Each year in Taiwan believers burn tens of thousands of tons of votive currency - also known as joss paper, spirit money or ghost money - during temple rituals, funeral rites and to mark important periods like Ghost Month (the seventh month on the lunar calendar). In the old days this money was made of rice straw; now it's conventional paper. There are different kinds of currency for different occasions and to benefit different recipients (gods, ghosts or ancestors), hence the different images and characters on the notes.
Ghost money is seldom sacrificed by itself; usually it's offered as part of a rite involving offerings of food and soft drinks (sometimes rice wine, too) and praying while holding incense sticks.
Ghost-money burning is a health hazard for people living in built-up areas. Even if it wasn't, it's so unpleasant many foreigners visiting Taiwan wish the custom could be taxed or somehow abolished. Some major temples have abolished the practice, or moved the actual burning to alternative locations where people are less likely to be affected.