Bitcoin:

Bitcoin was developed in 2009 as a crypto-currency. Marketplaces called "bitcoin exchanges" allow people to buy or sell bitcoins using various currencies. Bitcoin is a digital currency which an anonymous individual developed using the pseudonym Satoshi Nakamoto in 2009. There are no middle people making transactions–basically, no banks.

Importance:

Bitcoins can be used to secretly purchase products. Moreover, foreign transfers are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small companies may prefer them because they don't have credit card fees. Some people are buying bitcoins as savings, hoping they will go up in value.

How does Bitcoin Works?

The blockchain is a decentralized public ledger that depends on the entire Bitcoin network. All verified transactions fall within the blockchain. It helps Bitcoin wallets to measure their spendable balance to check new transactions while ensuring that they are currently owned by the spender. Cryptography enforces the dignity and chronological order of the block-chain.

Once you have installed a Bitcoin wallet on your computer or mobile phone, your first Bitcoin address will be created, and you can build more whenever you need one. You should show your addresses to friends so they can pay you or vice versa. This is somewhat similar to how email operates, except that the Bitcoin addresses can only be used once.