HomeCRYPTOCURRENCYWhat is bitcoin – Explaining Crypto To Your Parents

What is bitcoin – Explaining Crypto To Your Parents

Several of us have had to convey the internal workings of new technology to an older parent, aunt, or grandmother. While most people are familiar with Wi-Fi, social media, and Bluetooth, the latest debate is about bitcoin and blockchain.

Explaining Crypto To Your Parents
Explaining Crypto To Your Parents

While you don’t have to be a genius to explain cryptocurrencies to the elderly, this article will assist you in doing so.

Older People want to learn new things.

While it may appear that the elderly have little passion to know about cryptocurrencies, this is not necessarily the case.

Older people, on the other hand, are keen to understand new technologies. Despite a variety of claimed hurdles, such as an absence of previous understanding of a complicated topic, this is the case. The older generation will have a foundation from which to do their own study and decide whether or not to enter the wild new world of blockchain and cryptocurrencies if explanations are kept simple.

It’s money, only this time it’s digital.

Instead of using terminology like cryptocurrency to teach Bitcoin, use examples that readers can connect to. It’s a massive no-no to define something new with something similarly unfamiliar.

It can be compared to normal money or stocks. Clarify that Bitcoin is ordinary money with a worth that can be employed to purchase goods and services. Because the value changes depending on producers and consumers, it is analogous to stocks. Unlike Bitcoin, meanwhile, it does not pay dividends.

Consider it in terms of a mountain.

Now comes the phase when your parents will inquire as to where you obtain Bitcoins and whether you have one in your possession. We’re certain that your parents will comprehend the phrase “digital money” and that you will be able to use it in relation to Bitcoin.

It’s also comparable to a payment card or when your employer pays you via bank transfer. Without contacting a single hand, the money is transferred to an account.

We’ll use the scenario of a mountain named Mount Bitcoin, which has miners, to answer the issue of where you can buy one. Bitcoin miners use computers with a lot of processing capacity to mine the currency.

Advantages of Cryptocurrency 

  • Accessibility

Cryptocurrency is accessible to anybody. All you require is an internet service and a pc or cellphone. When contrasted to setting up an account with a typical banking institution, the procedure of creating a bitcoin wallet is incredibly quick. There is no identification check. There is no credit or history check.

Unbanked people can use cryptocurrency to get banking services without needing to go via a centralized institution. An individual may be still unable to open a standard bank account for a variety of reasons. People who do not utilize basic banking services may be able to use cryptocurrencies to perform online payments or transfer cash to friends and families. 

  • Security

No one can authorize operations or retrieve your money unless they have access to your crypto wallet’s private key. Nevertheless, if you forget your secret key, you won’t be able to get your money back.

Moreover, the design of blockchain technology and the dispersed network of computers confirming transactions ensure transaction security. The network grows more reliable as more processing power is supplied to it.

Any effort to change the blockchain through a network assault would need enough processing power to validate numerous blocks before the entire network could verify the ledger’s correctness. That type of assault is prohibitively costly on popular blockchains like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).

Hacked cryptocurrency wallets are frequently linked to a centralized exchange’s lack of security. It is significantly safer to store your digital currencies in your own wallets.

  • Privacy

Because you don’t need to sign up for an account with a banking institution to use cryptocurrencies, you may keep your transactions private. Transactions are completely anonymous, which indicates you have a unique id on the blockchain (your wallet address), but it doesn’t contain any personally identifiable information.

In many circumstances, this amount of secrecy is beneficial (both innocent and illicit). However, if a wallet address is linked to an individual, all transaction data is made open. There are numerous techniques to further conceal operations, as well as many privacy-focused currencies, to increase cryptocurrency’s anonymity.

  • Transparency

All bitcoin transactions are recorded on the blockchain ledger, which is open to the public. Anyone may look at transaction details, including where, when, and how much bitcoin was transmitted from a wallet address, using tools. Anyone may see how much cryptocurrency is held in a wallet.

This level of openness has the potential to lower the number of fraud cases. Someone can demonstrate that they sent payment and that it was accepted, or that they have the cash necessary to complete a transaction.

  • Diversification

Cryptocurrency can provide investors with a way to diversify their portfolios away from typical financial assets like equities and bonds. While there is no historical data on the price activity of crypto markets in comparison to stocks and shares, prices appear to be mutually independent of other markets thus far. As a result, they can serve as an excellent source of portfolio diversity.

You can achieve more consistent profits by mixing assets with low price correlation. Your crypto property may rise if your investment portfolio falls, and vice versa. Still, crypto is notoriously volatile, and if your investment strategy is excessively skewed toward it, it may increase the risk to your total portfolio.

  • Protection against inflation

Many people believe that Bitcoin and related cryptocurrencies provide inflation protection. The total amount of bitcoins that will ever be created has a strict limit. As the money supply grows faster than the Bitcoin supply, the value of Bitcoin should rise. There are a slew of other cryptocurrencies that utilize supply-control techniques to function as a hedge against inflation. 

The cryptocurrency’s worth

With all of the advantages, cryptocurrency provides over traditional currency and other types of assets, it’s difficult to claim that using or dealing in crypto has no benefit. Several users who appreciate rapid and safe transactions enjoy the functionality offered by many cryptocurrencies. With lesser technological barriers, it will only become more widespread over time. The advantages of introducing crypto or crypto stocks to your portfolio begins to mount up when you consider the perks of diversity and the possibility to hedge against inflation.

David Fenton
David precisely described as a Literature Junkie, Marketing Specialist, and Content Producer. Writing quality content is his passion, which makes perfect sense. Additionally, He loves to listen to music every time no matter if He's working or traveling.
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