# 6 - How to Explain Cryptocurrencies and Blockchains To The Average Person

Featuring Amanda(ConsenSys) and Jamie(Bitfury) by Unchained Podcast |Capturing the uncaptured insights with Untethered.email

In this edition, I’d like to bring back an educational episode from Unchained podcast in October 2017. Many voices still think Bitcoin is a fad, a fraud, a bubble, a Ponzi scheme. This summary note will help you to understand more about these arguments, and address these misconceptions. Can you hold two opposing thoughts in your mind at the same time?


Background

In this episode, the guests rebut the common misconception about cryptocurrencies

  • Jamie Smith, the global chief communications officer for Bitcoin hardware and software firm Bitfury and CEO of the Global Blockchain Business Council.

  • Amanda Gutterman, chief marketing officer of Consensys

  • Jamie believes that a Global Wifi will be readily available in the future while Amanda explains Ethereum to others by relating it to an experience every person has had - their computer slowing down.

TL; DL (Too Long; Didn't Listen)

“There are amazing women all over this world doing incredible things with this technology; and they are not hard to find.”

“This technology is so young that if you start learning now, nobody has that big of an advantage on you. You can still be one of the first people to learn how to do this.”

“The more that you believe that this product (Bitcoin) has value, the higher the price goes”

“Each cryptocurrency and every token really think hard about the game theoretic incentives involved in mining it, trading it or securing the network.”

“What we’re going to have in the years to come is, think about - global wifi. I think almost everyone will have access to or own their own phone so, with those two components, now you have a system that allows people to move money or any asset they want peer-to-peer for almost free.”


Insights

How did Jamie Smith get into Bitcoin and what does she do in Bitfury?

  • Jamie used to work in the White House and she moved on to work in a big PR firm.

  • Her largest client in the PR firm was Western Union where she learned about bitcoin a little bit.

  • While she was on maternity leave, his friend named Brian Ford called her and told her that she should probably leave her safe job and asked her to join a Tech Startup on Bitcoin and Blockchain. She ended up telling her friend that she thinks Bitcoin is criminal money and she did not want anything to do with it.

  • She ended up doing a lot of reading about Bitcoin and when she finally understood its security and financial standpoint, she was hooked. She ended up leaving her safe job to join the startup.

How did Amanda Gutterson get into Bitcoin and what does she do in Concensys?

  • Amanda started out in the media and marketing world and she used to work for The Huffington Post, specifically on their blog platform.

  • She ended up leaving Huffington Post and eventually started out her own company call Slant where they would allow journalists to publish any type of content.

  • They will then optimize the content and drive traffic to it while serving advertisements at the same time. The journalist will then be given a percentage of the ad revenue.

  • Since they are getting a lot of micro payments from this business model, she then realized that Bitcoin could be the solution in handling the processing fees.

How does Jamie and Amanda came to understand the technology despite their non-technical backgrounds?

  • Amanda’s interest of the technology started at the software side, she was very interested on the applications of Ethereum and what these applications can do for the media industry.

  • Jamie actually find the resources available quite useless. She believes that talking about cryptocurrency to other people is what helped her the most in understanding it.

  • Nathaniel Popper’s Digital Gold is a great resource to learn about cryptocurrency.

How do they begin to explain Cryptocurrency to people

  • Amanda explained a few properties that makes up a currency in general:

    • Scarcity - the actual number of the object being used as a currency

    • Fungibility - the ability to exchange them

    • Divisibility - the ability to divide them into smaller parts

    • Durability - the ability to survive time and other conditions

    • Transferability - the ability to move them between owners

  • Jamie says what’s happening in the cryptocurrency currently is a journey and there may be ups and downs and made a comparison with Bitcoin’s chart to prove her point.

  • Bitcoin’s chart my have a lot of ups and downs but its value still continues to rise over the years. She said it’s not just beliefs because in these tokens are where people are putting their actual information and information is always worth a lot of money.

  • Coming from the software side of the space, Amanda believes that as things shake out, giving people the technology that they could use and that they like is what will drive to the expansion of the cryptocurrency ecosystem.

  • Jamie believes that its value lies in the security, usability, and the clear desire in the market for the systems to work better.

Explain the security to people

  • Jamie said every 10 minutes or so, all the transactions done in the Bitcoin blockchain is put in a block.

  • Every 10 minutes, it’s getting more and more secure. Simply put, it’s been almost 10 years since Bitcoin has been around and no one was able to hack into it yet.

  • While she mentioned that she can’t promise it’s never going to get hacked, she believes that is so much more secure than what we have today.

What makes it secure

  • The information is stored in a central server in a decentralized work of nodes where hackers could try and tamper a huge proportion of nodes but still not be able to disrupt the function of the main network which is a much more secure way of storing the data compared to a firewall.

  • It’s like taking a huge chunk of data and breaking it into a lot of smaller pieces so that it gets so much harder to break into all those pieces of data.

  • Even if you try to break into one piece of small data, you’d have to do it in such a coordinated way and it is so much cost prohibitive.

  • Even if you break into one small piece of data, you can’t break into all of them which makes breaking in it kind of useless. You can’t just break into one house - you have to break into an entire town,” to hack a blockchain.

How do they explain mining to other people

  • Jamie doesn’t really use the word “mining” in the conversations, she calls it “securing the blockchain” or ‘“transaction processing”. It is actually a way of processing and securing one’s transactions.

How do you react when people think that cryptocurrency is criminal money

  • There are criminals using cryptocurrencies but there are more criminals using the normal currency.

  • However, it is relevant that the government uses the blockchain technology to provide higher quality of services to people and it is also helping the people track all of the transactions globally.

  • In a way, it actually makes it easier to determine criminal behavior within these transactions.

  • There are actually crimes that are solved using blockchain technology.

How do you convince people that these are not Ponzi schemes

  • A digital currency by definition is not a Ponzi scheme.

  • It is actually a digital token that has a value and just like any other currencies, there will be people who will try to take that currency and do a whole bunch things with it, either good or bad.

  • We don’t live in a perfect world, we live in a digital world and it’s up to us to harness that technology correctly.

How do you describe the future of the blockchain technology to a regular person

  • Jamie believes that we will soon have a global wifi and everyone will own an inexpensive phone one way or another.

  • A huge desire for this technology. She would also always tell regular people that there’s a new tool, which is the greatest she’s ever seen since the creation of the internet that will allow you to do what you need to do.

  • Amanda also believes that it will be very beneficial to people who doesn’t have access to government provided identity which makes it hard for them to open a bank account.

  • The reason being is it’s very hard to include yourself in any way in a global economy if you don’t have a bank account.

Whether or not cryptocurrency is in a bubble

  • Every person who’s compared the internet revolution with the blockchain wave has said the current phase of development is similar to 1992-1993 in the internet.

  • So, in terms of the value that will be created, it’s actually very early and quite small compared to what will come later.

  • In fact, she had recently been listening to an interview with Jeff Bezos from the mid-1990s, and was thinking about what a long road he’s had from 1995 to 2017, but realized the same applied to blockchain technology

“When you have a vision and there’s a real desire in society for systems to change and become more efficient and you have a product that undoubtedly offers that, I don’t think you can stop that force.”

  • “The same way people in the early days of the internet thought consumers will never use this, there will never be commerce on this platform, it’s too complicated for normal end users — boy, were those people wrong,” she says. “Once the salability and security issues were solved, eventually all those things happened.”

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