Note: would you rather watch videos instead of reading a bunch of text? Then check out the Top Five Videos that Explain Bitcoin (Fast), or for even more details, the Best Technical Videos On How Bitcoin Works.
The way Bitcoin works is what differentiates it from all other payment systems and currencies. Bitcoin is software that tracks and verifies transactions on a public ledger over a peer-to-peer network. Operations and data associated with Bitcoin are decentralized, meaning they are not performed or stored in one single location. Instead, the Bitcoin network consists of computers across the world that automatically store and relay Bitcoin data to each other. The computers’ owners voluntarily choose to use and run the Bitcoin software. Anyone can use and run Bitcoin software.
Decentralization is one of the key features that makes Bitcoin exceptional: it is extremely difficult for any single person or authority to control Bitcoin.