Every time I tell people about my work, and as much as I want to avoid answering it; people do end up asking me what’s it about. Don’t get me wrong, I like educating people about this new technology but when you get asked about it FIVE times a day then it’s a bit too much.
To make things easier, I resort to analogies. Which got me thinking of how others explain it? So I set out to look for the BEST analogies to explain what Bitcoin is.
Bitcoin is like AOL
So the first analogy I came across took us back in time. Back to the good old days of AOL; the place of fun looking cartoonish graphics. It had a huge monopoly over web-access but there was not much beyond that. It was a recognized, household name but that’s pretty much it. Similarly, Bitcoin is the gateway to cryptocurrency; having a monopoly over the industry, but it doesn’t really work that well. Bitcoin is actually very slow but since it was the first one to come out, it gained success.
Bitcoin is gold
This is the most used comparison of Bitcoin. People often refer to it as gold. But I actually came across this interesting story where the Reddit user who goes by the name of quickfluid has explained it.
So according to him, blockchain is like God, so he is all-seeing. He keeps an eye on all the gold being dug up. He plans on making everyone responsible so he gave every one a treasure chest to keep it safe. And, the only way you can remove the gold from the chest is by thinking of the 24 magic words. This was done so things in your treasure chest could be kept safe.
If you dig up a piece of gold, it goes straight to the person’s treasure chest. If you want to buy something from Joe, for e.g., with that gold then you agree with him how much you’re going to pay and think of the 24 magic words. God moves that much amount into Joe’s box. God confirms everything. He never forgets, never lies, never misses anything because he’s God.
So, God is blockchain. Bitcoin is the gold. And, your treasure chest is the wallet.
The Safe Analogy
Another, analogy to explain how bitcoins works are by making people imagine that there are safes lined up in a room somewhere. Each has a specific number to identify it. It’s made of strong, unbreakable glass so everyone can see how much each has. When you open a bitcoin account, you are given an empty safe and the key to that safe.
A playground football
So, basically how in a playground football field everyone playing knows what the score is and you can’t change it unless you have a very good reason. The blockchain and bitcoin is a similar situation.
In a playground football game; there’s no referee and yet the game is played successfully because everyone is aware of the rules. We can often set own rules and everyone abides by them. When a foul is made, the entire team decides what action to take. The ledger part is the score that the kids are keeping while the kids are the members of the blockchain. The score is the bitcoins.
The all-access room
Here’s an even easier one, so there’s a room that everyone can access. It is secured by security cameras and every footage is online forever. The room is filled with transparent piggybanks so everyone knows how much each owns. The piggybanks can’t leave the room, so in case you want to sell something, I have to walk into the room with a ski mask on, everyone can see me on the security camera but they don’t know who I am. Then I transfer the money from piggybank to another and I leave the room.
Everyone knows that the money has been transferred but from whom to whom, is unknown.
These are some of the weird yet best analogies we came across. Do you have an analogy that makes things easier for you to understand? Let us know in the comments below!