Bitcoin exchange Huobi
The bitcoin industry has recently been hit by a number of woes. Reuters

A majority of UK consumers do not trust popular digital currency bitcoin as a payment option, according to a research report.

In addition, a majority of them admitted that they do not know how the digital currency works.

In a survey of UK consumers conducted by e-commerce solutions provider Venda, 71% of respondents say that they would rather not use bitcoin to pay when shopping online, while 43% admitted that they do not trust the digital currency.

The distrust for the currency comes as global transactions of bitcoin have increased more than tenfold over the last year to an average $68m per day in February, according to research by Fitch Ratings.

"Our research warns of a fundamental mistrust of Bitcoin and need for more education on how these virtual currencies actually work if they are to truly take off," said Eric Abensur, Group CEO, Venda.

"A time may come where consumers can pay in-store using Bitcoin, but for now the fact that the price of a Bitcoin is in constant flux means that it's simply not a viable way for businesses to take money for products."

"Even those that are currently taking payment by Bitcoin for products or services are, by and large, converting that to a standard currency for safe keeping and further use," he added.

Bitcoin was launched in 2008 and is traded within a global network of computers. They can be transferred without going through banks or clearing houses, reducing fees involved in the services significantly.

The number of retailers who accept the digital currency as payment option has been increasing, as it gained more in terms of popularity and value.

However, the lack of a monitoring authority and sudden swings in the value of the digital currency raised concerns about its future.

Governments across the globe have made different decisions regarding businesses related to bitcoin. While some have banned any dealings in the currency, some others have come up with pro-active policies that consider bitcoin firms just like any other tax-compliant companies.