Explaining Crypto

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Avatar for onlymythoughts
3 years ago (Last updated: 2 years ago)

I heard about cryptocurrencies first when the Mt. Gox exchange was hacked in 2011. I didn't understand much about it then. I have learnt a lot more about it since and I am often asked about it by other people.

What I have noticed is that however much I try to explain some people just don't get it.

When I try to explain and the conversation usually goes something like this:

Question: What is Bitcoin?

Answer: Bitcoin is a digital currency

Question: Can I spend it?

Answer: Of course you can even buy gift cards for high street shops with it using 'bitrefill' for example.

Question: Where does it come from? Its worth nothing its made out of thin air!

Answer: Bitcoin is mined using powerful electronic mining rigs.

Bitcoin miner

Question: But what do they mine?

Answer: They are confirming transactions by verifying blocks on the blockchain.

Question: What is a blockchain?

Answer: Its a public ledger of all the transactions that ever took place for that particular cryptocurrency.

Question: Where do I keep it?

Answer: In a digital wallet

Question: How do I get one of those?

Answer: You can create your own paper wallet, or download an app from the 'Play Store'

Question: What is the Play Store?

Answer: It is an app store where you can download apps to your phone.

Question: Oh I see, but I don't have a smartphone.

Answer: Then you can go online and create your own paper wallet and private key.

Question: But where is the bitcoin?

Answer: It will be stored on the blockchain but you can only spend it with the private key.

After all that, the conversation goes.

I don't think I will bother, its all too complicated at least my money is safe in the bank, and its real money!

I then reply, "real money, but based on what, the government can print more money, decreasing what your money is worth by the day because of inflation, bitcoin is anti inflationary the supply is limited it will always be worth something as long as someone else sees that it has a value its simply a case of supply and demand!"

Then I often find that the conversation goes like this.

Ah I see, but I still don't get it, can you run all that by me again!

Then I simply say, "Not right now, another time."

I wonder if any others have had difficulty explaining cryptocurrencies to people? I would be interested to hear.

My own article

Pictures courtesy of pixabay

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3 years ago (Last updated: 2 years ago)

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