Bitcoin is a type of digital currency, created and held electronically. No one controls it, so it operates independently without any central authority. Encryption techniques are used to regulate the generation of currency units and to verify the transfer of funds. Bitcoin is the first, as well as the most widespread and successful, example of cryptocurrency. It is a new category of money with a growing user base.
Bitcoins are not printed like regular currencies and are not backed up in gold or cash. They are produced by using computing power and software that solves complex mathematical problems. The software limits the amount of bitcoin that can be created to only 21 million.
Read more about Bitcoin and its features on Wikipedia.