After attending a few Bitcoin Meetups I've found that people very knowledgeable about Bitcoin can still get tripped up explaining it to non-technical people. To solve for this I posted a draft explanation on the Bitcoin subreddit and got some great contributions to improve it. Now I'd like to post it here for further refinement or as a reference for others who want to explain Bitcoin to a non-technical newcomer.
I'll edit this post based on feedback received to improve it.
I. Bitcoin is a digital currency with no central authority that is secured by cryptography and managed by an open source protocol anyone can review.
II. Anyone who has internet access, or even only a phone, can transact in Bitcoin.
III. The total number of possible Bitcoins is capped and the “minting” of new Bitcoins will occur roughly every 10 minutes as reward for a process called mining until the cap is reached.
IV. The cap and algorithmically controlled rate of “minting” makes Bitcoin scarcity both real and predictable and is partially why Bitcoin is believed to hold value better than alternatives that do not force similar scarcity limits.
V. Unlike traditional currencies or precious metals, Bitcoin is highly divisible making it capable of accommodating massive future adoption on a global scale even after all Bitcoin has been mined.
VI. Bitcoin transactions are more similar to cash than credit cards, PayPal, or Bank Transfers in that they do not require an intermediary financial processing service. They are primarily person-to-person or person-to-business with no need for a financial institution to manage the transaction.
VII. All Bitcoin transactions flow on a network that spans thousands of systems around the world.
VIII. The network is resilient with no single point of failure and its cryptographic processing power from the mining exceeds the world’s top 500 supercomputers combined and is growing at an exponential rate.
IX. The Bitcoin network keeps a ledger of all transactions called the Blockchain.
X. To prevent anyone from falsifying or otherwise gaming transactions, cryptography is used to securely originate transactions from Bitcoin wallets.
XI. Cryptography is also used by the network miners to function as a signing notary to prevent double spending and to make each transaction official in the ledger.
XII. As with any currency Bitcoin’s worth is based on the market’s trust in its ability to hold and transfer value.
XIII. People trust in Bitcoin because its open logic, tamper resilient nature, global adoption, and inherent digital advantages like instantaneous transportability and transfer make it better than any traditional currency or precious metal.
DISCLAIMER: Bitcoin is still in its early stages and considered highly speculative. Bitcoins can be subject to theft and must be protected. Bitcoin is not legal tender under any sovereign jurisdiction and purchasing Bitcoin can result in serious regret, especially if you wait until a year from now before you get some.
Thank you for posting this one. This is a great help for people like us who is unfamiliar with cryptocurrency jargon. Is there any way that you could post an ELI5 for ways in earning Bitcoin like mining, lending, gambling, faucets, trading and etc. I'll be watching this thread and hoping for your response.
