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With recent Bitcoin (BTC) price movements attracting new attention to the blockchain industry, cryptocurrency-centric conversations have once again begun to see a rise. Google Trends data shows that searches for the term “Bitcoin” rose to an annual high after the asset rallied above $ 19,000.
Given the current circumstances, the discussion centered on Bitcoin, general questions about blockchain and cryptocurrencies could arise at the Thanksgiving table. However, while the crypto community has a lot to be thankful for this year, newcomers and crypto curious may want to learn more about space beyond Bitcoin’s price. With this in mind, leading experts shared some ways to explain some Bitcoin and blockchain-related topics to friends and family over the holidays.
Explain Bitcoin as a currency
If you’ve ever ventured down the crypto rabbit hole, there’s a good chance your friends and family are asking you about Bitcoin and its function as a currency.
Tim Draper – the famous venture capitalist and legendary Bitcoin investor – told Cointelegraph that it is best to let crypto newcomers know that Bitcoin is a reliable currency that is not under government control. “Bitcoin is not subject to the whims of a government that will freely flood the market with 13 trillion of them, diluting yours,” he said.
Draper further said that Bitcoin-accepting retailers don’t have to pay between 2% and 4% every time a debit card is swiped. Lower transaction fees are in fact one of the main benefits for retailers who accept cryptocurrency. According to findings from research firm Forrester and BitPay – a Bitcoin payment service provider – retailers who accept cryptocurrencies via BitPay only pay a 1% commission on purchases. The report states: “The composite merchant avoids 2.25% transaction fees (based primarily on US rates) for each transaction completed using BitPay.”
Additionally, Draper mentioned how important it is for Bitcoin to be borderless:
“Bitcoin can travel without restrictions from one country to another. It is also easier to send money quickly from anywhere in the world with Bitcoin. And with Bitcoin wallets and smart contracts, all the right people will get the right amount for their participation in a Hollywood movie, for example, even if the payments are worth fractions of a dime. “
The borderless nature of Bitcoin is extremely important, especially in countries suffering from high inflation rates and economic turmoil. For example, in countries like Argentina, the demand for Bitcoin is on the rise as foreign debt builds up.
Explaining why the price of Bitcoin is rising
While Bitcoin and other cryptocurrencies are volatile by nature, many tend to think that the market prices of cryptocurrencies are based solely on supply and demand. However, this is only part of the equation.
Bill Barhydt, CEO of Abra – a peer-to-peer payments platform that supports over 70 cryptocurrencies – told Cointelegraph that the price of Bitcoin is currently on the rise as supply is outpaced by demand. However, Barhydt noted that Bitcoin’s price is also affected by institutional interest:
“From an institutional point of view we have the grayscale that is absorbing huge amounts of capital. Not to mention the major hedge fund players announcing exposure to Bitcoin in their portfolios. This is something I said would happen this year. “
Barhydt also noted that retail interest is growing and therefore the price of Bitcoin is rising. For example, one of the biggest wins for crypto this year was the announcement of PayPal’s support for the technology. “The bottom line is that this combination of retail and institutional purchases is consuming Bitcoin supply at an accelerating rate,” Barhydt said.
Explain the difference between blockchain and cryptocurrency
There is often confusion regarding the differences between blockchain and cryptocurrencies when discussing the topic with newcomers.
Alistair Rennie, general manager of IBM Blockchain, told Cointelegraph that the main difference between blockchain and cryptocurrency is that blockchain is a technology behind cryptocurrency, while cryptocurrency is a monetary asset.
Rennie further said that blockchain as a technology allows for establishing and maintaining trust between different parties. According to Rennie, this is possible thanks to the blockchain’s unique abilities to independently verify data for everyone involved in a transaction. As such, this makes blockchain useful for solving business problems outside the realm of cryptocurrencies. Rennie explained:
“Blockchain acts as an immutable registration system to store information such as a user’s account balance. Unlike traditional databases, however, multiple (encrypted) copies of the database are shared among users so that any changes are immediately apparent. This makes it incredibly difficult for someone with malicious intent to tamper with the data. ”
Due to the unique capabilities of the blockchain, Rennie noted that all users can look to the blockchain as a single source of truth. Furthermore, he pointed out that blockchains never rely on third parties to mediate transactions, giving users more control over their data and who is allowed to see it. “Blockchain has numerous uses besides cryptocurrency, where trust and data accuracy are important,” he noted.
Regarding cryptocurrency, Abra’s Barhydt told Cointelegraph that cryptocurrencies are best explained as the idea of decentralized software-based systems for storing and moving value between people or entities. “Decentralized means that no one owns it, no centralized or trusted third party is required in the middle of any transaction, and there is no shutdown switch except the internet itself,” he said.
In the case of Bitcoin and its blockchain network, Barhydt noted that the blockchain helps address the double-spending problem by ensuring that people cannot spend or send the same Bitcoin more than once. “A blockchain represents an immutable database of transactions in the history of a cyrpotcurrency,” he explained.
Crypto is slowly but surely gaining ground
One key thing worth mentioning during Thanksgiving is that cryptocurrency appears to be headed for mainstream adoption. Recent statistics show that over 55 million cryptocurrencies have been created. Millions of dollars were also reported to have been spent using cryptographic debit cards.
Additionally, PayPal’s recent support for cryptocurrency could help bring digital currencies to the masses. PayPal CEO Dan Schulman said during an interview with CNBC that cryptocurrencies will eventually go mainstream as businesses and consumers flock to digital payments and digital forms of currency. Schulman also pointed out that the COVID19 pandemic has led to a drop in cash payments, noting that “40 to 70 percent of consumers no longer want to handle cash.”
