There's a new, unconventional form of a digital wallet available for your Android phone. And it's not the Google Wallet.

First introduced to the Android Market on Wednesday, the Bitcoin app for Android turns your smartphone into a wallet for Bitcoins, a form of alternative, decentralized currency that has been circulating the web for a few years. The app allows you to store and transfer Bitcoins from one device to another, which means you'll be able to pay for items without having to use cash or credit, all from the comfort of your own smartphone.

When you want to transfer Bitcoins to another account, a QR code pops up on your smartphone's screen. The other user simply scans the QR code with his or her phone, and the Bitcoins are transferred to the second phone's account. If you happen to lose your phone, it's not a huge deal – all of your Bitcoins are backed up with your Google account, synced to the cloud.

"Right now, Bitcoin appeals mostly to the hacker types," said Android developer Brandon Iles, the app's creator. "Down the line, though, it could gain traction between friends. There's an advantage over credit card companies because there’s no fees involved in the transaction."

The virtual currency received some small amount of attention when it was initially developed in 2009, based primarily on a paper published by developer Satoshi Nakamoto. But Bitcoins received much more attention in recent months after Gawker published a story on the use of Bitcoins to buy illegal drugs from the underground web site "Silk Road." Since the story ran, Bitcoins have been at the forefront of the news, especially in light of Google's own digital wallet initiative, aptly titled "Google Wallet."

Users can transfer Bitcoins to and from each others' accounts using scannable QR codes. (Photo courtesy Brandon Iles)

Those who want to adopt the new form of currency face a number of problems, however. The market value of a Bitcoin has been anything but stable; in mid-June, the value of a Bitcoin fell from $17 USD to less than $1 in a matter of minutes, after copies of a prominent Bitcoin trading market's user database started circulating freely online.

More recently, a Trojan Horse virus capable of stealing Bitcoins from user accounts has been circulating the web, according to virus protection company Symantec. One user claimed a theft of 25,000 Bitcoins from his account.

"It’s still very much the wild west out there," said Iles, who developed the Android application with one other partner in his spare time. Iles' day job is at Google.

Iles expects to add more features to the app in the coming months, including a PIN for security, and in-app currency converter that can be used to equivocate established currencies (like the dollar or yen) into Bitcoin amounts, and vice versa.

The application is available for free on the Android Market for devices running version 2.2 (Froyo) and above. It comes with a disclaimer: The app is still in development and could potentially lose some of your Bitcoins, so test it with small amounts to begin with.

For a less complicated explanation of Bitcoins, see the video explainer below.

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