One of the biggest challenges of introducing cryptocurrencies to friends and family is that they might not get it the first or second time that you try to explain it. It’s like they speak an entirely different language. They may dislike their bank, but see it as a necessary evil for participating in everyday transactions. They may not get the global economy’s economic and technical inefficiencies that cryptocurrencies can solve. If you want to explain cryptocurrencies to someone who hasn’t gotten it yet, not only do you have to explain it in terms of how they can benefit from cryptocurrencies, but you also have to be able to explain it in terms that a 6-year-old can understand.
This Doesn’t Mean They’re Unintelligent
The difficulty in explaining cryptocurrencies to family does not necessarily mean they’re unintelligent. It just means that it might have been a while since they took that economics elective in college or they slept through it because they didn’t think it would ever be useful and they only needed a C to pass. Instead of being condescending, you may need to remind them of basic economic principles when discussing cryptocurrencies.
Analogies may help explain some of the concepts behind Bitcoin. Western Union often acts like the postal system of payments, in which it can take up to a week to get your package unless you want to pay extra for overnight shipping – and that’s true even if you aren’t sending your packages (or your payments) internationally. You may remember that issues from a couple of Christmases ago in which UPS failed to deliver some packages on time because so many people were buying last-minute Christmas presents. This is what happens when UPS trucks are constantly full and drivers are overwhelmed. Deliveries don’t happen in a timely fashion if there is too much demand on the system and the infrastructure just isn’t there to support it.
Unfortunately, the same analogy seems to work for Bitcoin these days, but “alternative” cryptocurrencies like DASH have been making investments into the infrastructure they need to increase the number of packages they can handle at any given time and deliver those packages faster. Because they can handle more throughput, they can stay competitive by keeping fees down. This works on the same principle as what would happen if UPS were to invest in more cargo planes and pilots that can be used to make faster deliveries. Suddenly UPS doesn’t have to make excuses for disappointing kids by not making Christmas deliveries on time and shipping costs aren’t going through the roof due to limited space on the cargo planes that UPS use because UPS has invested in increasing its shipping capacity. When you use a cryptocurrency with fast transaction speeds to buy your gifts because the cryptocurrency actually scales up its capacity when it needs to, neither do you have to make excuses for late gifts that made you look like you forgot an anniversary, birthday, or special milestones.
This is the kind of analogy that kids can get if they get excited by an approaching UPS truck because they know a cool new toy is coming. Alternatively, you could say that Santa’s reindeer got sick and that’s why the presents were late. It’s hard to deliver packages overnight if the reindeer can’t pull the sleigh. And cryptocurrencies’ virtual reindeer have a hard time delivering transactions if the capacity for delivering fast and cheap transactions just isn’t there. That’s something a 6-year-old might get.
They Usually Won’t Care About The Tech, Though.
When people ask me about Bitcoin, they usually don’t care much about what goes on under the hood. Unless they’re into accounting or cryptography, they usually won’t get things like blockchain or POW algorithms. A good marketer will be able to explain these things in plain English if the subject comes up. A great marketer will be able to explain how cryptocurrencies can make people’s lives better.
In other articles, I’ve described how cryptocurrencies and blockchain apps have the potential to increase transparency in the supply chain and include the less fortunate in the global economy even when the international financial sector won’t look their way. That sort of thing makes cryptocurrencies easier to sell to people who care about voting with their money by supporting socially responsible businesses.
To start with, though, you might talk about how cryptocurrencies can benefit them directly. They might have been looking at gold and silver as a way to diversify their investment portfolio. Bitcoin, Litecoin, DASH, Monero, and Ethereum are more ways that they can diversify their investments, with the added benefit being that these major cryptocurrencies can be spent on essentials like Amazon gift cards if you run into a situation where you would otherwise have to choose between buying groceries and paying the rent. (I’m serious. Amazon Prime Pantry is a thing and so is eGifter. It’s a lot easier to spend Bitcoin on gift cards than it is to spend gold coins.)
Cryptocurrencies also make it easier to set and stick to a budget because it’s understood that you can spend as your cryptocurrency of choice on whatever you want, but when it’s gone, it’s gone. This drives home the economic principle of opportunity cost: Do you really want to spend the money on a pretty pink dress when you could use that to buy a new Apple watch later? With Bitcoin, it’s a lot harder to overspend than it would be if you use credit cards – or, at least, the time it takes to buy more Bitcoin could give you time to rethink that impulse purchase and forces you to confront the cost of your expenditures.
In fact, giving your kids their allowances in DASH can be a good way to teach them about managing money. You could say that a candy bar costs between 0.001 and 0.005 DASH depending on the cost of the candy bar and this might help a kid who might otherwise consume too much chocolate learn that he doesn’t always have to go for the “king sized” candy bar, at least. They may even figure out that they can earn more cryptocurrencies by doing microjobs and bounties.
Don’t laugh. There’s a kid who likes to blog about her favorite books and she could earn money through Amazon’s affiliate program while doing it. Kids are pretty good at finding ways to do something that will get them some positive reinforcement like earning more money to spend on candy bars – though, of course, it doesn’t hurt if they can have fun while doing it. If you introduce them to cryptocurrencies and use it to pay their allowance, then they’ll usually catch on pretty quick and do a little exploring on their own. So don’t be surprised if they can suddenly buy that toy they’ve been begging for because they’ve gotten smart, saved their allowance, and earned cryptocurrencies by hitting the faucets. Just don’t forget to tweak your parental controls to suit.
If you can get your kids to understand cryptocurrencies enough to actually use it, then you can use some of the same principles to convince other family members who might currently consider cryptocurrencies as Internet funny money. Analogies can work for when cryptocurrencies come up in the conversation. You might prefer to show them how it works by showing them how to download a wallet and get their first bitcoin. With a little work and ability to explain concepts in plain English that a little kid could understand, you could get your friends and family to use cryptocurrencies like pros and wonder why they didn’t discover how cool it is earlier.