Four Ways of Explaining Crypto in Everyday Language

Cryptocurrencies are rapidly gaining popularity, but a huge portion of the global population still knows very little about this relatively new type of financial assets. Many people don’t understand how crypto works and how can they use it. The fact that cryptocurrencies don’t exist physically, like cash, is sometimes frightening to newcomers and crypto enthusiasts often can’t find the right words to explain the core characteristics of digital currencies in simple, everyday language.

That’t why we’ve prepared a blog post with four ways of explaining crypto to different people.

Explaining Crypto to Your Grandparents

Cryptocurrencies are a new form of money that isn’t issued by central banks and government institutions like in the old days. In fact, you can’t put it in your wallet or store it in a bank because it doesn’t exist in paper form. 

Instead, you can buy crypto through specialized services on a mobile phone or through a computer and when you buy it, you can store it on your device. So basically it’s digital, computerized money, but you can use it just like standard cash with vendors that accept cryptocurrency.

For example, Raków Częstochowa, one of the oldest Polish football teams, is just introducing the possibility to buy match tickets with cryptocurrencies.

Explaining Crypto to Your Parents

Cryptocurrencies are decentralized digital money. You know how you use a credit card or debit card to buy stuff at a store without physical cash? Well, cryptocurrencies are similar because you can’t have them physically in your wallet. However, unlike the money on your payment card which is stored in your bank account, cryptocurrencies are kept in special apps called cryptocurrency wallets, which you can install on your smartphone or computer. 

The most famous cryptocurrency is Bitcoin. Also, crypto isn’t issued or backed by governments and central banks. It isn’t controlled by any institution because crypto is decentralized and uses digital networks, called blockchains, to execute transactions. So instead of using a closed banking network like in the case of bank card payments, when you pay with Bitcoin or another cryptocurrency, you’re sending digital cash through the blockchain network.

More and more merchants and companies are adopting crypto and blockchain technology, and there are over 300 million people in the world who are already using cryptocurrencies for payments or as an investment. That's because the prices of cryptocurrencies can rise or fall pretty dramatically, so it’s like a type of stock investment, except that its price can fluctuate much more in a shorter period of time.

Explaining Crypto to a Child

You know how you need to pay for everything you want in a store with money? Well, crypto is also money, but you can’t hold it in your hand like standard money. 

Cryptocurrencies are kept on phones and if you have some crypto of your own on your phone, no one can take it from you because you have a unique code protecting your crypto. It’s only yours, and you can buy all kinds of stuff with it. You can buy video games or special, unique digital pictures called NFTs. Also, if you hold some crypto on your phone for a longer period of time, it might become much more valuable after a few years. 

Explaining Crypto to a Friend

So you heard about Bitcoin, but you don’t know anything about it? Well, it’s actually quite simple and to be honest it’s revolutionary compared to banks and standard cash. You see, all cash is issued and controlled by central banks and governments. Bitcoin and other cryptocurrencies are created by blockchain developers who use this brand-new blockchain technology based on decentralized digital networks to transfer crypto between users. Instead of bank accounts, people use crypto wallet apps on their phones or computers to send and receive crypto.

In fact, over 300 million people already use some digital currency to make payments or as a long-term value holder.

The best thing is that crypto transcends national borders because you can instantly pay an e-commerce order with crypto in the US, although you’re located in the EU. You can also quickly wire money to somebody in a different country without having to wonder about banking times and rules. Finally, if you want to cash out your crypto and sell it for traditional cash, you can do it easily and withdraw your cash to a bank account.