Bitcoin is a system for transferring digital value without a central payment processor. The word also names the unit transferred. Its original design combines digital signatures, a public history, and proof of work to address the problem of spending the same funds twice. The original paper.
What exists on the network?
There are no physical coins moving between computers. Transactions consume earlier unspent outputs and create new ones. A wallet calculates a balance from outputs it can spend. Amounts are represented in satoshis: 100 million satoshis make one bitcoin. Transaction documentation.
You can think of an output as a discrete amount with conditions attached. A valid spending transaction must satisfy those conditions and obey the network’s other rules.
Where do new coins come from?
A valid block can create a limited amount of new bitcoin through its coinbase transaction. The permitted subsidy starts at 50 BTC and halves at specified block heights. The existing rules put maximum scheduled issuance just below 21 million BTC, once rounding to whole satoshis is included. Subsidy calculation.
This is a rule enforced by validating software, not a promise that bitcoin will have a particular market value.
What happens when you pay?
A wallet constructs a transaction and obtains the required signatures. It can broadcast the transaction to peers; a miner may then include it in a block. Confirmation is not instantaneous or guaranteed within ten minutes. Fees, congestion, and the random timing of blocks matter. Payment considerations.
What you should not infer
A public network does not guarantee privacy, a rising price, or protection from lost keys. An exchange can also introduce an intermediary even though the protocol itself does not require one. Those distinctions are as important as understanding the mechanism. Bitcoin.org’s introduction to the risks.
Continue with the blockchain, then keys and wallets.