How to Answer "What are Bitcoins?"

[EuSouBitcoin]

What are Bitcoins?

How can such simple question be so hard to answer succinctly? Recently the Bitcoin wikipedia article read, in part,

"Bitcoin is a decentralized electronic cash system using peer-to-peer networking, digital signatures and cryptographic proof to enable irreversible payments between parties without relying on trust."

While that answer is correct, I think if I gave that answer to 99.99% of the people who ask me "What is Bitcoin?", I'd instantly turn them off. Surely we can come up with something short, simple, intriguing that is mainly correct if not 100% correct. Add your answer to this thread.

I'll start this thread with a few tries:

Like cash, only better.

Like digital gold.

A new type of digital money.

[teflone]

Like cash in your own personal vault(mattress). Only digital.

[Piper67]

Like gold coins that no one can counterfeit and you can send instantly across the globe.

[Serge]

OP: like gold only digital; there was no digital gold before Bitcoin

what is bitcoin? - it's a new form of money

there is no simpler answer to this.

it's the same as asking what is oxygen or internet - you can describe their uses and benefits in simple terms but if you want to tell more about oxygen or internet you will have to cover basics of chemistry or computer science which you won't be able to compress into a single sentence or a short paragraph without further explanation.

[Epoch]

Actually bitcoins are more akin to being a commodity, rather than money.

Today the vast majority of bitcoins that are changing hands are doing so by being TRADED on bitcoin exchanges (much like commodities such as sugar, coffee, and pork bellies are on the commodity exchanges). Only a very small fraction of bitcoins are being exchanged for goods or services (as money would be).

If bitcoins were money, they would need to be much more ubiquitous and you would need to be able to buy much more goods and services in a much more convenient manner than you could today.

So the more accurate response to the question "what are bitcoins", is this: "bitcoins are a commodity". Like sugar, like coffee, and like pork bellies. You can easily trade with them, speculate with them, invest in them, but only rarely exchange them for other goods/services.

[jimbobway]

Owning bitcoins is owning a string of letters and numbers that only you know about.  It's like a password (private key) that when used is worth money.

[DeathAndTaxes]

Actually bitcoins are more akin to being a commodity, rather than money.

Today the vast majority of bitcoins that are changing hands are doing so by being TRADED on bitcoin exchanges (much like commodities such as sugar, coffee, and pork bellies are on the commodity exchanges). Only a very small fraction of bitcoins are being exchanged for goods or services (as money would be).

Well if that is your definition of what is "not money" then no money is money.

Forex market daily volume is ~$4 trillion which is much higher than the transactional volume used in exchange of goods & services.

[Gabi]

Well gold is not money

[SaintFlow]

OP: like gold only digital; there was no digital gold before Bitcoin

what is bitcoin? - it's a new form of money

there is no simpler answer to this.

it's the same as asking what is oxygen or internet - you can describe their uses and benefits in simple terms but if you want to tell more about oxygen or internet you will have to cover basics of chemistry or computer science which you won't be able to compress into a single sentence or a short paragraph without further explanation.

digital gold existed - it was centralized though
http://en.wikipedia.org/wiki/E-gold

@ TOPIC

Bitcoin is easy and flexible
It can be to international money transfers what the email is to the pony express.

[Epoch]

Actually bitcoins are more akin to being a commodity, rather than money.

Today the vast majority of bitcoins that are changing hands are doing so by being TRADED on bitcoin exchanges (much like commodities such as sugar, coffee, and pork bellies are on the commodity exchanges). Only a very small fraction of bitcoins are being exchanged for goods or services (as money would be).

Well if that is your definition of what is "not money" then no money is money.

Forex market daily volume is ~$4 trillion which is much higher than the transactional volume used in exchange of goods & services.

I haven't defined what is "not money", but I have no problem arguing that bitcoin is not money. Money is defined as any object that is generally accepted in a given country as payment for goods or services. The key phrase being "generally accepted". Perhaps your definition of 'money' is different, in which case we are not arguing about the same thing.

Bitcoin is not generally accepted as payment ... thus, not money according to this definition. Bitcoin is not legally/officially recognized as money by any government agency of any country I am aware of. And until it is, a much stronger case can be made for bitcoin being a commodity.

[DeathAndTaxes]

Bitcoin is not generally accepted as payment ... thus, not money according to this definition. Bitcoin is not legally/officially recognized as money by any government agency of any country I am aware of. And until it is, a much stronger case can be made for bitcoin being a commodity.

Legal acceptance/support by a nation determines legal tender not money.

Still your claim is that because Bitcoins are traded they are a commodity well then all currencies are commodity because they are all traded far more than are used for commerce.

[Epoch]

Bitcoin is not generally accepted as payment ... thus, not money according to this definition. Bitcoin is not legally/officially recognized as money by any government agency of any country I am aware of. And until it is, a much stronger case can be made for bitcoin being a commodity.

Legal acceptance/support by a nation determines legal tender not money.

Still your claim is that because Bitcoins are traded they are a commodity well then all currencies are commodity because they are all traded far more than are used for commerce.

I think my claim is that because bitcoins are not generally accepted as payment, they cannot be considered as being money. Salt, sugar, pork bellies are also not generally accepted as payment. But they can be bought, sold, traded. They are commodities. So are bitcoins.

[Serge]

OP: like gold only digital; there was no digital gold before Bitcoin

what is bitcoin? - it's a new form of money

there is no simpler answer to this.

it's the same as asking what is oxygen or internet - you can describe their uses and benefits in simple terms but if you want to tell more about oxygen or internet you will have to cover basics of chemistry or computer science which you won't be able to compress into a single sentence or a short paragraph without further explanation.

digital gold existed - it was centralized though
http://en.wikipedia.org/wiki/E-gold

@ TOPIC

Bitcoin is easy and flexible
It can be to international money transfers what the email is to the pony express.

other than having 'gold' in it's name and 'backed' by real gold E-gold had no properties similar to gold. simple proof: where is it now if it is comparable to gold like qualities?  it's gone. fake digital gold at best.

[gnar1ta$]

Back on topic - I find it best to have some idea who your talking to.  It can be a commodity to someone who trades or invests in commodities, it can be money for a merchant looking for lower fees or someone looking to send money across borders, and it doesn't have to be electronic as there are several different types of physical bitcoins available.  Tailor it to the person, and keep it simple.  Once they are interested you can go into more details.

[Serge]

"bitcoin is a commodity" - doesn't say much about bitcoins at all, that's why i choose to use term 'money', at least it was intended for such use.

[Epoch]

"bitcoin is a commodity" - doesn't say much about bitcoins at all, that's why i choose to use term 'money', at least it was intended for such use.

Inaccurate, but probably easier for people to understand. At the risk of sounding hypocritical, I can see myself saying 'bitcoin is money' as well, depending on who I was speaking with.

[Serge]

"bitcoin is a commodity" - doesn't say much about bitcoins at all, that's why i choose to use term 'money', at least it was intended for such use.

Inaccurate, but probably easier for people to understand. At the risk of sounding hypocritical, I can see myself saying 'bitcoin is money' as well, depending on who I was speaking with.

"what is sugar" - "it's a commodity"  although indeed it is commodity it doesn't explain what sugar is, when you say it's sweetener or eatable then you are closer in explaining what that is in a short form.

[Phinnaeus Gage]

Back on topic - I find it best to have some idea who your talking to.  It can be a commodity to someone who trades or invests in commodities, it can be money for a merchant looking for lower fees or someone looking to send money across borders, and it doesn't have to be electronic as there are several different types of physical bitcoins available.  Tailor it to the person, and keep it simple.  Once they are interested you can go into more details.

Exactly what I did when I presented it @ChicagoCabbie (Rashid Temuri). When he first called me on the phone, his first question was "what is Bitcoin(s)". I hesitated for a second and expressed it'll be better answered in person. On the way to Chicago to meet him, I kept formulating a stock answer in my mind, but then decided to just let the conversation flow naturally, thereby dictating the human side of Bitcoin. And that's exactly how it went, while we both enjoyed dinner at Sabri's. To give you an example, I didn't going into a spiel of how and why you should eat at Sabri's. I simply stated we that we both enjoyed dinner their. Upon seeing it written like that a few times, you may decide to search on your own accord the full name of this restaurant I keep mentioning, for maybe you feel like you're missing out on something. Bitcoin is different to different people. That was the point I drove home to Rashid.

Tailor it to the person, and keep it simple. Once they are interested you can go into more details.

[Serge]

when i need to tell someone what is bitcoin without diving in technicalities i just say "it's the money of the future" - works very well )

[kokojie]

I usually just tell them it's going to be the internet's currency