Explaining bitcoin to friends

[piramida]

qwk, that's an amazing post

touch their worst human properties, yes. I remember when I first heard about it, mid-2010, I even installed the software. But the concept of my computer calculating *something* to get some useless virtual money seemed risky at the time - is it a self-signup botnet? Why would that be widely accepted? So I forgot about it for half a year, until I heard it's actively discussed on the internets, then I actually took some time to *think* about it, and understood the brilliance of the idea.

Internet is a new medium, which is way above any regime or government or borders. All existing e-currencies are either govt regulated or some shady guy owned, and nothing prevents them from closing their shack or adding zeroes to the database. But Internet needs it's own currency, being free, unregulated, cross-border, and algorithmically protected from devaluing. Something that will be instantaneously brought across the continents, just like your http packet. Something where I can send 1$ to an article author in a second, without paying 2$ fees.


As soon as I understood all that, the only question remaining for me is - how would established world powers just give away their power to a bunch of miner admins who invested 1000$ each and are now potentially richer than them. There are two answers - no they won't, and they'll try to crash this currency to a joke while they still can by investing heavily then manipulating the price to their liking (see mtgox incident?), or we, all the little people, will jointly invest enough to prevent big money from ruining our little e-currency by stabilizing it. So that's why I'm buying, and hopefully your friends would be smart enough to spend some time, think, and come to the same conclusion.

[tc2606]

i've just discovered bitcoin today, it's really interesting. just wondering, what was a bitcoin worth at its peak amount?

[being]

So that's why I'm buying, and hopefully your friends would be smart enough to spend some time, think, and come to the same conclusion.

I liked your post and I really hope all of this 'good stuff' will happen.
But! There are absolutely no guarantees and it could very well go either way. Even if no 'evil forces' came in with their trillions (which I believe is very unlikely anyways).
There's so much stuff happening in the world, that to see bitcoin as a threat to any other currency, you'd have to be a die-hard bitcoin fan.

Understanding that it could go either way, is what makes it risky to invest into bitcoin. And not everyone can take this risk. And if they could, the currency would surely not make it.
If everyone (or most of the people) see bitcoin only as something to invest in, it won't become a stable/usable currency. We need more people to use it as a currency, (services/goods which are offered for bitcoins) for it to really gain in value.
Imagine what would happen if 85% of the bitcoins were held by people who have 'invested' in hopes of making a buck in the future... (Actually this seems to be true at the moment)

[piramida]

No it's quite simple, economic rules won't allow hoarding to happen indefinitely. There are many businesses that want whatever it is you are hoarding, and bitcoin is very liquid - much more liquid than gold and even regular cash - it is easy to spend. So it's only a matter of time until you find deals online lucrative enough that you will want to spend some portion of your money. I know I did.

So again, the inevitable chain of events would be 1. people invested in something they believe has value 2. small venues start selling services or goods 3. some of them grow large 4. larger businesses see BTC as a viable alternative 5. you spend everything when you think the price is high enough and offers good enough I already seen vacancies for online programming work that offered BTC for pay.

An analogy - imagine you are an american indian sitting on a pile of gold. White men pass by and give you necklaces, firearms, food, burning water - and even though you know that shining pile is or will be worth much more some time in the future, you will spend it eventually if that's the only thing white people want Sorry if that offends any american indians here, I needed an analogy. It rarely if ever is the other way - everyone has a price that he thinks is good enough to sell off, and it is very hard if not impossible to wait indefinitely looking at the high prices which can get down 50% at any moment People will spend, if there is a place to spend, I'm more than sure.

[Title12USC§411]

It's fucking useless.


Sure i don't understand the cryptography behind it, but i find the general workings very easy to grasp.

When people start asking "what gives it value" is when i fail to explain properly. Even still. All i get is.


"pyramid scheme", "scam", and someone even went as far as to say "what are they doing with all that hashing power, it could be treason" - that was from someone who is mining with duel 6950s.  And that was even after i wrote out a really long paragraph of what all that hashing is for. Without the cryptography jargon because i don't know the technical aspects of it.

I may be bad at explaining things, but i quit. I will never try to explain bitcoin ever again. Sorry i've failed the community.

Try splanin something more simple and concrete to understand which might demonstrate why BTCs might be better to use than say Federal Reserve Notes (FRN).  For example did you know the little pieces of red white and blue fibers embedded in each and every FRN come from hemp?     So, since only a member of the "public" (i.e. government - I am a member of the "private") is allowed to handle FRNs (see of course Title12USC§411) anyone not a member of the public caught handling FDRs can be easily prosecuted for DRUGS AND BANK ROBBERY!

[Title12USC§411]

i've just discovered bitcoin today, it's really interesting. just wondering, what was a bitcoin worth at its peak amount?

It spiked up to about 32 FRN (so called "USD").  Check Mt. Gox historical data maybe.

[MtRev]

Digital currency had been around for ages, so right off the bat, I knew this wasn't a scam as many had called it. The only difference, BitCoin seems to be making a great deal of noise in a short period of time. This is what really caught my interest.

[Uekiya]

i've just discovered bitcoin today, it's really interesting. just wondering, what was a bitcoin worth at its peak amount?

Such a number is hardly of any information value.  Your interest should be put in a the moving averages of the various markets.

[MtRev]

At the rate it jumped up, it's too early to tell what's its really worth.

[Uekiya]

It's fucking useless.

Well, yes.  It's mostly because they don't understand the underlying problem with their dollars and euros as they are.  But mostly because they don't care for anything more than a soundbite or an argument.  A good way to start weeding out the receptive is by telling them to watch the Money As Debt videos by Paul Grignon.

   http://www.moneyasdebt.net/
   http://video.google.com/videoplay?docid=-2550156453790090544

It's unlikely that any but the smallest minority have the genuine interest level to perform such a minimal task as staring at a screen and listening for forty-seven minutes.  (This is despite all the episodes of Jersey Shore they have no doubt watched.)

Survivors of this initial weeding may then be of a caliber to understand the arguments for Bitcoin.

[V4Vendettas]

Strange everyone I have told about it its really interested in it. Even looks like I'm going to be running a miner for mum bless her and a few mates.

Either Im epic good a selling stuff, my freinds all have more than 2 brain cells (not totaly sure on this) lolz or could it be they all Hate the banks that much that this is just too good to ignore.

Anyway I have said ffs dont go droping your savings on this go read about it.
Also told them its high risk <---no idea tbh but that how i see it and would hate to give a freind bad advice.

Also advised them that mining might be the safest route as at least they have a gaming PC should it all come crashing down.

[MtRev]

Honestly, I can really see this going up to as high as $100 USD per 1 BTC a few years down the line.

[piramida]

Also advised them that mining might be the safest route as at least they have a gaming PC should it all come crashing down.

Won't go crushing down below 1$ per usd, I'm always available to purchase any amounts at that rate I'm sure other people will catch it even sooner, though. The problem with MtGox is that it takes lots of time to get much money in and out of the system. Something quicker, like wallstreet for bitcoins, will help protect the price from sudden surges...

[bsphil]

It's fucking useless.


Sure i don't understand the cryptography behind it, but i find the general workings very easy to grasp.

When people start asking "what gives it value" is when i fail to explain properly. Even still. All i get is.


"pyramid scheme", "scam", and someone even went as far as to say "what are they doing with all that hashing power, it could be treason" - that was from someone who is mining with duel 6950s.  And that was even after i wrote out a really long paragraph of what all that hashing is for. Without the cryptography jargon because i don't know the technical aspects of it.

I may be bad at explaining things, but i quit. I will never try to explain bitcoin ever again. Sorry i've failed the community.

Part of the problem of understanding why BTC has value is because people take for granted that USD somehow has value (and gold somehow has value, etc.).  It's an awkward concept if you really think about it, but USD/Gold has always had value our whole lives, so I think that's why we generally don't worry about it. 

When people ask "what gives bitcoins value?" respond with "what makes gold valuable?"  There's no intrinsic value to gold, it's just a variance of metal.  It's not because it can be made to look nice, because other metals can be made to do that for a fraction of the cost.  It's all about rarity and demand.  Gold is rare and people want it, therefore it has value.  Perception is reality in the market, just making people think something has value can make it actually valuable.  It's just a matter of fomenting that initial demand.

[V4Vendettas]

OK forget what I said a few post up. I have run into a string of people who are perfectly happy with the banking system no matter how I put it to them.
I either just failed bitcoin a little or I just ran into some real idiots.

Apparently bitcoin is for nothing more than getting hold of child porn.

Just cant facepalm hard enought right now.

[skottiejay]

I haven't really tried explaining it to anyone yet, besides my SO who just looked at me like Bambi after, well you know. It's really fascinating but I think out of all of my friends (current at least) I spend the most time online, and I spend the most time, exploring things? I guess? I don't know, I haven't the first clue about bitcoin. I do know that I would like to make some, and I hope it stays at the current exchange or goes higher. Maybe that's what people don't understand, why you can turn virtually nothing into money.

[MrCrabs]

I just get enthusiastic and excited . And hope it rubs off.
But seriously its about knowing  what you are talking about.
I have been interested in  Bitcoin for 2 months. and I really
struggled to see where the value is. but having read and listened to
lots and lots of people I know a little bit more now. So the best thing
one can do is just point people to good information.

[V4Vendettas]

I agree you can linky people to good info but some are just closeminded and its pointless.

[spreaders]

Tell them the banks are not involved. Considering the mess they  made it's got to get their interest. In all seriousness though, if you can show hem a good reason for using them, it might encourage them to look into it further, and study it themselves.