Overview
Society ismoving from a cash driven to a electronic payment system for the purchase or use of goods and services. The internet and mobile devices have become the market place of choice for transactions. Cash transactions are not possible through this election mercantile system. Bitcoin has risen to fill the need for electronic transactions. Bitcoin is a form ofdigital currency. Bitcoin has no government and no source of backed asset such as gold backing. The use of digital currency is being driven by several different issues. Such as the rise of rebellion of consumers who are seeking refuge from banks and taxation by governments. Consumers are losing faith due to the liquidation and taxation of the value of government back currencies. Bitcoin has become a currency that consumers can use like cash over the internet to avoid recording of the transaction. Another use is for payment of illegal activities anonymously. This report researches the rise and use of bitcoins and how it will challenge central government backed currencies.
The Cyprus run on the banks
George Kyprou, 62, born in Larnaca Cyprus, had worked most of his life as a chauffeur and driver in England, proudly buying his London council flat and scrimping to put aside money in Cyprus for when he returned for holidays and eventually to retire. "I'd put aside £50 here, £20 there, all my life," he said. Over decades, he had built up around €6,000 (£5,200) in a Larnaca account. "It was a state building society; I assumed it was safe. George was astonished to wake up one bank holiday weekend morning to discover the government had seized up to 10% of everyone's savings from their bank accounts without warning. (Chrisafis, 3)

Due to the Global crisis, Cyprus accepted a global bale out from the European Central Bank (ECB). The restructuring of the Cyprus debit call for the raising of taxes “as