Bitcoin is a peer-to-peer decentralized digital currency. It differs from traditional, government-backed currencies in that there is no central issuer, and there are no middlemen involved for various transactions. Back in 1998, the concept of crypto-currency was described by Wei Dai on a cypherpunks mailing list.ith a traditional fiat currency (think the U.S. dollar or the Euro), a central bank (like the Federal Reserve) issues currency. That's not the case with Bitcoin. Instead, coins are generated using a process called mining.