Brain Game: How would you explain cryptocurrency to someone from the 70s?
- Each week, our readers vote for their favourite answer and the contestant with the least votes is eliminated
- This week, our final two contestants try to describe Bitcoin and other virtual currencies to someone in the past
We would also appreciate if you could explain cryptocurrency to us, thanks.Contestant 1
Connecting...
Person from the 70s: Hello? Uh, who’s this?
Me: I’m from the future, and it’s your lucky day. What if I told you I could make you filthy rich in 40 years?
Person: Look, kid, calling services ain’t cheap, so if you’re just going to sell me another fake vacation home to steal my money ...
Me: No, it’s better than a fake vacation home because the opportunity I’m talking about is real.
Person: (scoffs) Sure it is.
Me: You see, in the future …
Person: I’m sorry, what? Your voice cut out.
Me: Sorry, the signal is a bit weak since the mobile phone was just invented in your time. How much did you miss?
Person: Everything. Maybe the universe is punishing you for tricking people with these scams.
Me: I’m not scamming you. I’m just a messenger from the future. Basically, something called cryptocurrency is going to get huge in the future. Think of it as being similar to arcade tokens or casino chips. You exchange real cash for the cryptocurrency.
Person: Why would anyone do that?
Me: To purchase specific goods or services, or to keep other people from looking at what you’re doing.
Person: I buy everything I need with cash, and I have nothing to hide.
Me: Well, it is also the safest way to send and receive money! It uses advanced technology to protect your information and make sure that payments cannot be changed by someone else. If someone tries to change the data, other parts of the network can easily check with each other to see if the data is correct.
Person: I still don’t understand how this will make me rich.
Me: In the future, some people have become millionaires by investing in cryptocurrency! The currency doesn’t physically exist, and its worth constantly changes depending on the market. But I can tell you exactly when to buy and sell, so you can get rich.
Person: And when is this cryptic money going to be invented?
Me: Cryptocurrency will be invented in 2009.
Person: …
Me: I can’t tell if you’re dying from excitement or…
Person: I’ll be dead by then!
Me: Well, tell it to your kids or grandchildren.
Person: Sorry, but I don’t want to make my kids think I’m a crazy person obsessed with something fake. Have fun tricking other people with your scam. (hangs up)
Contestant 2
Cryptocurrency might do to banks what email did to the postal industry. Traditionally, we have used banknotes for purchasing goods and services. Today, many of our payments are made using electronic money from our bank account.
Banks are in charge of keeping an accurate record of all the money that has been sent to and from your account. They make sure you don’t create new money from nowhere, and that you don’t spend your money more than once.
So, now the main question: Can we create a way to spend electronic money without needing the bank to be in the middle of every payment?
Yes, and cryptocurrency is the answer. Cryptocurrency is a secret message written in code, which works through a process called blockchain. It is simply a public record of payments that is constantly checked to make sure everything is real.
In a normal electronic payment, the bank records, checks, and updates the amount of money in your account. With cryptocurrency, when you make a payment or exchange money, the whole community of cryptocurrency users is in the middle to make sure the exchange of money is accurate.
Still confused? Let’s try thinking about this in an even simpler way.
Imagine that I only have one HK$20 note. I give you the note. Now, you have a note, and I do not. We do not need someone else to confirm this. I cannot give you another note because I only had one, and I gave it to you.
Now imagine I have one digital note, meaning that it is stored on the computer. I give you my digital note. This is where problems can come up. I could make a copy of my digital note on my computer, and then I would have created more money than I really have. To solve this problem, we need a record to track the movement of money, and someone needs to make sure this record shows the actual amount of money I have.
But, what if the person in charge of this record added more digital notes to their own account? So to solve that, we can allow everyone to look at this record of payments and check that everyone has the correct amount of money after paying or receiving funds. This is how cryptocurrency works.