full image - Repost: Explaining BTC to 10 to 15 year old. (from Reddit.com, Explaining BTC to 10 to 15 year old.)
Mining:
Exchanges:
Donations:
Hello guys, I have been seeing so many people asking to explain BTC in simple terms. This my first attempt. I really tried to tone down the technicalities. I will convert this into a proper blog with more visual aspect but thought could post it here to get the feedback or any logical mistakes I did.Since it is a draft, please ignore the bad English. It is not my first language. I will gradually proof read.Also, if you like it and want to tip me. That would encourage me to write more from my understanding and earn sats: LNURL1DP68GURN8GHJ7AMPD3KX2AR0VEEKZAR0WD5XJTNRDAKJ7TNHV4KXCTTTDEHHWM30D3H82UNVWQHKSMMVD3HHWAM9V4JR2VGFGQJWTHere we go: Imagine a scenario whereMonth 1: Alice has 5 dollars, Bob has 7 dollars and Harry has 20 dollars to start with. And there is an apple in a room. Bob really wants an apple, than Alice and than Harry (in decreasing order of want)In a normal bidding for the apple. There is good chance Bob can get an apple as he willing to pay major portion of his money for an apple. He ends up paying 6 dollars for this apple.Now there is a person who comes and hands over disproportionate amount of money to each one. Since Harry is the friend of the person that comes. He gets an extra 10 dollar and everyone else gets 1 dollar each.Month 2: After working hard for that month each one gets paid equally (to keep it simple), 5 dollars per month.Now Alice has 11 dollars, Bob has 7 dollars and Harry has 35 dollars.After few days, they need apple. And now Alice really needs an apple, after that harry and Bob has no appetite for apple anymore this month.In the bidding now, Harry can basically outbid Alice and acquire apple at 12 dollars (can be lower also). Still leaving him 23 dollars.The person comes again and hands over 20 dollars to Harry and 2 dollars to everyone else.Month 3: They earn another 5 dollars for their hard work.Now Alice has 18 dollars, Bob has 14 dollars and Harry has 48 dollars.In the next round Harry really needs that apple, after that Bob and Alice is least interested. Harry has to outbid everyone else with just bidding 14 dollars or less.This can continue for many iterations and what we will see is that the person coming into room and disproportionately distributing money to his friend Harry (very low interest loans look below for reference) and some small amount to Alice and Bob (stimulus cheque for example) is making the cost of acquiring asset (apple) for Harry cheaper and cheaper (in percentage wise bases, which he can sell for more price later) but the price of that apple is going up (from 6 dollars to 12 dollars to 14 dollars in 3 iteration) for Alice and Bob, making it impossible for them to acquire any asset (apple).Hence, the saying, " Rich becoming richer and poor becoming poorer". Buying a house, artwork, yatch is a distant dream for many now.This is the present economy of the world. That we all live in.Now let's see how BTC changes that:In the same scenario, Alice has 5 BTC, Bob has 7 BTC and Harry has 20 BTC to start with.In the first iteration of the scenario described above Bob will pay 6 BTC to acquire that apple.The beauty is that in the world where everything is running on BTC. No person will enter the room and disproportionately give more BTC to Harry and small amounts to Bob and Alice.Month 2: In the second iteration of the above scenario, they earn 5 BTC each that month.That leaves Alice with 11 BTC, Bob has 6 BTC and Harry has 25 BTC.Since in second iteration, Harry did not get any disproportionate amount of extra BTC from his friend. And also acquiring that apple will require him to out bid Alice which will be reduce his BTC holdings by 44%. It will become a question of how much Harry wants that apple. And as described above, it is Alice really wanting that apple this month.If Harry doesn't bid (given he doesn't want that apple this month) the price of that apple still stays 6 BTC.Month 3: They each earn another 5 BTC leaving Alice with 10 BTC , Bob with 11 BTC and Harry still has 30 BTC.As described in the above, now Harry really wants that apple now, but since there are no other bidders. He will get the apple at the price of 6 BTC. Reducing his BTC count to 24 BTC.Let's do another iteration to extend this scenario.Month 4: Each earn another 5 BTC with their hard work.Now Alice has 15 BTC, Bob has 16 BTC and Harry has 29 BTC.In this month it has been 3 months that Bob did not buy any apple and he really wants an apple now. Since he really wants the apple he can pay the previous price of 6 BTC that Harry paid. No one else wanted to get the apple because in this system acquiring BTC can only be done with your hard work only. It is therefore reducing everyone frivolous spending and consumerism (root cause of many problems).Also it can be noted that, the overall wealth of three of them is becoming more less equal each month that passes by.Another amazing thing that has happened which should not go unnoticed that price of apple has stabilized in this free maket at 6 BTC.In future the price can go up or down according how many people want that apple (Jim, the BTC miner coming with 100 BTC that he acquired with from mining BTC and out bidding next person to increase the price to 7 BTC), but in long run will stay predictable and people can plan for it.In this society, people have to do hard work (by selling their expertise or services or goods), create value for society to get that 5 BTC each month and these people can save that 5 BTC each month knowing that when they really want that apple in few months, with hard work they can afford that apple. The ultimate PROOF OF WORK.This is the power of BTC and the money that has fixed supply and limited resource.I hope this made sense if you read it till here. I am happy to receive feedback.Ref: https://www.propublica.org/article/different-names-same-address-how-big-businesses-got-government-loans-meant-for-small-businesseshttps://www.cnbc.com/2020/04/21/large-public-companies-are-taking-small-businesses-payroll-loans.htmlhttps://www.propublica.org/article/the-government-gave-free-ppp-money-to-public-companies-despite-warning-them-not-to-applyhttps://www.washingtonpost.com/business/2020/04/28/federal-reserve-bond-corporations/
Social Media Icons