bitcoins are generated by a competitive and decentralized process called "mining". This process involves that individuals are rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange. That's how it is.
this is the best explanation you can get.,
bitcoins are virtually generated by keeping your computers or ASIC miners running , while these machine i.e. computers runnig bitcoin client or ASIC, try to do some very complicated encryptions, which in turns verifies the transactions made using bitcoin network and for that they receive the reward wihcih is part of bitcoin.
hope this helps.,
