Ordinary money is physical like a coin. Bitcoin is like a coin stored on a computer, it is computer money.

When you see ordinary money on a computer, it is basically physical money that is in a bank. But computer money is actually on your computer.

With ordinary money, the government decides how much money there is.  With computer money, a computer formula tells you how much money there is.

With ordinary money you almost always know who you are doing business with. But with computer money you don't need to know who the person is, you just need to connect to his computer.

With ordinary money the government can easily tell how much money you have and how much money you should pay the government, because that money is in a bank. With computer money it is difficult since that money is on your computer.

With ordinary money you need to pay a fee when you send money because the money has to go from one bank to another and those banks have fees. With computer money you don't need to pay a fee because the coins go directly to the other person's computer.

So with ordinary money you need governments and banks, but with computer money all you need is your computer!

This isn't quite true anymore, but it is the closest approximation of the truth I think that would make sense to a small child.