There is a lot of misunderstanding and confusion when it comes to bitcoin. Mainly because it is relatively new and now it became popular in the mainstream media there have been lot of here say of how the bitcoin works.

I am new when it come to bitcoin but I have read some articles about it. This is basically what I understand correct me please if I am wrong
I have read that it is not a code or a data that can be stored and downloaded but it is more like a mutual agreement. Is that right?
And that all transaction is stored in the blockchain, which is a connection of all the computer which is running a bitcoin client.

This how I understand bitcoin.