A bitcoin is basically an algorithm-based mathematical construct; a unit of measurement for the purpose of quantifying value. In this way, a bitcoin is a bit like a penny, but unlike a penny (or any other form of fiat money), bitcoins are decentralized. The original Bitcoin algorithm was created by a developer with the pseudonym Satoshi Nakamoto, but the currency itself is created, traded and regulated by users rather than by any central authority such as a bank or state. Bitcoins are also completely digital: you never get a physical bitcoin in your hand unless you buy a physical reproduction.
The Bitcoin system is designed so that a finite amount of potential bitcoins exists. The algorithm that is the basis of the Bitcoin network is designed to generate a maximum of 21 million bitcoins, and the system automatically regulates itself to ensure that the holding grows steadily.
At the current rate, all 21 million bitcoins should have been generated by 2140. And since the Bitcoin network tracks and logs every single bitcoin transaction, you can actually see exactly how many bitcoins have been created at any given time. This information can be found on the Blockchain.info website that monitors the Bitcoin network and hosts Bitcoin wallets in which users store their digital fortunes.
