How to Explain Bitcoin's Necessity to AmericanssteemCreated with Sketch.

in #bitcoin7 years ago

As many of you have likely experienced, explaining bitcoin to people can be difficult. A combination of risk avoidance (bitcoin sounds risky), herd behavior (waiting for everyone else to normalize buying bitcoin), and ignorance of monetary theory (many still believe the dollar is backed by gold) make explaining some of bitcoin's biggest benefits incredibly difficult to friends and family.

Mind you-I don't fault people for being ignorant of our monetary policy. It manages to be even more complex than bitcoin, but nobody seems to mind so much as the purchasing power of the USD remains stable over time.

And that's the problem with explaining bitcoin to Americans: the USD has remained stable over time.

Now, I know there are plenty of libertarians and hard money advocates who will disagree with that last statement. It is certainly complicated. Furthermore, I have difficulty believing fiat money (backed by faith in the government, not gold) is the best system out there. However, I do think that the US and the Federal Reserve have done a fairly decent job over a number of decades.

But this article is not about hand waiving away the problems of the Fed; it's about explaining bitcoin to citizens of the US. Why do I bring up the Fed?

Americans have never had to deal with mass inflation or hyper inflation

The greatest monetary memory in our culture is the Great Depression, and you still see remnants in how this affected our grandparents and great grandparents. People remember bank runs, but they don't remember their dollar losing value rapidly.

Contrast this to a great deal of countries around the world. Argentina suffered a 4 to 1 devaluation fifteen years ago, when overnight the peso went from being pegged to 1 USD in value to 1/4 USD. Venezuela's problems have made for heartbreaking news as their money has devalued to the point it doesn't fit into wallets. Over in Europe, the memories of post Great War Germans wheelbarrowing bills to buy bread are as fresh as those of the Great Depression for us.

hyperinflation.jpg
Stacking money like Lego, although Lego are probably worth more than this pile of bills was

In short, there are a large number of economies where residents are far more likely to take on the risk of holding bitcoin, which has a chance of gaining in value, versus storing their savings in a money that is very likely to lose a great deal of value.

When explaining why bitcoin is important to Americans, tell them how it is already being adopted by countries whose monetary systems are awful.

There's not a compelling reason for somebody to put bitcoin on their phone right now to buy coffee with it, if they live in the US. Besides techies who enjoy doing these types of things for the novelty, mass adoption from USD to bitcoin is about as likely as mass adoption to the gold standard. The system in place is good enough for most people, and they're going to feel, rightfully, that bitcoin is not useful for them. However:

By reminding them that bitcoin is incredibly helpful for those in countries who can't manage their own monetary systems, there is an easy growth model to demonstrate that helps people understand why bitcoin matters.

To put it another way, we Americans don't like to think "it could happen here" when it comes to mass inflation, and telling them to buy bitcoin in 2017 (when the USD has been strong for nearly a decade, after all kinds of dire predictions about hyperinflation) because of mass inflation is a non starter. You might as well tell them they can buy their trip to Mars with bitcoin*.

So, try this out next time you find yourself talking to friends and family about bitcoin, and let me know in the comments how it goes!

If this story is helpful, please consider Following and reSteeming.

*I'm only half kidding here, although I wouldn't lead with this argument

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Hey @protegeaa , would love to offer you a slot on my podcast sometime.

It is about people doing remarkable things, whether entrepreneurs or not.
Where we talk about what you are doing, believe in and what difference you are making in the world.
It is part youtube channel where the mission is to help 1,000,000 entrepreneurs become remarkable, and the podcast acts as a way to share stories and connect with people.

Here is the playlist of the existing episodes: https://www.youtube.com/playlist?list=PL5CpCNPna6p95oJfKPew0N3ZT0k-khdgg

It is audio only over skype. Would love you to come on the show and talk about yourself. Does this sound of interest to you?

Thanks @nantchev ! What a generous offer-I'll take a look at your show and figure out if I may be able to add value to your audience.

Very good. Most people don't know about the dollar index.

Exactly! It's way more technical than most people care to be.

Nice article. Just tell draftkings to start accepting bitcoin and poof everyone will get it lol.

Their business model is probably pretty solid, but an upstart could use the blockchain to compete with them...maybe Gnosis will have somebody put an app like that using their tech.

Fantasy Football season is fast approaching :), what better way to introduce your friends to cryptocurrency than through the most popular computer game around.

The quick transfer of money possible with decentralized currency will no doubt impress anyone who participates. Doing small things like this are good ways to show off the benefits trustless systems like the blockchain.

Great idea-I am terrible at it, but can see how useful it might be to use bitcoin for the buy in (and weekly prizes).

Until some kind of government over sight is in place...I don't think main stream America will come all in...they are too used to having reassurances that there money is "safe"...like in a bank or at least regulated like stock market...

I agree that main street America likes that assurance, and that is a huge obstacle to bitcoin and other digital currencies being accepted here.
But I do think Americans will pile in if CNBC and the Jim Cramer types start telling people to buy a little bitcoin.
That's a big "if" though.

If that guy started pumping bitcoin I'd run to the other side of the playground.

Probably a good "sell" indicator!

I agree...but I think before he can go on tv and say such a thing...it has to be more regulated...

Well said! Long term I would think that a globally distributed economy would fair better in terms of inflation/deflation as it is devoid of territorial politics.

I think we'll see a federated system where a few major currencies survive (USD, Swiss Franc, Chinese Yuan, Japanese Yen) and a lot of smaller countries and territories start using bitcoin or digix gold, or some other stable digital currency.
I'm incredibly curious how it will affect the modern concept of the nation state.

I just show people how much I've made since crypto started taking off. Then I show them the deposits into my accounts. I also show them the passive income I make on a daily basis, (which is about how much they make each day working their little asses off) and that usually does the trick. I've already converted 5 people doing this.

They've heard of AT LEAST Bitcoin, so the seed has been planted. They just need to see someone THEY KNOW PERSONALLY show them, in person, how it's not just "fantasy". They can prosper as well. The tricky part is getting them to want to invest more than $100 into cryptos. Nothing will happen for $100.

Way to go! I'm glad to hear you have been so successful. Will follow so I can read what has helped you.

Generally, I am not comfortable sharing my gains with people, and others feel the same.
If I ever get wildly successful on steemit that might change, though...

I think the biggest hurdle is that it seems to good to be true, or too technical for most people. You have to walk them through it. And most will be skeptical unless you can show them proof. Its just the way it is.

I agree that it is too technical for most people, which is why showing them that countries with hyperinflation use bitcoin sort of short circuits the need for walking them through it.

Because of government fiat money is worth,
Just few people understand how dollar printed without backed by anything,
Keep share anything you want to share to the others

Yes, few people understand, which is why I have found trying to explain that to explain bitcoin is a time waster.

For Americans, it is easier to show them another country's problems and how bitcoin can solve them.

For me, explain this to my friends just get them laugh out loud,
But i always try to change their mindset about money and bitcoin

Yeah, I don't try to evangelize too much about crypto to friends. If they laugh, I laugh with them, as it isn't something to be too serious about.

That sounds like a good idea. Plus a lot of people involved with charities would be more interested that way too. Upvoted and Resteemed.

Thanks Carlo!
Great point about charities...that may be worth its own blog post soon!