What are bitcoins?
Bitcoins are the unit of currency of the Bitcoin system. Bitcoin is like email for money. Imagine you can send money over the internet directly to an email address to anyone, anywhere in the world nearly instantly. Bitcoin allows that. Bitcoin is a new way for people to consensually trade value without trusted third parties.
Bitcoin is similar to a Dollar, Euro, Yen, or Pound except they require a third party. A commonly used shorthand for this is “BTC” to refer to a price or amount (eg: “100 BTC”). There are such things as physical bitcoins, but ultimately, a bitcoin is just a number associated with a Bitcoin Address. A physical bitcoin is simply an object, such as a coin, with the number carefully embedded inside.
Bitcoin is a peer-to-peer system. This means that it does not rely on a central authority such as a central bank, a large corporation, or a large government. The bitcoin network is distributed among the people who run the bitcoin software. The benefit is that no longer can a government seize your money from your bank account as happened in Cyprus in 2013. Your money really is your money. Another benefit is that there is no inflation of your money so the government can not take your money through the hidden tax of inflation.
The bitcoin software is free, and open source which means anyone can look at it and verify that it does what it says. It can be verified that there are no backdoors for government spy agencies or anyone else. Likewise, Bitcoins can be transferred anywhere in the world within minutes for free or extremely low cost compared to wire transfers, credit cards and other systems.
The Bitcoin Directory lists Bitcoin Exchanges where you can convert fiat money (Dollars, Yen, Euro, Pounds etc) into Bitcoins. You can also mine bitcoins and there is a list of mining pools here. You can also earn bitcoins, some sites are listed here.
in short, bitcoin is to email what Euros, Yen, or Dollars are to regular mail, a big advance because they can be sent anywhere extremely quickly, require no third party, and avoid the problem of governments taking your money.