A NEW DIGITAL CURRENCY: BITCOIN

If you think you've seen and heard everything, well you probably haven't. In fact the writing was on the wall for all of us to see. There's now a new currency available but it's not exactly physical. It's not paper, and it's not gold or silver either. But it's not exactly new since it was launched four years ago.

What we're referring to is Bitcoin, a new 'digital' currency launched in 2009. Similar to PayPal but different. Unlike PayPal, Bitcoin trades like a real currency since it's value can go up and down considerably in just one day.

Bitcoin's value has surged 50 percent in recent days, but a currency exchange service outage and an unrelated hacker attack knocked its value down quite a bit in just a few days.

The 'peer-to-peer currency' which was languishing in the midteens in January surged past $100 on Monday and was trading as high as $147 today before an hour-long service outage at Mt. Gox, the world's largest Bitcoin exchange, pushed its value back down to $115.

The currency rebounded a bit yesterday to close at $123, a 500 percent increase in the past two months. Mt. Gox initially blamed the outage on a surge in trading volume that created a lag in trading and order cancellations.

But the exchange said it was experiencing a distributed denial-of-service (DDoS) attack. Meanwhile, Bitcoin wallet company Instawallet announced today that it has suspended its service indefinitely after being hacked. Bitcoin has been so popular in fact that it's now attracting such problems as DDoS attacks and other security threaths.

"Our database was fraudulently accessed, due to the very nature of Instawallet it is impossible to reopen the service as-is," Instawallet said in a statement posted to its Web site. "In the next few days we are going to open the claim process for Instawallet balance holders to claim the funds they had stored before the service interruption."

The service detailed its plans for handling claims submissions as thus: "For the first 90 days we will accept claims for individual Instawallets. Your wallet's URL and key will be used to pre-populate a form to file the claim."

After 90 days, if no other claim has been received for the same url, your Instawallet balance under 50 BTC will be refunded. If several claims have been filed for the same URL, we will process those claims on a case by case basis, under the presumption that the claim we received first belongs to the legitimate account holder.

While Instawallet did not indicate whether any funds were lost in the hacker attack, the Bitcoin platform has been a frequent target for criminal activity including thefts, hacks, and scams. Nearly a quarter of a million dollars was stolen in one such virtual heist last year.

Launched four years ago to intentionally avoid the prying eyes of law enforcement officials, the virtual currency has been gaining traction with investors in recent months as its acceptance has grown.

WordPress announced last November that it would begin accepting Bitcoin as payment for upgrades on the popular blogging platform. The currency platform gained more backing last month when Mt. Gox, the world's largest Bitcoin exchange, reached an agreement with CoinLab to manage the exchange's operations in the United States and Canada.

Some analysts also believe that Bitcoin's growing popularity in recent weeks is also due to the recent banking crisis in Europe, specifically in Cypress that resulted in several banks being closed for nearly two weeks in mid-March.

Overall demand for the currency has been especially great in countries like Greece and Spain, where investors are worried that they will be next to feel the threat of deposit taxes, said Nicholas Colas, chief market strategist at financial technology company ConvergEx Group.