Disc brakes on bikes use a very similar technology to disc brakes on a car. Smaller, lighter, but similar.

But, it only works for BMX racing - or dirt. You can't use it on street, vert, or flatland. This is because the disc hangs out beside the rim/spokes and you would end up grinding directly on it or stepping right on it and messing it up pretty badly, very quickly.

Drum brakes are actually a great technology as well, but then you run into weight and reliability issues.