How Bitcoin Works (Simplified)

Imagine a notebook where every financial transaction ever made is written down, and thousands of people around the world each have an identical copy of this notebook. Every time someone makes a new transaction, everyone updates their copy simultaneously. If someone tried to cheat by changing a past entry in their copy, it would not match everyone else's copies, and the fraud would be immediately detected. This is essentially how Bitcoin works — except the notebook is digital and the 'people' are computers.