  We introduce an interference measure which allows to quantify the amount of
interference present in any physical process that maps an initial density
matrix to a final density matrix. In particular, the interference measure
enables one to monitor the amount of interference generated in each step of a
quantum algorithm. We show that a Hadamard gate acting on a single qubit is a
basic building block for interference generation and realizes one bit of
interference, an ``i-bit''. We use the interference measure to quantify
interference for various examples, including Grover's search algorithm and
Shor's factorization algorithm. We distinguish between ``potentially
available'' and ``actually used'' interference, and show that for both
algorithms the potentially available interference is exponentially large.
However, the amount of interference actually used in Grover's algorithm is only
about 3 i-bits and asymptotically independent of the number of qubits, while
Shor's algorithm indeed uses an exponential amount of interference.
