How Do You Explain Bitcoin to Non-Technical People?

[ranlo]

Hey all, I could use some help with this. I've worked on bringing more people on-board with the Bitcoin system because I believe in it. What I'm finding tough, though, is how to explain it to non-technical people.

Every time I try, I just get blank stares and an "I have no idea what you mean" type response. And from there, I really don't know how to break it down. I'm hoping someone here has been more successful than me and can help explain it.

Thanks guys.

[1714030114]

1714030114

[Chet]

Start with a basic understanding of money.
Use real world examples of things they do, like fees they pay just to use an atm, or how long for a check to 'clear' in the bank and compare it to using bitcoin for the same action.

[justusranvier]

https://bitcointalk.org/index.php?topic=94883.0

[glendall]

I have a hard time with this as well.

I think I could reasonably outline Bitcoin in a paragraph or two. But when friends ask me about how it works, all I can do is mumble something about 'cryptography' and basically just say its a 'online currency based on codes' which doesn't do it all nearly enough justice.

[Gabi]

Good luck, it's impossible in my opinion. Mostly because if they are "non technical" it means they have no will to learn how new technologies works. So, good luck 

[ranlo]

Rofl, from just's link:

-----
"So the new strategy is that whenever you're introducing Bitcoin to someone, don't try to explain how it works, or why it's so amazing. Just say, "it's magic computer money."

Also, when users open up the Satoshi desktop client software, there should be a new splash screen that flashes black and yellow real fast for about 5 seconds and it should say "MAGIC COMPUTER MONEY"
-----

Chet, I've tried that (especially explaining things like the almost no fees, which is great for stores and such). Then the question comes along to how it works. Making money out of thin air that (technically) has no value is a very tough thing to explain. I've used things like Native Americans trading pots as a form of currency as an example. The pots had no true monetary value, but there was a perceived value.

Glen, same issue here!

Gabi, this is definitely possible but we need to find a way to get it in an easy-to-understand way. The mainstream isn't that computer literate. People know how to use their computers for basic tasks (Facebook, email, etc.) but most don't go much further than that.

[dancupid]

Just say :

"a year and a half ago I invested $x in something and now it's worth $40x"
-"really?"
"it's quite technical and difficult to understand, so I wouldn't recommend you invest"
-"but what is it?"
"It's called Bitcoin"

They will then put in the work themselves and find out everything about it and make their own educated decisions.

[Lethos]

Don't try to explain to them any of the technical aspects of it - other than to say the security is more than your bank uses probably.
Don't explain to them Bitcoin mining - It is far too technical for this demographic.

First Step
Explain about how it is a digital currency, using as a exchange medium for instant transfers.

Second Step
Explain the benefits of how it can't be reversed & you control it, not a bank.

Third Step
Explain how you buy and sell Bitcoins via Localbitcoin & other exchanges.

Final Step
Show how this saves money in the long run on transfers that usually cost money. Also you can use it to stash money away.
You can actually make money just by holding it and waiting till price goes up.

[ranlo]

Don't try to explain to them any of the technical aspects of it - other than to say the security is more than your bank uses probably.
Don't explain to them Bitcoin mining - It is far too technical for this demographic.

First Step
Explain about how it is a digital currency, using as a exchange medium for instant transfers.

Second Step
Explain the benefits of how it can't be reversed & you control it, not a bank.

Third Step
Explain how you buy and sell Bitcoins via Localbitcoin & other exchanges.

Final Step
Show how this saves money in the long run on transfers that usually cost money. Also you can use it to stash money away.
You can actually make money just by holding it and waiting till price goes up.

Couple things (criticism) based on your steps:

1) Good point

2) This is something I hadn't thought of bringing up. The fact that if you are selling something, you can't have the person do a chargeback once you have the funds

3)This one may be a little tough. We need a real newbie-friendly exchange. Things can go wrong in the "local" exchanges (just like they do with people on Craigslist)

4) Transfers (ACH) should be free. A question is if these coins will cause prices of items to go down (since there's no longer the 3.9% + 0.xx fee credit card companies normally charge) over time. And while the value can go up, they can also go down...

[Gabi]

+1 to what dancupid and Lethos said, good suggestions!

[ktttn]

Bitcoin is a balance in a public list called the blockchain. Really huge combinations of secret numbers own the balances. The short huge number (example) is your address, which recieves btc, and works like a 1$,50$, or 100$ bill, only with 0.00000001btc as the lowest denomination. The longer number is your private key, which lets you spend btc.
New btc are made when the blockchain is updated with compressed new records of btc spends.

Someone willing to revise this?

[porcupine87]

For me it was hard to understand, too, although I had basic understanding of what money is and crpytpgraphy. Now, when I try, I always explain, that Bitcoin is decentralized currency with a central protocol (rules) and central log-register, with decentral storing. In that register are all transactions stored which determine, how many coins belongs to what adress. Everyone can create as many addresses as he wants. So although everybody can look up every transaction, noone can associate them with the real person. Through cryptography it is possible, that a real person can proof what address belongs to him with reavailing the real indentity.

And then I try to show this register with blockchain.info and encourage them to open a wallet at blockchain.info.

[ranlo]

Thanks ktttn and porcupine. Both of those are awesome.

How would one explain the "safety" of the coins? For example, a lot of people suggest storing the coins on your own computer. This means if people take in their PC for repairs or sell them, they are risking losing everything. Plus people can get viruses that take them.

I know it's a lot to think about, but I'm thinking about this as a newbie. We really need to get things into "layman's" terms in a way that people have confidence. If they don't have confidence, they won't jump on board.

[Gabi]

Non-technical people probably have infected computers.

[ranlo]

Non-technical people probably have infected computers.

See, that leads to even more problems. It's kind of making me wonder if maybe getting mainstream isn't going to be possible without getting people more educated on how computers work and ways to be safe.

[ktttn]

Non-technical people probably have infected computers.

See, that leads to even more problems. It's kind of making me wonder if maybe getting mainstream isn't going to be possible without getting people more educated on how computers work and ways to be safe.

Ignorance of the structure behind a casascius coin's worth might suffice for now, if that's the best safest medium so far.
Edit: The wallet and security is one subject, the blockchain is another, and exchanges might be the third.

[Gabi]

Non-technical people probably have infected computers.

See, that leads to even more problems. It's kind of making me wonder if maybe getting mainstream isn't going to be possible without getting people more educated on how computers work and ways to be safe.

Right, we need more infrastructures and devices.

A hardware wallet could fix this. All the private keys are only on the hardware wallet/paper wallet, then that hardware wallet create transactions wich are sent to the computer/smartphone and sent over internet. Even if the pc is infected, it can't stole anything from a transaction.

[porcupine87]

How would one explain the "safety" of the coins? For example, a lot of people suggest storing the coins on your own computer. This means if people take in their PC for repairs or sell them, they are risking losing everything. Plus people can get viruses that take them.

I think therefore you have to explain something with the public-private-key-architecture. One address is a public key and everybody can see it. When you create an addess you create a related private key, which no one knows. This key is a long number stored at you computer, so you should store it on a place where no one can spy it out (malware), but not accidently delete it. Because the public key can be seen as a post box, which only can be opened by the private key. So when Alice wants to send 5 BTC to Bob, she goes to her box, which only she can open and take the bitcoin in here pants pocket. Then she takes a ride to Bobs place and throw the bitcoin in his post box. Now the bitcoin belongs to Bob and only he can spend it, because only he owns the key to that post box.

Of course, nowadays post boxes are digital. Today you send emails no letters.

Like the house key the owner can make a spare key. I would recommend to store the key in different places (usb sticks) in different ways. I have my bitcoins on 2 usb sticks. Onytime stored in a truecrypt container, the other one with a brain wallet. The crucial part is to remember the (unique) long password. But that is only reasonable for greater amounts (which I don't have, but maybe in the future so I want to test )

[ranlo]

How would one explain the "safety" of the coins? For example, a lot of people suggest storing the coins on your own computer. This means if people take in their PC for repairs or sell them, they are risking losing everything. Plus people can get viruses that take them.

I think therefore you have to explain something with the public-private-key-architecture. One address is a public key and everybody can see it. When you create an addess you create a related private key, which no one knows. This key is a long number stored at you computer, so you should store it on a place where no one can spy it out (malware), but not accidently delete it. Because the public key can be seen as a post box, which only can be opened by the private key. So when Alice wants to send 5 BTC to Bob, she goes to her box, which only she can open and take the bitcoin in here pants pocket. Then she takes a ride to Bobs place and throw the bitcoin in his post box. Now the bitcoin belongs to Bob and only he can spend it, because only he owns the key to that post box.

Of course, nowadays post boxes are digital. Today you send emails no letters.

Like the house key the owner can make a spare key. I would recommend to store the key in different places (usb sticks) in different ways. I have my bitcoins on 2 usb sticks. Onytime stored in a truecrypt container, the other one with a brain wallet. The crucial part is to remember the (unique) long password. But that is only reasonable for greater amounts (which I don't have, but maybe in the future so I want to test )

This is an awesome explanation. Does anyone have any ideas of other things? I'm going to try and run this information through someone today and see if they have any more confusion.

What I want to do is after everything is "clear," create an explanation that can easily be shared to help out others. Even if it only helps bring on a few people, that's a great start!

[ThatDGuy]

Non-technical people probably have infected computers.

See, that leads to even more problems. It's kind of making me wonder if maybe getting mainstream isn't going to be possible without getting people more educated on how computers work and ways to be safe.

Right, we need more infrastructures and devices.

A hardware wallet could fix this. All the private keys are only on the hardware wallet/paper wallet, then that hardware wallet create transactions wich are sent to the computer/smartphone and sent over internet. Even if the pc is infected, it can't stole anything from a transaction.

The first really secure, and easy to understand hardware wallet is going to be huge.  That will cover most people's day-to-day usage.  For larger amounts, though, the current methods of secured backups or even paper wallets are too technical for the general public, I think.  That would seem like the next natural progression though.