I understand when you start up the bitcoin app, it must download the blockchain which is why it is laggy at first. What exactly is this blockchain?
All help is greatly appreciated!
All transactions that have occurred since the creation of Bitcoin are stored in the block chain. A copy of the block chain gets downloaded automatically to your system once you start your Bitcoin client. Currently, 149520 blocks have been created, so it may take a while to download all of them.
It is expected that future versions of Bitcoin will address this issue, so that Bitcoin scales better, even for low memory, low storage devices.