Helping Families Understand Bitcoin
It’s that time of year when millions of digitally savvy millennials and Gen Zers trudge home to their parents for the annual Thanksgiving Day meal—and have “The Talk” about cryptocurrency. They want to know what all this new-fangled Bitcoin stuff is that’s sweeping the globe, and whether they should get on board. Resource
Explaining Bitcoin to family members is a delicate task. Children can’t absorb the complex jargon of cryptocurrency, and adult family members may feel intimidated by the new technology. A simple, well-thought-out explanation will give them confidence in their understanding of the emerging monetary revolution.
Simple Ways to Teach Bitcoin to Families
The most basic way to describe cryptocurrency is that it’s digital cash. Just as the British pound exists both in physical form (paper notes and coins) and digital form (a bank account balance), so too does Bitcoin. But unlike the pound, bitcoin isn’t issued or controlled by any government or central authority. Instead, it’s a decentralized peer-to-peer network, with a distributed global ledger called the blockchain. It’s maintained and operated by individuals and businesses called miners.
People use bitcoin to pay for goods and services, transfer money globally, or invest in it by holding or lending it. They may also save it for long-term goals, like retirement or a down payment on a house, earning interest in the process through investing, lending, and staking. A key risk of cryptocurrency is that it can be stolen or lost. This can happen through malware, hacking, or a loss caused by human error, such as misplaced hardware wallets or a family member accidentally deleting a bitcoin wallet.