25. September 2023

3 Ways to Explain Bitcoin at New Year’s Eve

Family Meal Survival Guide – Bitcoin, Bitcoin…

It’s a great invention from Satoshi Nakamoto. But how do you formalize this „great“ side to your family? If the question „but what exactly is Bitmachin? is the question „What exactly is Bitmachin?“, don’t worry about the holiday meals, don’t stress! Here are a few cartridges in advance to prepare your argument.

A decentralized, universal and fast currency

Since its inception in 2009, Bitcoin and its network have strived to be completely independent of banks and states. This is made possible in particular by its blockchain. Behind this somewhat strange word is a distributed registry: a kind of account book of transactions, common and accessible to everyone, everywhere around the planet.

Anyone can thus check the reality of spending from such accounts to such accounts (in a pseudonymous way). It is impossible to cheat, since the false register would be different from all the others.

The validation of transactions is done by a network of specialized computers, via computer calculations called mining.

Wherever you and your recipient are on the planet, your transaction will be validated in about ten minutes (this is different from bank transfers), directly over the counter, without going through an expensive intermediary, such as a bank or PayPal.
A safe haven: digital gold

Bitcoin is also increasingly seen as a store of value. This means that, like gold, it will at least maintain or even improve its purchasing power over time.

Indeed, like the gold metal, Bitcoin is rare. Only a small quantity is produced, which cannot be increased. This production even decreases regularly (about every 4 years), which makes Bitcoin deflationary on principle.

Moreover, the maximum amount of Bitcoin has already been set in its computer code. There will only be 21 million in total, and not one more.

Protection against inflation of state currencies

These characteristics make Bitcoin an ideal defense against the so-called fiduciary currencies, i.e. all the currencies issued by countries (the dollar, euro, …), which are based on the sole trust in these countries to repay their debt.

Since Bitcoin does not depend on the goodwill of a government or central bank, it is impossible to print it at will. It is precisely these massive monetary impressions that have caused (and still cause today, see Venezuela) hyperinflation.

When it is slight, inflation is a disguised form of devaluation of a fiduciary currency. But in the case of hyperinflation, it is the entire economic system of a country that can collapse, with a national currency that is no longer worth anything.

This is why large companies listed on Wall Street (such as MicroStrategy) and investment funds (such as Grayscale) are beginning to take an interest and invest in Bitcoin: to protect themselves from a depreciation of the dollar.

So many good reasons for your guests to take a closer look at the strange cryptography that is Bitcoin. Even if its technology may not be easy to understand at first contact, come and discover its revolutionary and exciting qualities first!