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BitCoin: What Your Grandparents Must Know Today

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Bitcoin's been around since 2009, and while it's no longer the sole province of hard-core Web geeks and fortunate (if occasionally forgetful) speculators, it's not exactly a household name, either. In a 2014 survey conducted by digital finance and media giant The Street, only two percent of those surveyed said they owned Bitcoins, more than three quarters had never heard of the virtual currency, and less than a fifth said they'd ever consider using Bitcoin (or any alternative to traditional currency). A full 80% said they'd rather own gold compared to any kind of crypto-currency, but given mankind's long love affair with shiny metals, that's hardly a surprise.

What is surprising, however, is the breakdown of Bitcoin familiarity among different age groups. While older folks (such as your parents or dear old Gran) might seem unlikely to care about such cutting-edge financial wizardry, the same survey that underscored Bitcoin's low profile with the general public also revealed a surprising stat: respondents who fell into the 50-to-64-year-old demographic were the most familiar (at 30%) with Bitcoin, outdistancing younger generations by 10%.

That said, a 2013 survey of British Bitcoin users found that the average "Bitcoiner" is most likely to be a man in his early 30s who's got a full time job, a relationship, and a love of capitalism (or at least the virtual variety). So while your Dad or your Gran might be interested in Bitcoin, if you're a young fellow with a nerdy vibe, it's possible they might be looking to you to explain just how they can turn that pension into sparkly cyber-lucre.

Fortunately, the basics of bitcoin are fairly easy to master, and line up well with examples from the non-virtual world (including wallets and key codes). So while it remains unlikely you'll be called upon to explain the intricacies of mining and hash rates at the next family dinner, it probably would behoove you to review the basics (just in case Grandad decides he wants to convert your inheritance!)

How to Explain Bitcoin to your Grandparents

PS. Be sure to checkout our article on webmaster referral programs that payout in bitcoin!

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How to Explain Bitcoin to your Grandparents

Have you ever tried to explain Bitcoin to your grandparents? It's not hard if you get the basics right.

What's Bitcoin Dear?

Bitcoin is a currency, just like $, £, €, ¥. But Bitcoins are a decentralized, digital money created, held and spent electronically around the world.

Bitcoin is similar and different to conventional money:

$, £, €, ¥BTC
It's backed up by...Products, services, and the economy of the issuing countryProducts, services, and a sound consensus of users
It's governed by...Central BanksMathematics and distributed computing
International transfer takes...Several daysA few minutes
International transfers cost...Up to £10 or 2-3% of a transaction0 to $0.01
Once you have paid...A chargeback is possibleNo chargebacks

Imagine a bank account or a credit card: instead of paying in cash, buyers transfer conventional money via a bank. Bitcoin works the same - you can buy products on the internet or cash it in for other currencies. What's new is that you cut out the middlemen: banks and payment companies.

Get Bitcoin!

Buy it at an online exchange or by direct deposit

  • Picture a bank where you open an account in a foreign currency:
    1. 1. You walk in
    2. 2. Open an account
    3. 3. Hand in some money to buy foreign cash to put on your new account
  • In Bitcoin's version:
    1. 1. You log in to the Bitcoin exchange or direct deposit platform online
    2. 2. You open a Bitcoin 'account' (i.e. a 'Wallet')
    3. 3. Wire money ($, £, €, etc.) from a bank account or pay at a local Moneygram agent in cash to get bitcoins at current exchange rates.

Buy physical Bitcoins

  • Order from reputed, independent producers. Be prepared to pay more for physical Bitcoins than their face value.

Mine it

  • Buy a mining computer and unleash it in your spare bedroom.

Store your Bitcoins!

In your 'wallet'

  • Forget your leather billfold - A wallet is a digital storage on the internet, on your computer or your mobile phone. A wallet is like a bank account without a bank.

In your secret drawer/stash/pillow

  • Even physical Bitcoins can only be spent online. Each physical coin has an online address that you can access with the password (private key) hidden in the coin. Then, you can transfer the Bitcoin to your wallet or spend it right away.

A Bitcoin wallet contains:


  • Imagine a bank account number. Your Bitcoin wallet also contains such a number (or multiple ones) and each address has a Bitcoin balance. During a transaction, the address is visible to all users in the network.

Private key(s)

  • This is a secret code (similar to a PIN) generated for each address where you hold Bitcoins. This key is known only to you and allows transferring money from a Bitcoin wallet to another.

Spend them!

  1. 1a. Online at more than 15,000 online retailers.

    • Open your wallet using your own Bitcoin address...
  2. 1b. At point of sale: In Bitcoin-friendly cafes and shops worldwide, If you have smartphone access to your bitcoin wallet.

    • Use your phone to scan the code shown on the bill.
      • Approve the transaction on your phone.
        • Wait for the Network to verify this transaction. This takes on average 10 minutes...
  3. 1c. At a Bitcoin exchange - swap Bitcoin for $ or other currencies.
  4. 2. Use your private key to authorize a transfer to the seller's Bitcoin wallet.
  5. 3. The transaction is processed by a network of 'miners': computers that verify your transaction.
  6. 4. The transaction is encrypted = turned into an alphanumerical code.
  7. 5. Then, it is included in a 'block' with other transactions of the past 10 minutes.
  8. 6. The transaction block is processed by thousands of miners for verification. They are like virtual bookkeepers who record every transaction in a general ledger transactions called 'block chain'.
  9. 6a. Once a block is 'mined', miners reap a reward of 25 Bitcoins and sometimes a transaction fee. You can join the miners to earn your share of the mining rewards and fees.
  10. 7. Everybody sees your transaction and address in the block chain - but not your private key, your Bitcoin balance or personal data. This ensures that no Bitcoin is spent twice, no Bitcoin is hijacked and no personal data is exposed.
  11. 8. Transaction confirmed! You have spent your Bitcoins!

Right-O. But is it real?

As real as your money on a bank account - but you cannot spend it in cash and Bitcoin's acceptance is far from universal yet.

Can I buy my veggies with Bitcoin?

Probably not at the local grocer just yet, but it's only a matter of time.

Is a Bitcoin transaction cheap?

Miners' fee typically ranges between 0 and 1 US cent - cutting deep under typical credit card fees.

Wonderful. Is it safe?

A Bitcoin transfer can be safer than credit card transactions as it doesn't involve personal and credit card data. You wallet and private data are stored on your computer or your online wallet - it's up to you to keep them safe.

Success? Good. Now wait for the next family gathering to bring up definitions of 'hash rate', 'difficulty' and 'orphaned blocks'. And try to put up an honest smile when his Bitcoin balance dwarves yours.

*All currency quoted is in USD.


WhoIsHostingThis Team

About WhoIsHostingThis Team

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How to Explain Bitcoin to Your Grandparents [Infographic] | CoinSpeaker

May 14, 2014

[…] However, it’s no longer an impossible thing – thanks to the infographic below, created by our friends from WhoIsHostingThis website. […]



June 22, 2015

as far as my understanding goes bitcoin is imaginary money used to launder money or use to make illegal deals. in reality its only value is its conversion rate into real money as that is how its valuation rate is defined.


Mangalore Cafe (@mangalorecafe)

March 7, 2017

Wow now Bitcoin brainwashed zombies are preying on old people. Bitcoin is play money. That is the evolution of bitcoin which (for obvious reasons) no one want to talk about when educating people about bitcoin. This only proves dishonesty of bitcoin promoters. Some are sincere but others are just working for international money launderers who saw potential to move large amounts of money offshores.
Bitcoins was first play money yes the “coins” you still see in computer games and now our cell phones how you play play and play and collect coins. But they also allow you to buy these coins.
Now you must have come across people your friend who are experts in the game and collect a lot of coins. But since these guy are playing all the time they are pretty much broke.
This is when someone like a video game store guy or a gamer who was also into some business like a cafe or a grocery store accepted this “play money” in return for a good. He or she knew that there were enough gamers who were willing to pay and who did pay the gaming company money for “coins”
So what they did was if a guy with lot sof play money wanted something that costs 100 dollars.
And if the cost for buying 10000 “coins” (of a particular game money) was 100dollars he simple offered the guy with lots of coins that product for 20000 “coins”. He now has 200$ worth of game “coins” which he sold to some gamer who was bad at the game for 150 dollars. That guy obviously bought it. cause online he would have to pay 200.
This is how bitcoin evolved.. Bit coin then became a kind of in between currency for gamers. It so immature they just make it so hard to generate it and this was used as an universal currency between gamers for a long time. It was only when some smart guys who did a lot of this making double money and turned millionaires and also when a lot of people started generating tons of bitcoins did money launderers and terrorists saw potential in bitcoin. While these nerds living in their mothers basement dreamed what if my play money actually become real. That dream was made true. Todya you can se these nerds with their computers one 24.7 are powering an imaginary currency. Money launders have convinced certain banks that it is possible to convert this play money into cash and back again to bitcoin because so many gamers out there and pedophiles(who use it to pay for videos online) and other illegal buyers out there will convert it back for them.



February 7, 2018

Haha, bots here, bots there… stolen bitcoin in some other places. Anyway, this is a nice post and i am here to tell you about an organisation that helped me with my stolen bitcoin, almost lost investment and so on> visit: rootgatehacks DOT com for more info