Bitcoin for a boomer – well, how do you explain to an older person – mom, dad, friend – the ideas of cryptocurrency and the fact that it may be worth having even a part of the digital currency? We will try to help you with this article!
Bitcoin for the boomer
We came up with the idea to write this text after the last “scandal” with JK Rowling. She became interested in the subject of cryptocurrencies. She just wanted to understand what she was Bitcoin. The cryptocurrency community set off the educational author of books about Harry Potter. Unfortunately, the effect was … unsatisfactory. You can read more about it here.
Only that at the writer’s place there could have been your mother, father or anyone else who had heard about Bitcoin but didn’t understand what the noise was all about. And you can’t be surprised by such a person! After all, since childhood he has been taught us what money is and – once we are able to understand reality a little better – that it comes from the state. For someone with such thinking BTC appears to be a whim of millennials or computer geeks. However, it is different. All right, let’s try explaining it to Bommers instead of making fun of them. In turn, however …
How NOT to explain what BTC is …
Telling someone who is not interested in technology and economics, excitedly saying that “Bitcoin is like that decentralized currency, which is not issued by the central bank, but by the community of miners, and its supply is limited “… We know that in the eyes of cryptocurrency purists and early adopters it sounds like an introduction to a great, fascinating story that can only be heard with baked face. Only that most people can quote it rather a question, is everything ok with us … Yes, we won’t convince anyone to BTC. In general, avoid “lesson 1” difficult words and concepts that admit that someone will recognize us as an “expert”, but the effect will not be achieved. Quite the opposite: a person will think that kryptowaluty it is something so complicated that it would result in an ironic comment:
Finally, an explanation that makes sense. https://t.co/Ne6L8TOM7p
– J.K. Rowling (@jk_rowling) May 15, 2020
How to start?
In short, explaining to someone what BTC is should begin by letting them understand the nature of current fiat currencies. It is only understanding that the modern policy of central banks and the crazy printing they are using, threatens that her life savings can melt at an alarming rate, can open her eyes to the advantages Bitcoin and cryptocurrencies.
So let’s start with the fact that the currencies we keep in our wallet and in digital form on accounts are unsupported by anything. Okay, someone can even say that they have a base in the monetary policy of central banks and believe in it not society itself, i.e. a certain social contract. At the same time, however, no one in the bank will exchange you banknotes for gold or anything permanent. In fact, since the early 1970s, since the collapse of the Bretton Woods system, our banknotes are simply papers, pieces of paper, and are essentially worth as much as their production.
If someone does not like the digital nature of BTC, it is worth paying attention to the fact that the money we keep on the accounts are also digital records. These can be turned into a physical form, but then we only get pieces of paper whose value creates a pretty central bank. In total, he can devalue them by 50 percent. one decision. If someone thinks this is unreal, he has a poor memory, because even in Poland we experienced something like this in the 90s.
However, there is no gold or silver reserve behind BTC
Yes, that’s also true. There is no gold or silver reserve behind Bitcoin. But Bitcoiny do not come from the air, like fiduciary currencies (i.e. those we pay every day).
– How is that – a much more intrigued boomer will ask at that moment, because a moment earlier we reminded him of the devaluation of the Polish zloty in the 90s.
This is a good time to explain superficially mining, i.e. the process of issuing Bitcoins. Again: no difficult concepts!
Firstly, central banks are responsible for their issue for ordinary currencies. These can theoretically print an infinite number of them. Some even mock the Fed that it plans to “print” the crisis that has begun. Of course, this will eventually lead to sooner or later inflationand maybe even hyperinflation. It is worth emphasizing here that these two concepts are not identical at all. Tall inflation it’s just a very big price jump. Hyperinflation is already a decline in confidence in the currency. And if the latter bases its value – as we have already mentioned – on faith in it, it may mean its actual death. In other words, thrifty people will lose their funds, because these will prove to be only papers for which we can no longer buy anything. Indebted people and the state will profit if they are drowning in debt (this is called rolling debt).
Can BTC also destroy hyperinflation? Theoretically, yes, but the matter is more complicated, and the same cryptocurrency is protected against such a tragedy by mining. Miners are behind the BTC emission process. However, it is not about men with pickaxes, but people from the borderline of IT specialists and accountants. Miners are receiving cryptocurrencies in exchange for maintaining the BTC payment network. In practice, it looks like that every transaction in the network that you perform – e.g. sending 0.5 BTC to a colleague – is verified by miners, and specifically by their equipment, i.e. excavators (this is a type of specialized computing machinery). The idea is to verify that someone does not want to send a “false transaction” to the network, e.g. to pay for several transactions with Bitcoin.
How is hyperinflation related? Well, excavators consume electricity, i.e. for X electricity the miner will check a given number of transactions and in return receive Y BTC. He will not, however, sell cryptocurrencies so earned at a price much lower than the price of production, i.e. the electricity consumed by the excavator. Of course, in the history of Bitcoin there were times when mining was poorly profitable or unprofitable, but they did not last long.
In short, mining itself somehow protects BTC against hyperinflation of this currency. In addition, the lack of a central bank means that no one will print Bitcoins from the air, as is the case with fiat currencies.
Power over your own currency
There is another piece of the puzzle. We do not keep cryptocurrencies in banks today, but on our e-wallets. As long as we have access to private keys, only we have control over BTC. No authority or private bank will “sit down” on these savings if, for example, it considers it necessary due to the so-called “Higher goals,” or fighting the crisis.
Will that convince the boomer?
We hope that these arguments help your friends boomers understand the ideas of critics. Let us know in the comments if your parents invest in BTC!
Current course You can always check Bitcoin and other cryptocurrencies in the tabs: course Bitcoin and cryptocurrency exchange rate on Bitcoin.pl. A place where you can buy Bitcoin and other kryptowaluty, include cryptocurrency exchange BitBay.net. If you don’t have a BitBay account yet, this article will show you how to create one efficiently: LINK.