From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them. This is how Bitcoin works for most users.
Behind the scenes, the Bitcoin network is sharing a public ledger
called the "block chain". This ledger contains every transaction ever
processed, allowing a user's computer to verify the validity of each
The authenticity of each transaction is protected by
digital signatures corresponding to the sending addresses, allowing all
users to have full control over sending bitcoins from their own Bitcoin
In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This is often called "mining".
Source : Bitcoin.org