How To Explain Bitcoin To Your Parents
Explaining Bitcoin to anyone takes a long time, and it depends on the level of engineering competence of who you’re talking with. But what’s the best way to explain Bitcoin to your parents?
With the Bitcoin (BTC) price edging towards a new all-time high, it’s inevitable that more people will become interested in it. All Bitcoiners would love their parents to get into Bitcoin, but how do you explain it to a generation that didn’t have computers at school?
There’s no point explaining all of Bitcoin’s technical jargon to an aging boomer. Somebody who thinks email is the latest tech, simply won’t get the necessity of value built into a decentralized, immutable protocol, secured by a proof-of-work SHA-256 algorithm.
Now I’m not saying all our parents aren’t tech savvy. Depending on age, some of them will have had some IT education, but your average boomer has a laptop or smartphone and as long as they can navigate their way around the Internet, that’s all they need.
Same with the Gen X. By the time Gen X left school, the Internet was just becoming something, but most Gen X parents don’t even care how the Internet works. They use it for Wikipedia, Facebook, or the bored ones might even be swiping right on Tinder. Not my dad. Or mum! At least I hope not.
Most of them (or millenials for that matter) don’t care how the Internet protocols work. As long as its use is understood, that’s all most people need.
So to explain Bitcoin to your parents in a technical sense isn’t completely necessary. I’m not saying you should dumb it down fully, but offering BTC as a big picture will work best. So, for the best way to explain Bitcoin to your parents, read on…
How To Explain Bitcoin To Your Parents
Bitcoin Is Proper, Hard Money
First thing to explain about BTC is its proper money feature. No doubt, they will say the dollar, pound or euro is proper money. But this is where should stop them and have a Q&A session about the properties of fiat currencies.
- I thought money was backed by gold? (It used to be, but it came off the gold standard in 1971).
- What is fiat backed by? (Faith in government, tanks and bombs).
- If they can print it at will, where does it get its value from? (Faith in government, tanks and bombs).
- Why do they tax us if they can just print as much as they need? (You tell me. Because they want to keep us on the breadline, probably).
- Why would they print so much and devalue our good money? (Because the system is based on debt, and the more they devalue our currency, the cheaper it will be for them to pay back the debt. And prices of goods will rise so they can get more off us).
Once you have satisfied them that the money in their pocket isn’t really worth what it says it is, you can then explain Bitcoin to your parents, making sure you start with its hard money feature.
Bitcoin’s Inflation Is Controlled, Secured and Worked For
Every Bitcoin can be divided into 100 million, and each piece is called a satoshi, after Bitcoin’s creator: Satoshi Nakamoto.
Explain to your parents that every bitcoin created costs money to create. Not one extra bitcoin can be manipulated into existence, unlike our “faithful” government money. Nobody can print it to pay for debt, wars or corrupt politicians.
There are about 18.5 million BTC in circulation now, and every day there is a controlled inflation added to the total. The newly minted BTC are the only way new bitcoins are entered into the network.
These new BTC are mined into existence by specialized computers, which anybody can run and earn some bitcoins. It’s all of these mining devices that verify the Bitcoin transactions and add them all to the blockchain.
The miners are paid for the work through a small transaction fee and the newly minted bitcoins. This works out at 900 BTC a day, or to be more accurate 6.25 BTC for every block.
This payout is called the block reward, and it is cut in half roughly every four years. The last one was in May 2020, and the next one will be sometime in 2024 when the block reward will be cut to 3.125 BTC. These ‘Bitcoin Halvings’ will continue until the last fraction of a Bitcoin is mined in around the year 2140.
The supply shock is another reason behind Bitcoin’s uniqueness. It’s all coded into the Bitcoin program, and it ensures there will never be more than 21 million bitcoins.
That will never change, because the computer program is secured by the thousands of different devices that run it. These are called nodes, and they work together with the miners to help verify everything that is added to the Bitcoin blockchain.
For anything to change in the Bitcoin program, there has to be a majority consensus among the nodes. And only then will it change.
Things do change, such as updates to the Bitcoin program, but only when the nodes are in at least 51% agreement.
The thousands of nodes and millions of mining devices work together and secure the Bitcoin network. Their processing power combined makes Bitcoin the most powerful computer network ever created.
A perfect environment for hard money and to store value.
Gold Is Also Hard Money, So Isn’t It Better Than Bitcoin?
Our parents were brought up on the belief that gold is a great store of value because it’s a hard and scarce asset. And while that’s true, Bitcoin is better than gold at both of those features.
Gold is a hard and scarce asset, because its worked for and the amount of gold in circulation can’t easily be manipulated.
People have relied on gold’s properties as a hard asset for a long time, and it was the best store of value we’d had for Millenia. Until we got Bitcoin.
Gold has been the de facto store of value because of its scarcity, and faith that unlike government paper notes, it can’t be created out of thin air. That’s true to a degree.
We don’t truly know how much more gold there is to be found. And the truth is, we don’t even know how much there is already in circulation.
Gold is scarce because we believe it to be, and it is more scarce than any government currency, but its scarcity isn’t exactly verifiable.
Imagine if there was a massive gold discovery tomorrow. It would dilute gold’s scarcity and weaken its value immediately. Unlikely, but not impossible.
Also, gold can be made by putting the right elements together. The reason it isn’t made now is because its too expensive, but what happens if gold shoots up to $10,000 an ounce?
Of course humans will start making more gold to cash in, and ultimately dilute its scarcity and value.
With Bitcoin we can check the immutable blockchain and can absolutely guarantee how many BTC there are. We can also say for certainty how many there will be at any time in the future.
There could be a major gold discovery at any time, and if it becomes profitable, gold can be created.
As we know Bitcoin is secured by the most powerful and secure processing power and the circulating supply can always be verified. And there can never be any more BTC created, even if the Bitcoin price goes up to $1 billion per BTC.
Bitcoin Is Better Than Gold, Full Stop
Gold is a reliable store of value, but if you have a lot of it, it can be difficult to secure and transport. Imagine a billionaire wanting his gold shipped from the Swiss vault its stored in to his home in Los Angeles. It will take a lot of work, time and cost.
You can send Bitcoin anywhere at anytime and to anyone, at a fraction of the cost and time.
And how do you know you’re buying legitimate gold? It has to be tested to verify its validity. I’m not saying gold is useless because it could be fake, but Bitcoin (BTC) cannot be fake. It’s all verifiable on a public and immutable database.
Selling gold is also painstaking. You have to trust the person buying it, and if you have a lot, selling it is not easy. What if you want to sell it in an emergency on a Sunday afternoon or Christmas Day? You can’t because the gold dealership will be closed.
Bitcoin never ever closes. You can buy, sell and trade it 24/7/365.
Bitcoin Is Better Than Gold, But Is That It?
So, you’ve explained Bitcoin’s strengths compared with gold’s, but how about Bitcoin’s other strengths…?
Bitcoin is a peer-to-peer currency that allows anybody to send any amount of value anywhere in the world in a matter of minutes.
And with the advent of the Lightning Network, you can actually send BTC in milliseconds for a fraction of a penny. It’s working now, but it’s a little bit awkward, and not many people in the west are using it.
However, in places like Argentina, Turkey and Nigeria they’re already using Bitcoin as a peer-to-peer currency, because people are fearful of keeping value in their government currencies.
Things like the Lightning Network isn’t such a hassle in those places because it’s giving their people a chance of investing in and paying for things in a currency that isn’t going to devalue over the long term.
In the west where things seem stable, the Lightning Network and BTC payments are the future, but in many developing nations with failing currencies, Bitcoin is already a lifeboat.
Where Can I Spend Bitcoin?
Bitcoin is spendable in many places. Of course, it’s not as accepted as widely as government fiat currencies, but there are thousands of merchants that accept BTC.
The following retailers are some of the biggest already accepting Bitcoin as payment: Microsoft, Overstock, Home Depot, Wholefoods, Namecheap, and Starbucks…
There are thousands more that accept BTC, and many charities too. But the thing that is probably holding Bitcoin back as a payment currency is its success.
Who wants to spend BTC when they think it’s going to appreciate in value?
Most people have heard of the Bitcoin pizza guy, who infamously bought 2 Dominoes pizzas for 10,000 BTC. Back then, it was worth much less, but in today’s Bitcoin to USD exchange rate, those pizzas are worth $181 million.
It’s probably a good idea to hold on to your Bitcoin just in case it catches on a bit more.
Where Can I Buy Bitcoin?
Ok, so now you’ve explained the basics of Bitcoin to your parents and they want to buy some. How do they go about getting hold of some BTC?
There are thousands of platforms to buy Bitcoin on and it’s really quite simple. With most exchanges you have to sign up with an email and phone number. Verify your account with a passport, and you’re pretty much good to go.
Some platforms don’t require a passport, but you’ll be limited to how much you can buy. And if you want to buy Bitcoin anonymously, there are ways to go about it.
You can also buy Bitcoin from peer-to-peer marketplaces. These are different to exchanges in that they bring buyers and sellers together, and the marketplace acts as a mediator between the two.
On Bitcoin marketplaces, you can buy BTC with pretty much any government currency going. You can even buy Bitcoin with a Walmart MoneyCard, Amazon Gift Card, Air Miles, or whatever the seller is willing to accept.
You can also buy BTC at specialized ATMs. There are over 10,000 Bitcoin ATMs around the world, and pretty much every big city has at least one. Check out this Bitcoin ATM map for the nearest one to you.
However you choose to buy Bitcoin is completely up to you. The links above are our reviews of the platforms. We at Bitcoin Maximalist might earn commission if you sign up through our links, but we recommended those platforms for good reason, because they are the safest and most liquid platforms to buy and sell Bitcoin.
How To Explain Bitcoin To Your Parents
Understanding Bitcoin can be take a long time, but to explain Bitcoin to your parents needn’t be a full on deep dive, detailing all the technical jargon.
Parents only need to know the monetary and security aspects of Bitcoin, so don’t over explain.
Bitcoin is a computer program and network. It’s main application is the currency, or store of value that we all think of when we say the word ‘Bitcoin’.
It is the most secure network ever created, and it is the only verifiably scarce asset ever. It cannot be manipulated or inflated, because the processing power that secures it, wants what’s best for it.
It is better than gold at what gold has done best for Millenia, and the more people build programs on top of it, the better and smarter Bitcoin will get.
Gold will always be gold, but Bitcoin will evolve as time goes by and might just become the network that quite a large percentage of global wealth is stored in.
As the creator of Bitcoin, Satoshi Nakamoto said: ‘It might make sense just to get some in case it catches on.’
Read More: Pablo Clarke