A cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
When Bitcoin was announced in late 2008 it was defined as a “Peer-to-Peer Electronic Cash System". The key invention being a completely decentralized digital cash system that didn't have to rely on a central bank or any authority to function. It was the first successful attempt at a digital currency and since then there have many different cryptocurrencies have been created and launched.
[Must-watch video] Great video explaining the basic concept of how the Bitcoin works on a blockchain. Covers how transactions are stored, why and how Bitcoin is decentralized and how double-spending is prevented.