Breaking It Down: How To Explain Bitcoin To (Older) Friends & Family

Learning about bitcoin can be hard — explaining bitcoin can be even harder.

11 min readApr 23, 2021

Ever had a boomer ask you about bitcoin? Sheesh.

Everyone seems to be interested in bitcoin and other crypto nowadays. A recent survey taken by the Gemini crypto exchange confirms this, stating that around 63% of adults in the US are at least “crypto curious” (they don’t hold any crypto, but are interested in it). Fun fact: over half of them are women.

While it seems like a no-brainer these days to go to the internet in search of answers, many people still prefer to get information directly from people that they have an established degree of trust in. This often translates to people like family members or close friends.

In having many of these conversations myself, I started to notice a trend — many of the questions/concerns that different people had were just different variations of the same things. Of course, there are always specific questions that people ask that are unique to them, but generally, most people are looking for the same information when they first come into the space.

Now, it’s on you to explain it to them. You’ve been doing the research, and you have a pretty decent grasp of the technology and the space. You watch the videos, you read the articles and you are active in many of the online crypto communities. You got this!

Then they hit you with a question you hadn’t heard before? You know the answer. You explain it the best way you can, but they still just don’t quite get it.

Believe me — this happens. A lot.

So I’m gonna give you a simple guide on the best way to approach these conversations and answer these questions, so that you can better articulate the info and anyone can get it (even your boomer relatives that hate tech).

Side note: while this article will contain general info that can be used with anyone, I’m writing this with an older demographic in mind (namely, the 35+ crowd).

So What’s The Best Way To Approach These Questions?

Well.. as you’ve probably seen by now, explaining bitcoin to anyone can take quite some time, and it depends on how tech savvy and open-minded the person is that you’re speaking with. So how should you approach this?

Using the direct definitions that you often find online is often a complete waste of time. In most cases, terms like “decentralized”, “immutable”, and “hash algorithms” won’t mean much to anyone. And even if you try to explain some of these concepts, they still can have trouble seeing why we even need them to begin with. And therein lies the main roadblock:

“Why bitcoin?” is what you need to focus on—not “what is bitcoin?”

The “why” gives people all of the context that they need to answer most of their own questions or to ask more specific questions for themselves. Think about it:
Do you understand “what” email actually is or the different things in place that allow the tech to work?
Probably not.. I know I don’t.
Do you still use it almost every day?
Of course. We know that it’s way more efficient than regular mail, so it has become a staple of society today.

This is because we understand “why” email exists, so it’s easier to figure out “what” we can do with it.

Bitcoin Is Real Money

The first thing that you should address is the concept of “money itself”. While you may understand why people see bitcoin as money, it gets harder to break this down for people who have spent most of their lives with a basic understanding of what “money” is. When they think of money, they only think of things like dollars, pounds, euros, etc.

Here’s what these conversations normally look like:

Nothing tangibly backs bitcoin.. how does it have value? Well, technically, nothing really backs the US dollar either; it’s fiat currency. The last tangible thing that backed the dollar was gold, and that ended from the mid 1970s.
What’s “fiat”? It just means “faith” in something.
So where does the dollar get its value from? “Faith” in the government and its forces (i.e. military, tanks and bombs). In most cases, you’ll find that the biggest kid/bully on the playground is the one that dictates the rules, so..
Ok.. but I still don’t get how it’s “money”. I can’t use bitcoin the same way that I use my money. Actually, you can. You can spend it, save it, and use it as a measure of value—all the same things that you do with “money”. Many retailers are already starting to accept bitcoin as payment for goods/services.

Once you get past the “how is bitcoin considered money” part, it normally gets a bit easier.

Inflation Sucks.. Bitcoin’s Scarcity Addresses That

Now that you’ve addressed bitcoin being “real money”, it’s time to dig into what makes it “better money.”

So let’s start with inflation.

A simple definition of inflation: the decline in a currency’s purchasing power; or, an increase in the general level of prices for goods/services. A pretty big influence on money’s inflation is its scarcity.

Let’s be frank — the dollar isn’t scarce. More of it can be printed at any given time. In fact, around 30% of all the US dollars in existence were created just in the past 12 months. They got that money printer working triple overtime.

This isn’t the case with bitcoin.

The core code was designed to only create 21 million bitcoin (ever) and every bitcoin can be divided into 100 million units called “satoshis” or “sats” (like how $1 can be divided into 100 units called “cents”).

As I write this on Apr. 23, over 18.6 million BTC have been created, and about every 10 minutes, a specific amount of new bitcoin is created in a process called “mining”. This mining process is the only way new bitcoin can be created and added to the bitcoin network.

Mining is when a specialized computer is used to solve a random math problem, verify transactions on the bitcoin network and add them to the blockchain. When a computer is first to successfully verify a “block” of information, they are rewarded with bitcoin (some from the newly created bitcoin, some from the network’s transaction fees). And the kicker: literally anybody can run these mining computers (the real question is, what are your chances of winning the race to finish first).

The “block reward” (the bitcoin that was just created from mining) is cut in half about every four years — this was designed into the network. The last time that this happened was in May 2020, when the block reward was cut down to 6.25 bitcoin. The next one will be sometime in 2024, cutting the block reward down to 3.125 BTC. This process will continue until all 21 million bitcoin have been mined (the last bit of bitcoin should be mined some time around 2140).

All of these “rules” are enforced by the many thousands of different devices that run the bitcoin program. These computers are the bitcoin “nodes”, and they work with the bitcoin miners to ensure that all of the info being added to the bitcoin blockchain is accurate. If anyone wants to change something about the bitcoin program, there has to be a “majority consensus” among the nodes — this means that a minimum of 51% of the nodes must agree to the change in order for it to be implemented.

This combination of active bitcoin miners and bitcoin nodes across hundreds of thousands of individual devices (with more being added to the network each year) helps to secure the network and ensure that all of it’s information is verifiable and can’t be tampered with.

That’s Cash Though.. What About Gold?

Great question.. and I’m glad you asked.

At this point, even though people start to have doubts with cash, they tend to fall back on the “traditional wisdom” of gold being the most secure asset. It’s said to be a great store of value for a number of reasons, but let’s look at each of these a bit closer, side-by-side with bitcoin:

Non-Perishable — since gold is highly durable and lasts a really long time, this helps to maintain it’s value. Ok.. but bitcoin, being purely digital, will always exist, outlasting any tangible good that we can have.
Easy Asset Transfer — with gold, you can easily transfer your wealth. Ok.. but bitcoin, being purely digital, allows you to do this significantly faster, easier and cheaper. Moving $1M worth of bitcoin across the world is way more efficient than moving $1M worth of gold.
Widely Valued — one reason that so many people love gold is because.. well.. a bunch of other people love gold too. With gold you know that you have something that others will want. Ok.. but bitcoin has been the best performing asset over the past 10 years, with even multi-millionaires and billionaires now flocking to the network to stake their claims.. and this demand shows no signs of ever going away.
Scarce — with gold, we know that there should only be a finite supply of it on Earth, so there should always be a demand. Ok.. but unlike gold, bitcoin has a definitive scarcity. Someone could find a random gold mine at any time, adding to the world’s gold reserves, thus decreasing the overall supply’s value. Gold is also a basic, metal element that can be created in a lab from other elements (this isn’t common because the process is pretty expensive and inefficient). ALSO, with space travel slowly approaching on the horizon, the probability of finding even more gold is even higher.

Gold has held it’s spot at the top for hundreds of years, and rightfully so — it’s a remarkable asset.

..bitcoin is just all around better.

Still Not Convinced? Ok..

At this point, you may still be met with a bit of resistance, but that’s ok. You are punching more holes in “traditional wisdom” than there are in SpongeBob, so uncertainty/disbelief is to be expected.

Let’s roast gold just a little bit more..

How easy is it to verify the authenticity of your gold? The answer: not that easy. You have to rely on a third party to validate your gold (which costs money) and, above all else, you have to trust that the third party is reliable.
Bitcoin can be easily verified and you can do it on your own, for everyone’s favorite price: free.99 (where else can you find this?)

How easy is it to buy/sell your gold? The answer: not that easy. In fact, if you are trying to buy/sell large amounts, it can be a total headache. In most cases, a third party is needed to mediate the sale, especially if the buyer/seller is a complete stranger. Also, you would have to wait until the operating hours of the third party for any of this to even happen. And to top it all off, you will more than likely want to store your gold with a reputable third party to make sure that it’s secure.
The bitcoin market is open 24/7/365 and can be bought/sold almost instantly on platforms that never close. And while these third party platforms make it easier to facilitate these things, they aren’t necessary for the purchase/sale of larger amounts. Also, bitcoin is stored solely on the blockchain, and the technology that we have today allows us to access all of our bitcoin from something as simple as a phone, laptop or even a USB drive.

If They Still Don’t Get It.. They’re Probably Not Really Trying To

After all of this, they still don’t want to consider bitcoin as a possibly better alternative to the other asset classes? Well.. there’s not much else that you can do at this point..

…

..except talk even more about why Goku and Superman COMBINED still can’t beat bitcoin!

Let’s drop a couple more bars on ‘em:

On average, bitcoin transactions occur in seconds/minutes and can cost fractions of a penny.
People are developing “second layer” networks on top of the bitcoin network (like the Lightning Network) to address moments in time (like we’re seeing right now) when the network has super high activity and, as a result, sees increases in the normally negligible transaction fees and decreases in the normally fast transaction speeds.
Bitcoin is a global asset, so when you travel to countries that, unlike many of the “first world” countries, have unstable governments, devalued currencies, and low access to resources, people are rushing to bitcoin. So while you may see it as an option, others around the world see it as a necessity.
Bitcoin is censorship-resistant, so no matter what circumstances you live under, as long as you fully own your bitcoin, no government/entity on this planet can restrict your access to it or take it from you without your consent.
There are currently thousands of merchants and organizations that accept bitcoin (either directly or indirectly) as a legitimate form of payment — from bodegas and “mom & pop” shops, to large multinational corporations like Microsoft, Tesla and Starbucks (for the “can I buy a cup of coffee with it?” people).
People love to throw out the “Well, what if the world’s internet/electrical grids shuts down? How can I use my bitcoin then?” argument. Well, aside from people already actively working on solutions for that exact situation, people often don’t look at the full picture. If our world’s internet and/or electrical grids were to suddenly shut down, “money” would be one of the least of your immediate problems.
The current market cap (total amount invested into the market) of gold is over $11 trillion and the current market cap of bitcoin is roughly around $1 trillion. If bitcoin is seen as equal to gold, then it’s fair to say that it’s market cap will at least match it, bringing the price of each bitcoin from about $50k each to about $550k each. If bitcoin is seen as better than gold, then.. you know..

Well.. I’m Sold. How Do You Actually “Get” Bitcoin?

Easy — you can buy it, trade for it, or just earn it. It’s all laid out here.

Wrapping Up

Hopefully, this guide will serve you well in some of the conversations that you’ll be having with your older family members and friends.

A lot of information is hammered into us when we are young and has been passed down for generations as “conventional wisdom.” Fortunately, we are now living in the digital age, where we are able to verify information and figure out for ourselves what’s true and what’s just blatantly wrong.

That being said—it can still be tough, especially for older individuals. They can become so set in their ways, that it’s even more difficult for them to “unlearn” all of the incorrect info that they had been fed all their lives.

The key here is patience, though. If you take your time and slowly walk them through the information, they’ll eventually come around.

With bitcoin, they always eventually come around.

Besides — in most cases, these older individuals only need to understand the monetary and the security aspects of bitcoin for them to at least consider checking it out. Try not to overcomplicate it — just keep it simple:

Bitcoin is a computer program with a network that keeps track of all the transactions of its native currency, the bitcoin.
It has the most secure digital network that we have seen to date.
It has no central authority and is regulated by all of its participants.
It outperforms every other asset in existence so far.. and it’s barely over 10 years old.
The more people that enter the field, the more innovation we will see, and the better the network will become.
Gold merely adopted the internet — Bitcoin was born in it.. molded by it.

So in the words of bitcoin’s mysterious creator, Satoshi Nakamoto: “It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy.”

*I am not a financial/investment advisor, this article is not financial/investment advice and any information shared here should be personally researched prior to making any financial/investment decisions.*