Don’t be fooled by geeks, Bitcoin is not that complicated

Some claim that Bitcoin is the new age of currency and the “end of money as we know it.” Bitcoin is decentralized and built for seamless transactions over the Internet — provided you know what Bitcoin is and are ready to use it.

The problem is that Bitcoin is still shrouded in mystery to the general public. In a recent consumer survey conducted by PricewaterhouseCoopers, only 6% of people said they were familiar or very familiar with the currency, while 83% of respondents said they had little to no knowledge of Bitcoin.

In contrast, people searched a lot for the term "Bitcoin". Taking Google Trends as an example, data showed that people searched more for Bitcoin than for the other two payment systems: Apple Pay and Google Wallet.

The attention paid to Bitcoin is inseparable from the media hype, as well as events such as online drug trafficking and the theft of hundreds of millions of dollars from hackers at the well-known Bitcoin trading platform Mt GOX .

So, what exactly is Bitcoin?

First and foremost, Bitcoin is a currency, just like any other currency. Bitcoin can be exchanged for almost any other currency an unlimited number of times. Currently, 1 Bitcoin is equivalent to $ 230 .

Once you have purchased Bitcoin, you can then purchase goods with Bitcoin at the exchange rate in each foreign exchange market. In other words, it is the same as buying something priced in US dollars online with Australian dollars or euros.

Buying things with Bitcoin is similar to shopping with online banking. The merchant needs an account, and after the payment is completed, the merchant confirms the payment, and then everything else is processed as a foreign currency payment.

If it’s so simple, why don’t people understand it?

The biggest problem with Bitcoin from the beginning is that it was born out of computer science. Many of its properties are based on the complexity of the technology that created it, and therefore are of interest only to experts.

For Bitcoin to replace existing payment systems, it would have to have clear advantages over credit cards and PayPal . The difficulty is that advantages are subjective, and so far neither merchants nor the general public have seen much. Bitcoin’s advantages are certainly not enough to compete with credit cards.

What is blockchain?

After the failed marketing campaign to use Bitcoin as a replacement for credit cards and online banking, people turned to talking about "blockchain," the most confusing part of Bitcoin.

The need to explain how the blockchain works is a major weakness in promoting Bitcoin. Almost no one cares how a bank processes a transaction. People only care about the specific transaction record at a certain time and place when they check their account. What is going on behind the scenes is not considered.

Bitcoin is more advanced than the existing banking system, so people pay attention to this technological achievement. But people don’t understand how perfect and efficient the existing banking system is. The banking system we use today has evolved over tens of thousands of years to integrate into our social life. Although there are some unsatisfactory aspects ( high fees and service quality ) , it is generally successful.

Not that complicated

While ordinary people still don’t understand what Bitcoin has to do with them, technology experts and financial experts are already arguing over its value and the superiority of digital cryptocurrencies over existing payment systems. But none of this is important to understanding Bitcoin.

All you need to know is that Bitcoin is just another form of money, that's all.