Bitcoin,first cryptocurrency started in 2008 by Santoshi Nakamoto is currently one of the fatest growing payment system. It works on peer-to-peer basis where there are not intermediate bank or authority to keep track on transaction. Transaction in system are verified by network nodes which are recorded in public distrubutor ledger referred to as block chain. Each ledger uses Bitcoin as own unit of account. Since bitcoin does not have a centralized repository or single adminitrator who keeps track on transaction there is need for a system which could help in regulation of new bitcoin and even keeping track on bitcoin transaction between the users.
Bitcoins are generated as a reward for payment transaction records where users are paid in bitcoin of keeping track of transaction made in bitcoin between different users of bitcoin.This is referred to as mining and miners are rewarded with transaction fee and newly created bitcoin by the system.
The main reason for the success of bitcoin is less then 2-3% of transaction fees compared to that of credit card.