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Author Topic: Anyone have a simple explanation of Bitcoin even your Grandma would understand?  (Read 3518 times)
maxxoccupancy
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December 09, 2013, 04:07:51 AM
 #21

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

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

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

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.

I would like to work on development of a polymorphic altcoin that maintains a stable value and is more resistant to fraud.
btc: 15diNSNVontYf5iUvQqnLSQJ9rCAHuwpyJ   betyourbits.com      LTC: LRqVTEPcS7uusMy7JDqYEUg6KqdhfRWC5B
DogECoin: DDHG719WNCCav5MWQQqyxLABFhZTG3jwX3     QRK:  QdKnP5SqoG9r4CNuFcY1oesaYUAsu1W5hF
beckspace
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December 09, 2013, 04:14:55 AM
 #22

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

 Cheesy

That should do it, send her a PGP with a link for the github.
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December 09, 2013, 04:18:48 AM
Last edit: December 09, 2013, 04:41:59 AM by vosovich
 #23

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.
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December 09, 2013, 04:25:12 AM
 #24

- 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.
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 Smiley (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 Smiley )

"All Your Base Are Belong To Us" by CATS
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December 09, 2013, 10:11:45 AM
 #25

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.
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December 09, 2013, 02:02:44 PM
 #26

I had to explain it over thanksgiving, I compared it to stocks as it's value can change daily but no one controls it.

that never ends well, misses the value of the network in the idea of a bitcoin.

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.
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December 09, 2013, 02:27:43 PM
 #27

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

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December 09, 2013, 02:32:48 PM
 #28

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.
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December 09, 2013, 02:45:42 PM
 #29

The problem with any simple explanation:


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December 09, 2013, 02:48:28 PM
 #30

The problem with any simple explanation:

http://imgs.xkcd.com/comics/teaching_physics.png

That is pretty much how my subnetting class goes with the game designer students.
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December 09, 2013, 02:57:11 PM
 #31

i am trying to convince my father that he should buy and hold a few of these and just play but he keeps hearing news about the pump and dump scams and believes that too few people can manipulate the market.  Does anyone think that this will be become less of an issue with more people buying up coins to hold?
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December 09, 2013, 03:00:10 PM
 #32

Nah, but once bitcoin reach 100.000$ then maybe he will think "if only i bought them when they were cheap..."

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December 09, 2013, 04:23:25 PM
 #33

i am trying to convince my father that he should buy and hold a few of these and just play but he keeps hearing news about the pump and dump scams and believes that too few people can manipulate the market.  Does anyone think that this will be become less of an issue with more people buying up coins to hold?

yes but by that time you might be looking at a price of $1,000,000 per BTC
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December 09, 2013, 09:00:55 PM
 #34

digital gold
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December 10, 2013, 12:41:29 AM
 #35

- 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.

This post made my day.  Grin
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December 10, 2013, 01:27:15 AM
 #36

Bitcoin: Decentralized register of things you own.

In future it could be used for decentralized registering of anything you value, land real estate, good old ownership collection from your state to the cloud :-) For now it is used to register currency owned by your bitcoin address
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December 10, 2013, 02:56:03 AM
 #37

Grandma,

Bitcoin is like gold.

Except that it is a VERY big complicated numeric word that cannot be imitated.

So, there will only be a certain amount of bitcoins. They wont be able to discover new bitcoins like how they can discover gold deposits.

You can put it in your bag like gold, divide it to small pieces like gold and spend it.

You lose your bitcoins if your wallet gets stolen, just like you would lose your gold if your gold bag was stolen.

You cant send gold over internet, but you can send bitcoins to anyone on internet, instantly.
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December 10, 2013, 03:24:39 AM
 #38

Grandma, you know how a penny is the smallest denomination of the US currency, well with bitcoins you can have smaller denominations, heck let me break it down for you og style.

99 pennies make a dollar but bitcoins ain't made up of no pennies, no no no

see in the land of networks we work with octets you see. now in each octet is a 8 numerical placeholders and added together they can make up 255, you still with me granny, no, well damn..alright..

alright, look lets make it even simpler, there was this crazy asian dude who wanted to change the world as we know it

see, he wanted to buy some alpaca socks, but wanted to do it in a crazy new way. he was like hey, would it be cool to have money that no one controlled.

so this little asian dude, being asian he was smart as fuck, so he typed away at his computer eating fried rice and shit seeing the shit in his head like neo in the matrix...neo...you don't know who neo is?...shit, put this on pause, let me get my matrix blu ray collection, we about to get our movie on.


***Disclaimer***

No offense meant, seriously, just did it for a laugh.
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December 10, 2013, 05:13:58 AM
 #39

It's a peer-to-peer distributed accounting ledger, invented to remove the trust required in the banking system.

Winner so far..

When you describe Bitcoin by focusing on the distributed, public ledger aspect, it becomes much more apparent to people that Bitcoin has real value and isn't just an arbitrary digital token.  
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December 10, 2013, 05:19:47 AM
 #40

It is also programmable so you can create wills and contracts without a bank or a lawyer. Any sized company, even mom and pop shop and can offer an IPO using bitcoins.




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