Bitcoin is a Peer-to-Peer Electronic Cash System
Bitcoin is peer-to-peer version of electronic cash that allows online payments to be sent directly from one party to another without going through a financial institution.
Bitcoin was created by Satoshi Nakamoto which is the name of an anonymous person or group. The detailed whitepaper can be found here.
Bitcoin has the following properties.
Decentralised – Every person running a full version of the software (also referred to as a node) has a complete copy of the ledger, which contains amounts and balances of addresses. There is no central server that checks if you have a certain balance as done with banks, each node has its own identical copy that verifies the transactions are valid or not.
Immutable – Transactions are permanent, can not be forged or counterfeited. If you receive payment (As with cash the person who sent it to you can’t take it back).
Fungible – Every Bitcoin or part of is equal, it maintains its value, 1 Bitcoin has the same value regardless of who currently owns it or who owned it before you. An example of what is not fungible is a banana which will rot.
Permissionless and without borders – To participate in the network all you need to do is run the Bitcoin software, there is no need for personal information, id checks, age or other barriers to join. The network is not controlled by anyone.
Divisible – 1 Bitcoin is divisible down to 8 decimal places, so you can send someone 0.00000001. The lowest divisible amount is also referred to as 1 Satoshi, so 1 BTC is the same as 100 Million Satoshis.
Scarcity – There will only ever be a maximum of 21 million Bitcoins, this is mathematically coded into the software. New coins are created every 10 minutes by a process called mining and the reward is halved every 4 years.
Transferable – To be a digital form of cash you need to be able to send it, you can send any amount you own at barely any cost in seconds to anyone, anywhere in the world. (As a comparison there would be a lot of security measures needed to send 1 Million dollars worth of gold overseas, including security guards, transportation costs etc.)