Bitcoin sounds like what it is--a type of money.

But it’s a special kind of money that could not exist without the Internet. It is digital and virtual; people can’t carry it around in their pockets or keep it in a bank.

Despite these differences from traditional money, there are places around the world that are starting to accept bitcoins to pay for things. Some restaurants and shops in New York and San Francisco accept bitcoins, and so does WordPress, a blogging website. A man in Alberta is offering to sell his house for bitcoins instead of Canadian dollars.

Bitcoin has been around for a few years but it is becoming more popular. Part of the reason is that banks and governments around the world that use dollars, euros and other forms of traditional money -- or currency -- are having problems with their lending and spending.

The value of bitcoins got a boost in March when countries in Europe that use the euro had to “bail” out a country called Cyprus. To get the bailout, Cyrus had to agree to make changes to its banks. The bailout deal included forcing people with deposits in those banks to give up some of their money.

The situation in Cyprus made people around the world nervous, because they don’t want to lose the money they have in the bank.

Bitcoin isn’t distributed by a central bank, or stored in banks at all. The currency is virtually “mined” by computers solving difficult math problems, and bitcoins are then traded from one person to another.

Source: “Bitcoin” Is A New Type Of Money