US Senators worried about Bitcoin and the possible link to the online drugs market

Bitcoin is a peer-to-peer virtual currency that was established in 2009 which bypasses regular banks and clearing houses.

Bitcoin has come under fire recently from US senators who are worried that it is being used to anonymously buy illegal drugs online.

The coins can be generated online by people running an application called a Bitcoin Miner and are then stored in the user's digital wallet and exchanged anonymously, using an electronic signature.

Recently, the currency was in the news after the Gawker blog network posted a story claiming it was the only way users can buy drugs on Silk Road, an online marketplace accessible through the annonymising network Tor.

Democratic senators Charles Schumer of New York and Joe Manchin of West Virginia have now written to Attorney General Eric Holder and Drug Enforcement Administration head Michele Leonhart expressing their fears about both the Silk Road and Bitcoin.

The senators say they "urge you to take immediate action and shut down the Silk Road network" but this would be an extremely difficult task, prompting speculation that the site's currency, Bitcoin, could be targeted instead.

Drug Enforcement Administration (DEA spokeswoman) Dawn Dearden told Reuters that the agency is concerned about Bitcoin and similar digital currencies, adding: "The DEA is constantly evaluating and analysing new technologies and schemes perpetrated by drug trafficking networks."

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