How To Explain Cryptocurrency To Friends & Family

Samantha Standish
May 28 · 3 min read

“Cryptocurrency is fast, cost-effective money without a middleman.”

Photo by Jason Leung on Unsplash

Cryptocurrency is like you and your friend standing in a park.

Under the current banking system, you’re about to give $50 to your friend for picking up a bed frame for you the previous week when this guy comes out of nowhere and takes the $50. He insists that you and your friend can’t handle the transaction and that he has a duty to step in and complete it for you.

Immediately, he takes off and runs around town. He gives $2 of your money to pay off a debt, pockets some of the change and hours later comes back and gives your friend the remaining $47.50 insisting that he’s done you a service. This is the current financial system.

Some people thought that this system was inefficient and unnecessary. They thought that you and your friend could handle the transaction directly and that it would be cheaper and faster without the middleman. So, they invented cryptocurrency. With cryptocurrency, you give the $50 to your friend. It doesn’t require a representative to complete the transaction for you.

Cryptocurrency is called a peer to peer (p2p) cash system because it involves you sending money directly to another person using a unique form of software. If you want to pay your electric bill, for example, you send the money directly to the electric provider using this software. There’s no bank or other middlemen between you and the electric company. If you’re the electric company, you receive payment directly from the client instantly using this software. No funds are held up by third parties. For this reason, cryptocurrency is very attractive to both payers and payees.

At present, enormous numbers of individuals worldwide don’t have access to resources. They can’t get bank accounts, they can’t raise money, and they can’t get loans. The system as it stands creates artificial barriers to sustenance and expansion. This is what makes cryptocurrency appealing. Anyone can participate with the system. You don’t have to ask permission or prove anything to anyone to use it. What’s more, it allows everyone to become an investor. Cryptocurrency is participatory in a way that’s just not possible under the current monetary structure.

For these and many other reasons, cryptocurrency isn’t going away. So, it’s helpful to your family and friends to understand this new invention. When someone asks you what cryptocurrency does, you can answer them by explaining what it doesn’t do. It doesn’t get other people involved in how you use your money. It doesn’t tell you how much money you can spend. It doesn’t prevent you from accessing your money. It doesn’t ask you to justify the reason that you want to move your money. It doesn’t put a hold on your money. It doesn’t charge you for using your money. It doesn’t dictate where you can or can’t send your money, and it doesn’t deny your ability to invest your money.

In sum, cryptocurrency allows you to decide how to use your money. It allows you to complete direct transactions with anyone anywhere within seconds, it allows you and you alone to access your money, and it allows you to use the system without asking for permission.

That direct control over your money makes cryptocurrency something entirely new and something that your family and friends can understand quite easily. No technical jargon is required.

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Samantha Standish

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I’m a writer. I focus on the why behind the what.

The Startup

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