Bitcoin is a digital currency created in 2009 by Satoshi Nakamoto. It is also the name of the open source software he designed that uses it, and the peer-to-peer network that it forms.
Unlike most currencies, bitcoin does not rely on a central issuer, like a bank or government. Bitcoin uses a distributed database across a peer-to-peer computer network to record transactions, and uses cryptography to provide basic security functions, such as ensuring that bitcoins can only be spent once, and only by the person who owns them.
Bitcoin's design allows for anonymous ownership and transfers of value. Bitcoins can be saved on a personal computer in the form of a wallet file or kept with a third party wallet service, and in either case Bitcoins can be sent over the Internet to anyone with a Bitcoin address. Bitcoin's peer-to-peer topology and lack of central administration make it impossible for any government or other authority to change the value of bitcoins or induce inflation by producing more of them.