Topic: Anyone have a simple explanation of Bitcoin even your Grandma would understand? - page 2. (Read 3594 times)

This is how I would explain it with 100 words.

• A currency.
• Created by computers.
• Maximum amount is limited.
• Not controlled by a government.
• Buy stuff with it if the seller excepts it.
• Works like other market shares; You can buy or sell them at current price.
• Demand controls the price.
• Everyone with access to a computer and internet can have one or several wallets.
• You can send it to anyone in the world who has a wallet.
• The content of each wallet is stored on the internet as a long history of transactions.
• Everyone can send them to your wallet but only you can send them from your wallet.

This is the beauty of Satoshi's gift of Bitcoin. By providing an alternative to the legacy system it makes one really question the basis of the whole system itself. Then once that is done Bitcoin's beauty shines even stronger.

Indeed. Bitcoin is right now probably used mainly for speculation, but it was never designed for this, it was designed to use as a currency, so we should advertise it as a currency, especially to the masses who don't want to speculate.

The most succinct explanation that distinguishes cryptocurrencies I've seen:

*********** they are the ONLY peer to peer system of electronic money that exists which does not require a counterparty ***********

(A counterparty is a "man in the middle").

What banks send to each other is not money - it's just numbers in an account. You're not actually sending anything, just reducing a balance at one end and increasing it at the other. So they are like a cryptocurrency exchange where you can never take your funds "off the exchange" at the end of the day.

Because banking is such an arbitrary operation (just changing a number in an account) it requires a huge counterparty infrastructure to give that number any value.

That counterparty infrastructure is toast now that cryptocurrencies have been invented.

This!

Start by asking her about money, and how stuff always got more expensive, and first ask her why she thinks that is.
This should lead into how politicians always lie. Aka if a politician says he is only going to print 1 million dollars, do you trust him?
Now there is this program for the computer that got created, and basically every computer checks that all other computers that are running this program aren't cheating. Under this principle, I know what the rules are and can verify, however I can't change the rules unless more than 50% agrees with me.
One of these rules is that there will be maximum 21 million coins.
Now what would happen if we increase the amount of coins, all other coins become worth less because there are more. (printing more money)
So if you have any of this money, would you want the maximum to increase? (aka you will never get 50% or more)

And if she knows how computers work, she'll ask how you prevent copy/pasting the money. (I don't expect you'll get this far but just in case) Then you can go into the distributed ledger and p2p. Explain how you can share files with bittorrent, without anyone holding a database of what is shared. She will most likely be able understand the concept of a hash at this point, a math function, which always gives a unique result. (you might need to do your research in how this is easiest explained) Once she grasps the concept of hashes, it should be a walk in the park the rest of the way (at this point I really suggest going through all of Satoshi's correspondence in the mailing list, he really had a knack for explaining things in simple english, his rephrase of Byzathine's General Problem, instantly make me understand the logic of the blockchain)

Note, its to big to understand all at once, first try to get the basic concept out, and work from there. (I needed 6 talks of an hour, to get my mom to understand it... and she got to the point of how to prevent copy/pasting, me started ranting about crypto... stopping pretty soon just ending with, trust me mom, I can't copy/paste this stuff, its next to impossible if not impossible. Which did the trick )

I'll try.

Bitcoin is a network of people who have agreed on a system to pass little pieces of data to each other. The design of this system guarantees that the passing of this data goes according to certain rules. For example, you can't pass on data that you have not received from someone else and you can only pass on the data once yourself. You see, it is like the pieces of data act like money (you can't spend money you don't have and you can spend money that you do have only once) and that is exactly how Bitcoin is used. The beauty of Bitcoin is that these rules are not enforced by a central entity (like a central bank for fiat) in secrecy but rather by the whole network in a fully automated fashion and for all to see. That means every single person in the network can actually verify that the rules have not been broken by anyone, ever.

 

That should do it, send her a PGP with a link for the github.

Older folks remember gold and silver as currencies.  In fact, the 90% silver Kennedy dimes and dollars are still out there, and are still worth as much as they were 50 years ago.  It was Johnson and finally Nixon who took us off the gold standard, followed by the explosive inflation and high interest rates of the 1970's.

Bitcoin is the money that cannot be printed after hitting 21 million.  There will be no printing presses running day and night making people's life savings worthless.

Just tell her

Grandma, bitcoin is nerd porn and I want to collect them all.

Kidding, and yes I know I botched ^ on purpose.

It is going to be hard to explain this to someone who doesn't understand the underlying concepts of how the network works. Notice I didn't say internet, you need to understand networking if you do truly want to understand bitcoin.

Could print out the source to bitcoind and have her read it.

Comparing it to physical items or investment ventures will just add confusion.

BTC is not physical nor is it intended as a investment vessel.

It's like gold or silver, but you can send it or spend it online without any fees.

the problem is that in order for her to understand how bitcoin works, she needs to understand everything other than BTC works, especially fiat.

Bitcoin is a e-currency, value is created by the technology that processes the transactions.

^ That should sufficiently explain Bitcoins without confusing anybody or delving too deep.
Words like decentralized just confuse individuals with smaller vocabulary's.

- Hey, grandma, since when do you remember the prices of food and things always going up?

- Oh, son, since always.

- And do you remember, besides how hard grandpa worked all his life, it was always very hard to save the money because everything keeps going up, until today?

- Yes, son. The poor bastard worked really hard.

- That's because since one hundred years ago our government keeps printing new money, when it needs, and the prices goes up, stealing from workers and savers, like grandpa.

- I imagine. Those motherfuckers! (My grandma swears a lot!)

- So, there's this new money that tries to fix that, it's a computer money. Controlled by machines, not people. And, in theory, the prices of things goes down or stays the same in the long haul when you use it.

- Computers?!

- I understand computers, you know that!

- Oh, son, you're really smart. I hope god gives you everything in double for everything you do!

- Thanks, grandma. It more than doubled already.

I showed that to my wife, all she got out of it was she could buy alpaca socks, lol

It's like a ration book, but you can only use it on your computer

https://www.youtube.com/watch?v=Um63OQz3bjo
I really like that explanation. Not only is it straightforward and easy to understand, it is a visual learning tool too. I don't know about others here but I get a lot out of having a video explanation also. If she is truly invested in learning about bitcoins she should be willing to sit through the video.

Try this one:

Bitcoin is like 21 million Kilograms of digital gold. Each Kg of this digital gold is called a BTC. You can have up to a 100 millionth part of it (eight decimal places). But these BTC actually only exist as balances associated with a bitcoin address. You send BTC between two bitcoin addresses just like sending emails and the network updates the balances of each bitcoin address in a public ledger that everyone has because it is replicated and updated by the network. What you keep is not actually coins but the private key that allows you to spend the BTC of your bitcoin address balance. You cannot choose your bitcoin address. What you can choose, or pick randomly, is the private key. You can know the bitcoin address of any private key but not the other way around.

During the first four years, people that help maintain and secure the network, processing transactions, get at least 50 BTC, every 10 minutes. Every four years this reward halves. Right now it is 25 BTC every 10 minutes or so. Before 2030, 20 milion BTC will already have been mined, that is, given as reward to people that help the network.

You sir have made my day.

Just tell grandma that it's just like how she and grandpa used to go to free concerts to protest the government and marched in the street. My generation protests with money and we're too lazy to go outside so we use a computer. "Our way is better grandma because we don't have a baby 9 months later and name it Starshine or Moonflower."