How to Talk to Your Family About Crypto
It’s that time of the year again, you’re visiting home and those familiar topics come up again – work, family, investments.
Have your older relatives ever given you a look when you bring up crypto? A look that reminds you of their skepticism, the fact that they don’t trust it, and doubt its potential to revolutionize finance across the globe? If so, you’re in the right place.
Below, we have compiled a list of FAQs that tend to crop up among those new to the subject of crypto, and we have some solid advice as to how you can demystify the world of crypto to make your family dinners less awkward next time the word “Bitcoin” comes up.
“It’s all a fraud”
The FTX fiasco has tainted crypto in the eyes of many. However, this is just an example of a centralized exchange misusing its customers’ funds the same way as banks have done time and time again.
But those who hold their Bitcoin themselves, as anyone who is serious about crypto has always strongly recommended, haven’t lost a single penny.
Bitcoin, in fact, gives people the ability to escape the clutches of banks and entities that misuse their assets, and take control of their finances completely into their own hands for the first time in history.
“It isn’t really money”
Bitcoin might not be money in the sense that you are used to, but Bitcoin has substantial value as an asset.
Firstly, Bitcoin can be used to pay for goods and services at an ever-growing array of outlets.
Secondly, much like assets such as gold or stocks, just because it isn’t a fiat currency, doesn’t mean that it doesn’t have material value.
Bitcoin’s value comes from three key areas:
- It’s secure – once you have Bitcoin and you store it safely, no one can ever take it away from you.
- It’s scarce – there will only ever be 21 million Bitcoin.
- It is trustless – it has an incredible capacity for executing cross-border transactions in a seamless and cost-effective manner without needing anyone’s permission (unlike how traditional banks and money-changers operate, for example).
Bitcoin, like Gold, is widely accepted and appreciated for its characteristics.
Next time your parents suggest Bitcoin isn’t money, ask them if they’d rather try to spend a pocket full of gold, or a pocket full of Bitcoin.
“It’s not even real”
While crypto may not feel the same as tangible notes of money, it is just as real and it’s used to execute roughly 400,000 transactions a day. Cryptocurrencies are simply ways to transfer value without needing the permission of gatekeepers like banks or businesses.
When you type out an essay on Google Docs, there’s no doubt it exists any less than when you write it on paper – and the same applies to crypto.
The beauty of bitcoin is its database is entirely public, to look at the backend, all you need to do is take a look at the blockchain, which is 100% publicly available and easy to view.
“What is blockchain anyway?”
A blockchain is simply a digital ledger that records transactions in a decentralized way, without relying on any central authority.
The way that blockchain functions is what makes it revolutionary and unique. No central authority can intervene or corrupt its technology.
Instead, Bitcoin is enabled by the work of thousands of independent miners across the globe, who are paid for executing transactions.
“It isn’t eco-friendly”
Crypto is in fact a key driving force propelling the shift towards green energy. Bitcoin miners are incentivized towards the cheapest forms of energy, and these are typically renewable energy.
Bitcoin is often compared to things like VISA or Mastercard, but that’s an unfair comparison, as VISA or Mastercard can block your transactions at the press of a button, whereas no one can ever stop you from spending your Bitcoin.
Bitcoin is actually a hell of a lot greener than other assets that can be transferred without a central authority, such as gold, which is far more environmentally destructive to mine.
Furthermore, the world’s second-largest crypto – Ethereum, has recently gone green, reducing its energy consumption by over 99%!
“Governments can ban it”
Most states permit the use of crypto and recognize the benefits of crypto as an asset class, even investing in it themselves – about 8% of all the Bitcoin in the world is owned by governments.
Even though some states such as China have tried to ban it, as awareness increases, more and more states and institutions are investing in crypto and crypto solutions.
In any case, the fact that crypto is virtually impossible to ban in practice is just one reason it has so much value.
“It’s used for illicit activities”
Crypto is in fact mainly used by regular people.
In the criminal world, cash is still king. Crypto’s inherent traceability in fact makes it far from ideal for the average criminal.
“It’s got too expensive”
While Bitcoin has grown massively in value over the last decade, some still don’t realize that you can acquire crypto for cents.
Crypto is almost infinitely divisible and can be bought in minute fractions. Here at Xcoins, you can buy Bitcoin for as little as $50!
“You could lose it forever”
It is true that Bitcoin is often lost forever, however, with proper precautions this is easily preventable.
All that is needed to store crypto safely is to record a few simple words and store them in as safe place – or ideally in multiple safe places.
In fact, there has never been an easier way to safely store large values of capital in human history!
Managing expectations
While crypto is still relatively new as an asset class, it’s only natural that people who are unfamiliar with it will be reluctant to take a risk with it. And that’s perfectly normal. It’s undeniable that there are risks involved – but with great risks can come great rewards.
Don’t be disheartened if they don’t come on board. The best you can do is to just sit them down and explain the facts. If they aren’t the next crypto converts then so be it. Just try not to be too smug when the time comes around to show off your gains!
As always, this article does not constitute financial advice and you should be sure to do your own research and consult a professional financial advisor before making a major investment decision.
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