Bitcoin is a virtual currency that, like any other currency, can be bought and used at places to buy something or perform a transaction. The interesting part about Bitcoin is the technology on which it works, the blockchain. It is one of the reasons why Bitcoin is gaining momentum when it comes to gathering people's confidence and also assuring some governments of its feasibility.
The problem, which Bitcoin partly can solve, lies in the simple fact that today if a person wants to perform a transaction then that person has to go through a 3rd party.
This method adds a somewhat unnecessary middleman who also takes some commission for facilitating the transaction. All of this is quite cumbersome.
There is a solution, however, it is not entirely foolproof. You can maintain a certain record say a paper, a ledger or a register in which you maintain or keep a record of the transactions that you have performed. This will help you be more organized but chances are that ledger, register or paper can be misplaced or be stolen.
To try and prevent that, you could make copies of that ledger, paper or register and even add a seal to it. Now, when you do all of this digitally, you get what we can call the blockchain.
Think of the single page as representing a single transaction, a block, and the folder in which all of "pages" (blocks) will be kept will be a continuous chain of blocks and thus being called the blockchain...