receive it in bitcoins instead of getting less money due to transaction costs.

On Bitcoin.com, the software that you need for using and purchasing the currency is free. It is also fairly straightforward. "Unlike programs that allow you to download movies and share multiple files, only one file is shared which every user has," Norman said. "That file is called the block chain and has a history of all transactions that have ever occurred. If I were to send you a bitcoin, every user would get a record of the payment, but no one would know that it was me linked to the sending address or that the receiving address was yours," he added.

Bursting the Bitcoin bubble

Sadly the Bitcoin world is not completely problem-free. Last year there were several cases of online theft. Hundreds of thousands of bitcoins were taken by hackers, which caused concern amongst users about its reliability.

Yang, the founder of the Bitcoin Chinese website, said that the top exchange rate of Bitcoin to yuan last year to this year dropped from 130 yuan ($20) per coin to 30 yuan. "The incidents of theft are one major reason for the value decline," Yang said. "Currently, there are around 8,000 registers on my website and the deals per day are just around a few hundred."

"There are almost 300 machines connecting to the Bitcoin network from inside China," Norman added. Yet Norman has his own thoughts on the currency's future in China. "Users in China have no way of paying or accepting payments without incurring huge fees and chargeback costs from services like VISA, MasterCard and PayPal," he said.

Andresen also explained that it will take time for people to trust something as new as Bitcoin. "I still tell people to consider it an interesting, exciting experiment," he explained. "I think it will take several more years before people start considering it to be a truly legitimate alternative to other currencies," Andresen added.