Bitcoin is a relatively new method of transferring value over the internet, without going through any bank or clearing house, or trusting any single entity. Bitcoin only exists inside computer systems, so it’s a pure Digital Currency, or CryptoCurrency as it is also called, because it is heavily based on Cryptography.
Bitcoin was the first of its kind and since its inception other similar coins have been developed. We usually refer to these coins as cryptocurrencies. Bitcoin and other cryptocurrencies are based on a technology called Blockchain or Distributed Ledger Technology (DLT for short). This technology is considered by many revolutionary, because it facilitates any kind of peer to peer transaction (not only financial) without the need for a trusted third party.
Bitcoin and other cryptocurrencies can be traded for fiat currencies, like Euro, Dollar, etc. It can also be used to pay for goods and services.
You can read more on how it works on BitcoinX.gr (only in Greek for now).