It must be said that trying to explain Bitcoin can sometimes seem more difficult than herding cats. Its as though someone had come up with this brilliant idea after a particularly heavy session and then forgot half of the idea.
Virtually everyone will find it a difficult concept to grasp so the following analogy may go someway to helping explain it.
Imagine playing a betting game where all the players have no money. So you decide to keep a record of all the bets lets call it a ledger. But in this game no one trusts anyone else so everyone involved in the game keeps a ledger of the bets that take place.
When the game ends the ledgers are compared to see if all the records agree, this Eliminates cheating.
The best part of the ledger is that the anyone can view the ledger at anytime. To add a transaction to the ledger all that needs to be done is to broadcast your transaction(s) to the keepers of the ledger and pay a fee, as small or as large as you wish to put your name down on the ledger. That is the advantage of the ledger not being exclusive.
The ledger keepers are compensated for their efforts by payments as a reward for keeping the ledger up to date. This money comes from an external pool of money and
Although this is a simple analogy of how Bitcoin works, although the reality is rather more complicated as Bitcoin works on a global network called a blockchain and each new transaction is added to the blockchain as part of a block.
The ledger keepers are known as miners.
