I am going to try to make it as simple as possible.
There are two guys, Hulk & Batman.
Batman wants to transfer 1,000 rupees to Hulk.
So, Batman goes to his bank in Gotham and transfers 1,000 rupees to Hulk’s bank account in Ohio.
Now, the bank cashier will make a note of the transaction, either in a cash register or an online data sheet. He will give it a transaction number, and also note down the name of the two parties involved.
Understand the fact that whenever you transfer money, the bank is the third party which gets involved to note down the credentials of the transaction.
What if there was no bank required to make a transaction?
So, when Batman transfers money to Hulk through Bitcoins, all the information related to it is handled by a blockchain.
A block chain is a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly.
It is a continuously growing list of records, which has the time stamps and transaction data.
Now, to maintain the block chain, or the list of records you need a network. A network of people who ensure the transactions are securely taking place and there is no disparity.
These people are our miners, who use their processing power to maintain security of block chains and to ensure that they keep working properly.
Miners are rewarded as well when they help maintain the block chain system.
So, basically, Bitcoin as a digital currency eliminates the need of a third party like a bank server, and makes it decentralized. Nobody controls the movement of money this way.
Not even Hulk or Batman!