How to Explain Cryptocurrency to Seniors?
Many of us will have to describe the internal workings of modern technology to an ageing aunt, grandmother, or retiring father. And although NFC, Wi-Fi, and social networking sites are already primarily known, the current discussion is about cryptocurrency and blockchain technology.
According to Albert Einstein, the essence of brilliance is taking the complicated and rendering it simple. This piece will assist you in educating seniors about the high-tech arena of digital currency without assuming genius status.
Seniors are Curious
The senior may not always be uninterested in knowing about cryptocurrency, despite what would seem to be the situation. According to the NCBI Database, seniors are ready to learn about new technologies. This is true despite several claimed barriers, such as a lack of understanding, which is thought to be complicated. The seniors will have a foundation from which to study and decide if they want to enter the wild new universe of blockchain and cryptocurrencies if introductory explanations are kept simple.
Get Rid of the Technical Terminology
The first step in describing cryptocurrency is getting rid of all scientific jargon, which is unnecessary and might be misleading.
For example, blockchain itself is only a distributed system or ledger. However, perhaps that may be made simpler. Skella advises referring to it as a classic record book, and each block only serves as a line item for the record sheet.
Innovation is only as sophisticated as marketers (and fraudsters) want this to appear. It’s possible to boil things down to a less complex version seeing as everything was made by humans, people who were no brighter than you or me. In reality, millions of duplicates of these records are scattered across the globe’s computer systems, indicating that a single entity is not managing it.
For Clarification, Use Cases
Imagine your mother wants you to explain how everything works when you meet her. She is instructed to envision transferring money to her brother and would have to add a new part of the budget to the logbook to accomplish that. Hundreds of many other computers can view and save this financial statement, confirming that the operation is authorised and valid.
The entries are irreversible in the record sheet, making them accessible to anybody with a copy on their computers. If the money is transferred to your mom, a different line item would need to be authorised and legitimised in the same manner as previously.
Although there is a lot of discussion about currencies, people must understand that there seem to be no actual coins. Additionally, the value of this virtual currency is decided by its users.
The value of fiat money, utilised by national governments, is produced and guaranteed by that nation’s finance ministry. People concur that cryptocurrency is valuable.
The original Superman comics booklet cost 20 cents, which may sound a bit strange, but after a while, enthusiasts bought it for $32 million. It is priceless since it is rare and in high demand, and a cryptocurrency’s value also rises similarly as demand rises. Additional elements that reinforce its worth include the following:
- Cryptocurrencies resist forging and imitation and can be shifted back without justification or permission.
- Rapid transactions are made feasible by cryptocurrencies.
- Users can stay anonymous and provide the information they want to the vendor or recipient.
- It is accessible to anyone without a valid identity or traditional bank accounts.
- Users maintain control, unlike term deposits, which might limit your credit.
What is Mining?
According to IT expert Roger Ulanoff, this is a complex topic describing where these virtual currencies originate and how to find them.
At this moment, Ulanoff suggests making a comparison to a mountaintop. There have been miners at a location named Mount Bitcoin. However, computers are used by miners in place of physical mining machinery. These Bitcoin miners seek to create a coin that can be broken down into smaller chunks and traded for the desired cash in return for their machines’ processing power.
According to Moshe Weiss and Sarah Simmons of The Wall Street Journal, the miner is “allowing technology to address mathematical equation.” But like the Discovery of gold in 1849, mining Bitcoins becomes more difficult as the number of miners increases.
What Value is & How Does it Work?
The usefulness of cryptocurrencies is one crucial aspect that affects their price, according to Dan Weinberg of the private investment company Incentives. The greater the use and value of cryptocurrency, the more broadly it is embraced.
Price is also influenced by producers and consumers, with shortage increasing its worth. There can always be a certain quantity of coins made; therefore, this is intentional. For example, there are 21 million units in Bitcoin, which may be mined using special software or purchased on cryptocurrency exchanges using conventional fiat currencies.
Peer-to-peer digital currencies are independent of centralised banking firms and reliable third parties, although most seniors are accustomed to these concepts. Software is used to run and manage the exchange.
Thus, the program links the sellers and buyers instead of connecting a purchase order with a selling order. The middleman is eliminated, and charges that follow too.
Machines are More Reliable than People
This mechanism becomes significantly more reliable thanks to computer-based authorisation.
Even though humans haven’t figured out how to believe each other, computers can be made to consider other computers or groups of computers, according to risks and technological expert Joe Ippolito at Hackernoon.
He refers to this period as “the birth of the commercial web.” People aren’t only spending money on the web now; that has already occurred. When this modern internet version becomes widely used, it will “fundamentally alter all we understand well about present networks” because “the wealth is embedded right for this next generation of the web.”
What Dangers Exist?
Any potential investor must be made aware of the hazards associated with cryptocurrency. According to Ippolito, when one is not cautious over who they use to get on it, this new type of gold produced on the web might very well be subject to hacks and criminals. “The web is still a totalitarian country, the Wild Wild West.
Using reputable crypto platforms like Coinbase and well-known cryptocurrencies like Ethereum (ETH) and Bitcoin (BTC) is brilliant because it still takes effort to keep new investors secure. The worth of cryptocurrencies has been devalued by fraud. However, Ippolito claims this is a declining trend and contends that the currencies have strengthened and rebounded.
Andrew Parsons, the Eastern Seaboard Director at Techdirt, notices something. He claims that while blockchain technology is now sufficiently developed to be used by large and small fintech companies, it is still not “recognised enough to have been a real store of relative value.” Although cryptocurrencies are becoming more popular, many people are unaware of how they operate. According to Parsons, this situation is dissimilar to “the NASDAQ with inexperienced traders taking gut-based decisions on sophisticated firms.”
According to him, this strategy is flawed because “with cryptocurrency, the innovation is married to the pricing and misinterpreting the reports coming out of platforms like Coinbase may lead anybody into a multitude of difficulties.” Parsons offers the following quick checklists for you and your home to use: The way individuals transfer payments from one computer to another computer will be replaced by cryptocurrencies. It’s not forbidden, and when it’s not interesting, complicated, or enjoyable, it’s time to throw it out.
What about Crypto as a Retirement Asset?
Vanguard Holdings, the biggest supplier of 401k plans in the US, recently decided to include bitcoins as an instrument in 401k plans due to the demands from retirement account administrators. The program will initially be available for staff members of business management for Software firm Microstrategy before being made available to more people. Employee accessibility to the cryptocurrency option will require corporate approval.
In January, the Chartered Financial Planners Council of Standard received a 60-page document from Onramp Investments, a portal for financial advisors who wish to assist customers with investing in cryptocurrencies. The business argued that it could violate the fiduciary responsibility of money managers to withhold information on digital cryptocurrencies, given the prevalence of crypto assets.
Retirement investment managers don’t always appeal to seniors; instead, they target youthful, working adults. However, studies indicate that Generation Z and Millennials are not the only groups using their retirement funds to gamble on cryptocurrency.
Whether cryptocurrency is controlled in the future will determine when or if this tendency persists. If large shareholders see cryptocurrency losses or if the prognosis for the economy gets better, they may get discouraged.
Similar Risks Apply to Stocks
According to Stacey Rapacon, a financial journalist for the financial guidance website Build with Acorns, investment in cryptocurrency carries the same risk of loss as stock investments. Even though it simply presents one side of the story, we disagree with this idea. When compared to stocks, Bitcoin and other cryptocurrencies like Ethereum, Solana, and others have weaker fundamentals.
Cryptocurrencies don’t have a genuine market value since you can’t just go to a computer and read some websites that tell you how much it’s worth. However, with equity stocks, you can perform a fundamental examination of a firm to establish the stock’s value. It’s not surprising that a particular cryptocurrency might hit a million dollars before losing all of its value the next day. Assumptions and market volatility are vital factors.
According to Peter Vans-Colina at Twitter, those who describe cryptocurrency as a boom are not mistaken. However, inevitable bubbles, such as the Social Security program, do not burst. The amount you contribute to the government’s treasuries isn’t held until your retirement; instead, it’s spent immediately to cover the costs of existing seniors’ healthcare and pension.
Bitcoin is instant, and nothing “basic” can stop it from expanding. According to Vans-Colina, Bitcoin was worth $160 billion in October last year, making it “quite valuable as a form of keeping and distributing value.”
Even while cryptocurrencies are growing in popularity, there is still a mystery. Most notably, the senior generation, who might not be as tech-savvy, people are sceptical about it. Simple explanations of cryptocurrency aid in understanding the possibilities it presents to all of us.
Which four cryptocurrencies categories are there?
Utility, payment, security, and stablecoins are the four main categories. Defi tokens, NFTs, and asset-backed tokens are different token types. The most widely used cryptocurrencies are payment and utility tokens.
For novices, what is cryptocurrency?
Cryptocurrency may be defined as a type of digital asset. Because every one of its transactions is securely encrypted, the moniker derives from how safe the trades are. Contrary to traditional currencies, which are administered and governed by a central body, it is decentralised.
Are Bitcoin and cryptocurrency the same thing?
The most well-known cryptocurrency, for which blockchain technology was created, goes by the name of Bitcoin. Similar to the US dollar, a cryptocurrency is a means of exchange. However, cryptocurrencies are digital, and they utilise encryption to manage the generation of new units of money and to confirm the movement of cash.
Can you exchange cryptocurrencies for cash?
Two basic options exist to turn bitcoin into cash and transfer it to a bank account. The first option is to employ an outside exchange broker, and your bitcoins will be converted into cash at a predetermined rate by these third parties.
Bitcoin: Is it money?
People utilise cryptocurrencies as investments and for online transactions. You must exchange actual money, such as dollars, to purchase “coins” or “tokens” of a specific type of cryptocurrency. Together with a dependable financial expert, create a more effective financial strategy.
Are bitcoins forbidden?
Even if most nations do not forbid the use of Bitcoin, its position as a payment method or a commodity varies with various legislative repercussions. The usage of Bitcoin is restricted in several nations, and banks have started forbidding consumer bitcoin transactions.
How can a novice get bitcoins?
Aspiring Bitcoin investors require several items, including a cryptocurrency exchange account, personal identity papers if they plan to use a Know Your Customer (KYC) platform, a secure Internet connection, and a payment mechanism.
Bitcoin vs cryptocurrency: which is better?
Although it is less versatile, Bitcoin concentrates on decreasing influencer costs and speeding up transactions. Cryptocurrencies aim to allow for the safe and secure exchange of goods and serv with little to no intervention from the government or mediators, and Bitcoin values its anonymity