How to Explain Bitcoin to Your Family This Thanksgiving (Again)

The turkey is freshly sliced from the oven, the dining room table is bursting at the seams with platters of buttery mashed potatoes, rich gravy, gooey mac and cheese, and roasted vegetables, all surrounded by the hum of lively conversation. The air is rich with the scent of pumpkin and roasted apples, a fragrant promise of the desserts to follow. You pick up your fork, ready to savor your first perfect bite, when Aunt Linda, from across the table, cuts through the chatter and blurts out the B-word… “Bitcoin.

“Hey [insert your name], you must be so excited with all this Bitcoin stuff happening! Isn’t it at, like, [insert the wrong price] right now?”

Before responding, you take a moment to silently kick yourself, regretting not “aping” (an industry term for throwing every dollar you could muster) into Bitcoin during the last crash. By the time you complete this brief episode another family member jumps in. “Oh yeah, I bought some Ethereum a few years back,” they say proudly, only to follow it up with, “but it dropped $100, so I sold it immediately!”

It was 2017. Then 2021. Then 2023. Each bull market, like clockwork.

And you, the family’s self-proclaimed crypto enthusiast, have once again been dubbed the go-to authority on all things Bitcoin, Ethereum, blockchain, cryptography, and every obscure mathematical riddle and economic paradox that comes with it. Subsequently, all functional questions seeking to justify Bitcoin’s price and its utility to society now fall squarely on your shoulders. It’s Thanksgiving. You’re hungry, off work, perhaps even slightly inebriated, and entirely caught off guard. To save you, I’ve created a lifeline — a curated cheat sheet of top Bitcoin-boomer questions and their answers, ready to help you navigate your family’s periodic, holiday-induced curiosity about cryptocurrency.

Question:

“Well, I just don’t even know what it is!”

Answer:

It’s digital money — a way to transfer value directly from one person to another without needing a centralized middleman. Think of it like PayPal, but with a key difference. When you send money through PayPal, you’re not sending it directly to the recipient. Instead, PayPal acts as the intermediary, taking your money, verifying your identity, ensuring the transaction is valid, and then passing it along to the recipient. They also check that the total payments sent match the total payments received. Bitcoin does all of this without the need for a company like PayPal in the middle.

Optional Technical Answer:

Bitcoin achieves this through decentralization and a technology called blockchain. Transactions are recorded on a public ledger distributed across the globe. Thousands of computers (called nodes) work simultaneously to verify that transactions are legitimate and bundle them into chunks called blocks.

When a block is verified correctly, and the rest of the network agrees, it’s added to the chain of previous blocks — hence the name “blockchain.” As a reward for their work, the computer that successfully proves the block earns newly created Bitcoin. This process is also how new Bitcoin is introduced into circulation.

At the time of writing, there are approximately 19.9 million Bitcoins in circulation, with a fixed total supply of 21 million. The network ensures this cap is never exceeded by reducing the block reward over time. Every four years, the reward is cut in half in an event known as “halving,” causing the creation of new Bitcoin to slow exponentially.

Double Question:

Where does the money go? Is it untraceable?

Answer:

Ironically, most Bitcoin purchases are made through centralized exchanges (CEXs). By now, your family has probably heard of Coinbase, but these days, you can also buy crypto through apps like PayPal, Cash App, Venmo, or even Robinhood. The irony? You’re using a centralized mechanism to exchange Bitcoin, the supposed beacon of decentralization, for U.S. dollars. However, CEXs, particularly in the U.S., come with certain advantages that make them the easiest on-ramp for new users. They comply with customer identity laws (like KYC, or “Know Your Customer” regulations), which are designed to prevent fraud and other illicit activities. These platforms also offer purchase protections and user-friendly interfaces, making it safer and simpler for the average person to buy their first cryptocurrency. While this might feel at odds with Bitcoin’s ethos, it’s often the most accessible starting point for mainstream adoption.

There’s also a technology called decentralized exchanges (DEXs), which allow you to swap cryptocurrencies directly without intermediaries. The price of a cryptocurrency, whether through centralized or decentralized platforms, is determined by how much of another currency people are willing to trade for one unit of it. Cryptocurrencies can also be valued against each other — like the ETH-to-Bitcoin price ratio. These ratios can reveal market sentiment and the relative perceived value of assets at any given time.

As for the claim that Bitcoin is “untraceable”? It’s actually the opposite, at least when it comes to Bitcoin and most blockchain protocols. Every transaction is recorded on a globally distributed ledger that anyone can access. To receive Bitcoin, you need to share your wallet address. Once someone has it, they can analyze the blockchain and see all transactions associated with that address. However, Bitcoin wallets are lightweight and easy to create, so you can obfuscate your activity by using multiple wallets — unless you’re connected to a centralized exchange that requires identity verification. Some blockchain technologies have been developed to address this traceability. For example, Tornado Cash, built on the Ethereum network, acts as a “tumbler,” mixing transactions to completely separate the source of funds from their recipient. Tornado Cash was banned in the U.S. in 2022.

Question:

Why do people care about it so much?

Answer:

This one’s tough because there are as many answers as there are people into cryptocurrency. But at their core, all reasons stem from one fundamental idea: freedom. Cryptocurrencies are unique in how they achieve freedom — through trustless cooperation and perfect information.

Bitcoin’s design, known as proof of work, is a prime example. It requires immense resource expenditure to verify transactions but very little effort to verify someone else’s proof. When you successfully verify a block, you broadcast the proof to the network, where it’s checked by every other node. For a block to be added to the blockchain, over 50% of the network’s validators must reach consensus. This means an attacker would need to outpace and double the computing power of the entire Bitcoin network — while also keeping up with its growth — just to maliciously approve fake transactions.

The result? It’s incredibly hard to approve a block and virtually impossible to approve a fake one. Meanwhile, disproving a fake block is easy because the network relies on provable information that’s instantly shared. This system makes Bitcoin decentralized and trustless. Two nodes can cooperate seamlessly without ever knowing or trusting each other, relying solely on the mechanisms of the network. Together, they’re part of a harmonious system that collectively converges on truth.

While this might sound abstract, it’s incredibly powerful. It’s not just about transferring money; it’s a foundational technology. The principles behind Bitcoin have been extrapolated for applications far beyond currency, the most popular being smart contracts. These use blockchain as an execution layer for code, enabling decentralized apps to run on networks like Ethereum.

Ethereum and other successors to Bitcoin — known as altcoins — build on this technology, adding features like smart contracts that Bitcoin doesn’t natively support. But at its heart, the promise of cryptocurrency remains the same: a system designed to empower individuals with freedom, trustless collaboration, and a collective pursuit of truth.

Question:

Who made it?

Answer:
The true identity of Bitcoin’s creator remains a mystery, but they went by the pseudonym Satoshi Nakamoto. Satoshi was part of a broader movement known as the cypherpunks — a group of cryptography enthusiasts, technologists, and hackers dedicated to using technology to protect individual privacy and freedom in the digital age. The cypherpunk ethos heavily influenced Bitcoin’s design, as they believed cryptography could help build trustless systems resistant to surveillance and control.

Bitcoin wasn’t created in a vacuum. Several earlier projects attempted to build digital money, including DigiCash, b-money, and Bit Gold. These projects laid the groundwork for Bitcoin by exploring concepts like cryptographic security, decentralized ledgers, and peer-to-peer networks. However, they either failed to gain traction, were shut down, or were abandoned.

Satoshi Nakamoto released the Bitcoin whitepaper in 2008, titled Bitcoin: A Peer-to-Peer Electronic Cash System, and launched the network in 2009. Despite their monumental contribution, Satoshi disappeared from the public eye in 2010, leaving control of Bitcoin’s development to the community.

Over the years, several individuals have claimed to be Satoshi, but none have provided verifiable evidence. Famously, Craig Wright, an Australian computer scientist, has repeatedly asserted that he is Satoshi. His claims have been widely discredited, and he even lost a significant court case where he failed to substantiate his identity as Bitcoin’s creator.

To this day, Satoshi Nakamoto’s identity remains one of the greatest mysteries in technology, adding to the mythology surrounding Bitcoin.

Double Question:

Why is it so volatile? Should I buy it? (not financial advice)

Answer:

In markets, volatility usually signals uncertainty, and Bitcoin is no exception. The stratification of perspectives on cryptocurrency is fascinating — there aren’t many “mehs.” Instead, the landscape is dominated by strongly opinionated groups: the “orange-pilled” Bitcoin maximalists, or “HODLers” (a now-iconic misspelling of “hold” that became a rallying cry), and, on the other side, the skeptical “trad-fi” intelligent investors value more traditional financial valuation models and tangible assets. Most people who fall somewhere in the middle? They’re probably just not paying attention.

One of the reasons cryptocurrency prices are so volatile is their lack of tangibility. If you buy shares in, say, a paint store, some of its value is rooted in physical assets — its land, property, equipment, and inventory (the paint!). Even if the business collapses or the building catches fire, you can recover some value through those assets. This creates a natural floor for the company’s valuation.

Cryptocurrency, on the other hand, doesn’t have that safety net. If a cryptocurrency fails, the value doesn’t just drop — it disappears entirely. You’re not entitled to the servers, GPUs, or even the electricity used to validate the network. It’s truly digital, which means the risk of losing everything is higher.

The final — and perhaps most intriguing — factor behind Bitcoin’s volatility is its lack of a central figurehead. There’s no CEO of Bitcoin you can call up to file a complaint, no corporate office to refund your investment, and certainly no one to get your nephew an internship. Bitcoin is decentralized by design. Its development is open source, its network validators are distributed globally, and consensus is achieved through collective agreement — not corporate decree.

This makes Bitcoin a kind of uncontrollable enigma — a self-propelling, deeply harmonious network that thrives on collective human activity. In a way, investing in Bitcoin means pledging your money to something that cannot be controlled. It’s not just a financial decision — it is philosophical. The network decides for itself. It represents collective freedom: you are free to join, and you are free to leave.

Should you invest? I don’t know — should you?

So, this Thanksgiving, when the Bitcoin questions inevitably roll in, you’ll be ready to educate, entertain, or just deflect with style.

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