Bitcoin often described as a cryptocurrency, a virtual currency or a digital currency - is a type of money that is completely virtual. It's like an online version of cash. You can use it to buy products and services, but not many shops accept Bitcoin yet and some countries have banned it altogether. It allows people to send or receive money across the internet, even to someone they don't know or don't trust.
Some people like the fact that Bitcoin is not controlled by the government or banks. People can also spend their Bitcoins fairly anonymously. Although all transactions are recorded, nobody would know which 'account number' was yours unless you told them.
Satoshi Nakamoto in 2008
Using blockchain technology, Bitcoin allows users to make transparent peer-to-peer transactions.
The problem that Bitcoin solves is the reversibility of electronic payments. Bitcoin solved the reversibility problem by eliminating the need for a trusted third party that could willingly or unwillingly reverse transactions. In place of a trusted third party, a chain of cryptographically-signed transactions secured by proof-of-work to order and validate payments are used. And thus, the blockchain was born.
Bitcoin offers an efficient means of transferring money over the internet and is controlled by a decentralized network with a transparent set of rules, thus presenting an alternative to central bank-controlled fiat money. Bitcoin will continue to be different because unlike centralized coins, it's market-driven, immutable and unseizable.