Bitcoin is a digital currency that operates without central control or oversight from banks or governments. Instead, this currency relies on peer-to-peer software and cryptography.
A public ledger records all bitcoin transactions, and copies of it are stored on servers around the world. Anyone with a backup computer can set up one of these servers, known as a node. Consensus on who owns which coins is achieved cryptographically across these nodes rather than relying on a central trusted source like a bank.
Each transaction is broadcast publicly to the network and shared from one node to another. Every ten minutes or so, these transactions are collected together by miners into groups called blocks and permanently added to the blockchain. This is the definitive ledger of bitcoin.
In a similar way to how you store traditional coins in a physical wallet, virtual currency is stored in a digital wallet and can be accessed from client software or various online tools and hardware.
