Zoom out: Making cryptocurrency less abstract
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If cryptocurrency makes no sense to you, think about it like different ways of sharing photos.
- You take a picture on your mobile of your kid eating a doughnut. It's a cute photo, right? You send it to your family group text, and now 20 people have that photo.
- But you don't actually send the group text the photo. You make copies, for each recipient. After all, your photo is still right there in your phone.
Between the lines: Before Bitcoin, the internet could be understood as a giant Xerox machine. It didn't send anything to anyone — it made copies on their devices — to infinity.
- Here in the physical world, though, one thing stays one thing. If you send it, you hand it over.
- Case in point: If I send a postcard to you in the mail (a picture!) that actual picture goes from me to you. You have it, and I don't.
The big picture: Bitcoin brought "sending-but-not-copying" to the internet.
- Copying is fine for most things. Like, for instance, sending photos of your kid eating a doughnut. (Sure that has value too, but why wouldn't you want to share it with other people? The kid is cute!)
- But sometimes you want to transact. And transactions are zero-sum. I give, and you take. I have less. You have more. That's how a transaction works.
Zoom in: Bitcoin was the first computer system that created a way to send a thing — a digital thing, not unlike a picture — to someone else such that I have it and you don't — without someone in the middle who can meddle.
- Fun fact: Crypto also created a way to send that photo of your kid to someone else that way — they're called NFTs.
The bottom line: You can think of blockchains as a system of global pneumatic tubes for pictures of your cute kid eating a doughnut.
- With Bitcoin, it's not pictures: It's money. With Ethereum and other chains, it could be a lot of other things too.
That's what I wish I would have said last weekend. I hope the caller subscribed to our newsletter and is reading this now.
- A digital asset is inherently abstract, and the only way to really understand it is to use it. But better explanations don't hurt.
