Bitcoin's are digital currency which are stored in a digital valet, you could use it to make transactions for services or good's' without a middel-man like Bank's etc. If the receiver also has Bitcoin.
More Info on: http://money.cnn.com/infographic/technology/what-is-bitcoin/
How do you get one and use it...: https://www.weusecoins.com/en/getting-started
Don’t use Bitcoins as of now. Virtual currency has not yet matured to that level. Every new technology takes time before it’s in that stage. Over that Bitcoins do not have enough liquidity.
You don’t keep Bitcoins in a bank and there’s no one regulating the currency. Especially the concept of Bitcoin mining seems little odd sometimes. You’re running algorithms on your computer that are decrypting some cryptographic problems and for each block you get 25 bitcoins. Similar to the way Gold, Diamond, Silver etc. were/are mined. Many people are mining bitcoins in pools as doing it in individual is not rewarding enough considering the hardware costs.
By making transactions in Bitcoins there’s huge money being saved which usually would have been paid as transaction fees to payment gateways. As it is P2P currency you’re directly paying to the merchant and there’s no middle man conducting the transaction but a number of computers solving the cryptographic problems. Anyway as a currency Bitcoin does has great future ahead.
Quoting Wikepedia “Bitcoin is a cryptocurrency and a payment system invented by an unidentified programmer, or group of programmers, under the name of Satoshi Nakamoto“. It is a non-tangible electronic currency controlled by no one. In fact it is produced by people like us using advanced computation algorithms. The process of producing Bitcoin is termed as ‘Bitcoin Mining‘. Bitcoin can be used to transact electronically like we do with Credit cards. And since there is no one controlling it, there is no transaction fee at all. Your bank may charge you hefty fee for international transfers, Bitcoin doesn’t.
Read more about investing in Bitcoin below:
Here's a simple explanation about how bitcoin works.