Bitcoin has two meanings. Bitcoin, with a capital B, is a software protocol, or a set of rules. The monetary unit is bitcoin with a lowercase b, or BTC.
Bitcoin is based on a field of computer science known as applied cryptography. The encryption algorithm used by Bitcoin is so secure that the US government requires its use for highly sensitive information.
BTC is viewed similar to gold because people consider it rare, valuable, and not created from a balance sheet of a financial institution.
BTC is scarce because the supply is capped at 21 million BTC. Anyone can own it and as it becomes easier to buy and understand, the demand will rise and FOMO will kick in. Since the supply is limited, the price will increase.
To understand how Bitcoin is transacted, it's helpful to compare it to email.
With an email address, anyone can send you a message and attach data. However, only you can open the email and access the data because you have a password.
When you own bitcoin, you also get an address. This is your public key. Others can send BTC to your public key. You also have a private key, which is your password. This gives you exclusive access to your BTC account.
Go to CoinDesk's Crypto Explainer+ to learn more.