Bitcoin refers to a type of digital currency known as a cryptocurrency, as well as the peer-to-peer system on which it relies. Bitcoin describes itself as “an innovative payment network and a new kind of money”.
Cryptocurrencies are based on principles of cryptography and generally entail complicated mathematical equations which need to be solved in order to generate each unit of the currency (such as a bitcoin). The number of potential units is finite and it’s extremely difficult to manipulate the speed at which the currency units are created. In theory this inherent system of control should make cryptocurrencies more stable than traditional currencies which are subject to radical government manipulation, such as through quantitative easing (printing money) which naturally leads to inflation as the currency quickly becomes less valuable.