Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren't printed, like dollars or euros – they're produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.
It's the first example of a growing category of money known as cryptocurrency.
The bitcoin network isn't controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together. That means that, in theory, one central authority can't tinker with monetary policy and cause a meltdown - or simply decide to take people's bitcoins away from them, as the Central European Bank decided to do in Cyprus in early 2013. And if some part of the network goes offline for some reason, the money keeps on flowing.
Conventional banks make you jump through hoops simply to open a bank account. Setting up merchant accounts for payment is another Kafkaesque task, beset by bureaucracy. However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable.
Well, kind of. Users can hold multiple bitcoin addresses, and they aren't linked to names, addresses, or other personally identifying information. However..
..bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain. The blockchain tells all.
If you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address. They just don't know that it's yours.
There are measures that people can take to make their activities more opaque on the bitcoin network, though, such as not using the same bitcoin addresses consistently, and not transferring lots of bitcoin to a single address.
Your bank may charge you a $10 fee for international transfers. Bitcoin doesn't.
You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.
When your bitcoins are sent, there's no getting them back, unless the recipient returns them to you. They're gone forever.
A Satoshi is the smallest fraction of a Bitcoin that can currently be sent: 0.00000001 BTC, that is, a hundredth of a millionth BTC. In the future, however, the protocol may be updated to allow further subdivisions, should they be needed. 1 Satoshi = 0.00000001 BTC 10 Satoshi = 0.00000010 BTC 100 Satoshi = 0.00000100 BTC = 1 Bit 1,000 Satoshi = 0.00001000 BTC 10,000 Satoshi = 0.00010000 BTC 100,000 Satoshi = 0.00100000 BTC = 1 mBTC (em-bit) 1,000,000 Satoshi = 0.01000000 BTC = 1 cBTC (bitcent) 10,000,000 Satoshi = 0.10000000 BTC 100,000,000 Satoshi = 1.00000000 BTC
Satoshi1000 gives up to 1000 satoshi every 15 minutes.