I would focus on two ideas:How are bitcoins created?Everyone on the network competes to be the first solve a computationally hard puzzle. The winner is rewarded with 50 new bitcoins. Puzzle difficulty is automatically adjusted so it takes about ten minutes to get a solution, creating a slow, manageable increase in the supply of bitcoins. The 50 bitcoin reward gets halved every four years, so the total number of bitcoins that will ever be created stays under 21 million.How are bitcoins transferred?Bitcoins are associated with cryptographic public keys controlled by the person who owns them. To transfer them to someone else (i.e. to make a payment) he broadcasts on the Bitcoin network a digital signature identifying the bitcoins he is transferring, along with the public key of the new owner. This information is stored in a distributed database maintained by the Bitcoin network that records the public keys that own every bitcoin. Bitcoin software validates the digital signature and updates the database to record the new owner of the bitcoins. He will then be able to transfer them to someone else in the future.Note that I am not trying to explain how these two ideas are connected, via the block chain. That's just too hard to get across quickly.