Bitcoin is a decentralized peer-to-peer digital currency that uses public-key cryptography, peer-to-peer networking, and proof-of-work to process and verify payments. This enables you to send instant payments to anyone, anywhere on the globe, with no central authority; transaction management and money issuance are carried out collectively by the network.
Bitcoins are sent (or signed over) from one address to another with each user potentially having many, many addresses. Each payment transaction is broadcast to the network and included in the blockchain so that the included bitcoins cannot be spent twice. After an hour or two, each transaction is locked in time by the massive amount of processing power that continues to extend the blockchain. Using these techniques, Bitcoin provides a fast and extremely reliable payment network that anyone can use.
Satoshi Nakamoto released the original Bitcoin software under the MIT license in 2009, is the first successful implementation of a distributed crypto-currency, builds upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, and is designed around the concept of using cryptography to control the creation and transfer of money, rather than relying on central authorities.
Which explains the controversy over Bitcoins. It takes conventional banks whom issue credit cards completely out of the equation. In other words, Bitcoin takes the middleman out, saving you money.
But there are somethings you should know before diving in. First, Bitcoin allows you to exchange money in quite a different way than with usual banks. As such, you should take time to inform yourself before using Bitcoin for any serious transaction. Bitcoin should be treated with the same care as your regular wallet, or even more in some cases!
As with a normal bank, your wallet must be secured. Bitcoin enables you transfer value anywhere in a very easy way and allows you the control of your money. Such great features also come with great security concerns. At the same time, Bitcoin can provide very high levels of security if used correctly. Always remember that it is your responsibility to adopt good practices in order to protect your money.
Due to its age, novel nature and at times illiquid markets, the price of a bitcoin can increase or decrease over a short period of time As such, throwing all of your money into Bitcoins is not recommended at this point. Bitcoin should be seen like a high risk asset, and you should never store money that you cannot afford to lose with Bitcoin. If you receive payments with Bitcoin, many service providers can convert them to your local currency and is recommended.