Christmas is only a few days away, and for many families, the Christmas dinner conversation will inevitably turn to the subject of Bitcoin. The price is reaching new all time highs for the first time since 2017, but Uncle Jo just can’t seem to wrap his head around it! He’s been waiting months to ask his younger relatives all of his burning questions and you’re in the firing line…
We've prepared answers to the questions you're bound to be asked, so you can avoid being caught out and doing an injustice to Bitcoin and Cryptocurrency.
What is it?
Don’t start with explaining that “Bitcoin is cryptocurrency”, because you’ll lose your relative right there! Instead try comparing it to something they do understand, such as money and stocks.
“Bitcoin is like money in that it has value and can be used to buy goods and services. It is also similar to stocks because the value fluctuates based on supply and demand, but there are no dividends, just whatever the bitcoin is worth on any given day.”
Where do these Bitcoins exist?
Again, let’s not confuse them with an answer explaining the ins and outs of Blockchain technology and virtual currencies. Try relating it to their current banking system.
“Bitcoins are like the money you have in the bank in that they are digital. When your boss pays you through direct deposit and you then go buy something with your debit card, the money goes from one place to another without ever touching your physical hands. The same can be said for Bitcoin, except Bitcoin doesn’t rely on middlemen like banks to process these transactions - it’s all governed by software and code.”
It’s so volatile! Why does the price keep going up and down?
If they’ve been following along with mainstream media reporting of Bitcoin, they will most likely have the perception that Bitcoin is very volatile and a dangerous investment, so this question is sure to pop up. Here’s how to answer it:
“Volatility is simply part of the life cycle of any major technological breakthrough. The S-Curve adoption is a pattern observed with the advent of new technology. The S-Curve shows that when a new technology is being adopted, there is a lag phase followed by an early adoption phase, and then a late adoption phase followed by a late lag phase. Cryptocurrencies are showing this pattern and are still in the beginning stages of early adoption, similar to the Internet back in 1990.”
No banks?!
For some, the idea of not having a bank involved with their money is scary. Make them see the benefits instead…“That’s right! You won’t need any authorisation to sell your Bitcoins, or to make a transaction with a friend on the other side of the world. No one can censor what you do with your bitcoin or confiscate it. It is entirely yours!”
But if there’s no banks, how do I keep my Bitcoins safe?
Answer: you become your own bank! It’s therefore up to you to ensure you are safely securing your coins. The best way to do this is with a cold storage hardware wallet, which is a physical cryptocurrency wallet that is not connected to the internet. Devices are usually small, affordable, compact, and easy to use!
It all seems so confusing, where do I start?!
Offer to help your family member set up their very own wallet, and send them some Bitcoins. Nothing gets someone more excited than free money! And the more helpful you are the more likely they are to understand Bitcoin and want to get involved.
You can also direct them to Coinstop. We are more than willing to educate people about the benefits of Bitcoin and Blockchain technology and the best ways to get started.
Let us know below how your Bitcoin Christmas conversations go...Good luck!