Bitcoin is a software-based online payment system described by Satoshi Nakamoto in 2008 and introduced as open-source software in 2009. Payments are recorded in a public ledger using its own unit of account, which is also called bitcoin. Payments work peer-to-peer without a central repository or single administrator, which has led the US Treasury to call bitcoin a decentralized virtual currency. Although its status as a currency is disputed, media reports often refer to bitcoin as a cryptocurrency or digital currency.
You can read more about it on Bitcoin wiki
In online gambling, Bitcoin becomes one of the most popular form of payment, both for players and for brands. It’s not a secret anymore that Bitcoin and other Crypto Currencies are a great solution for online gambling due to anonymity, fast transactions, and popularity among players.
This digital currency’s inherent characteristics make it a favorable payment system. It’s basically a form of code that’s stored in the users’ computers, making it untraceable. Also, it allows you to make transactions anonymously and enables you to enjoy almost-instantaneous transactions processing.
Unfortunately, there are dishonest companies in the Bitcoin gambling industry, just like anywhere else. Some casinos will take advantage of new players and run off with their money.