How to explain crypto (Part 3 of 7): the appeal of crypto

If you’re wondering how to explain crypto to your older relatives in a way that makes sense, you’re not alone. Crypto is a complex subject. Many people, not just older generations, are still skeptical of it. 

That’s the purpose behind this series: to make it easier to explain crypto to those who don’t understand it, particularly people who weren’t raised in the digital age.

Before I knew anything about crypto, I definitely had my own doubts about it. So I wanted to begin this series to help shine a light on cryptocurrency for those looking for a simple explanation in one convenient place – just like I was when I first started learning.

Previously in the series, we looked at how crypto fits into the history of monetary systems. Now, we’ll look at the first main use case for crypto: investing.

How to explain crypto investing to your parents

Many people are likely already familiar with investing as a use case for crypto. Considering crypto still isn’t widely accepted as a form of payment by many businesses, investing is one of the main ways people use it.

But why does investing in crypto attract so many young people? And why are older generations often skeptical? How can enthusiasts explain the appeal of cryptocurrency investing to their parents– or anyone who doesn’t understand crypto– in a way that makes sense? 

If you want to learn how to explain crypto to your older relatives, there are five points you should make sure they understand.

5 reasons behind the appeal of cryptocurrency investing

1. It’s a form of wealth building

If you’re struggling to figure out how to explain crypto to your parents, the first point to mention is that wealth-building as a millennial or Gen Zer looks a lot different than it did for previous generations. 

Millennials, in particular, are struggling to purchase homes. Many are delaying other important life stages like marriage and starting a family because they are struggling financially. 

Both millennials and the oldest members of Gen Z struggle with large amounts of student loan debt, making it hard to accrue wealth and plan for major financial decisions, like saving for retirement. 

This is where crypto comes in as a more accessible way of wealth-building for younger people. In fact, many millennials and Gen Zers are planning to include crypto as part of their retirement plans. 

Crypto is an asset that can be purchased more easily than a car or home, and it has the potential to create a good ROI if held over the long term. This allows younger generations to have some form of wealth they can use to prepare for their future.

2. Many support the technology

Another reason behind the appeal of cryptocurrency investing is that many people support the technology behind it. Crypto enthusiasts see the potential this technology has to revolutionize many industries in society. 

For example, blockchain technology can be used in the healthcare industry to lower costs, keep patient data more secure, and improve patient record management by making the system decentralized. Blockchain also has uses in real estate, supply chain logistics, finance, and gaming. 

Blockchain technology is also used for various other aspects of the crypto-related projects that enthusiasts are excited about, such as smart contracts, dApps, and NFTs. 

Crypto supporters see investing in crypto as a way to be part of the future. They strongly believe this technology will become mainstream and improve our society for the better.

3. More secure financial transactions 

One reason blockchain is so widely used is because of how safe it is. Its use of cryptography and decentralization makes it one of the most secure options for use in the financial world, which is why people are so supportive of it.

Before you learn how to explain crypto, make sure you can provide a basic explanation of how blockchain works and why it’s secure. This is an important aspect to get people to understand. 

Hacks usually only happen on third-party exchanges, where crypto is stored in a centralized location. But it’s virtually impossible to hack into a blockchain network itself. Crypto supporters invest in crypto because they like that blockchain is trustless, decentralized, and doesn’t allow the data stored on it to be changed in any way. 

In a decentralized system, there is no central authority responsible for controlling everything. Instead, the network is run by a group of validators around the world, and anyone can join the blockchain network to help verify transactions. This makes the system transparent.

4. Distrust of the current financial system

Crypto enthusiasts tend to view traditional institutions and the current financial system as inefficient and ineffective. They want to solve the problems of financial accessibility and financial equality, and they think crypto offers a better solution than the current system. 

For example, digital currency has the potential to help the unbanked around the world. These are people without access to the financial services provided by banks, whether they live in rural areas without one or don’t meet the qualifications for a particular service. 

Crypto is an accessible way for these people to send and receive money, take out loans, or make transactions. 

In addition, many younger people turn to crypto because they find it easier to understand than learning to navigate the traditional stock market. Young people distrust the current system, so they may feel alienated from conventional investment pathways and financial advisors. 

Crypto supporters also see crypto as a better investment because they see it as a good store-of-value compared to fiat currencies, which are at risk of inflation. With Bitcoin, there can only ever be 21 million bitcoins in existence, ensuring that it won’t be at risk of inflation. 

Other cryptos may regularly “burn” some of the coins in circulation, which keeps their price stable.

5. The fun of crypto culture 

If you’re wondering how to explain crypto to those who don’t understand it, a piece you can’t leave out is the culture. The culture is a big reason behind the appeal of cryptocurrency investing. The crypto world has its own vocabulary and phrases, like “hodl,” “to the moon,” and “sh*tcoin.” 

The community is also filled with memes. Memes are a big part of the crypto culture, with investors putting their money behind memecoins purely for fun. For example, Dogecoin started out as a parody of Bitcoin, and it has since gone on to become one of the top 10 cryptocurrencies by market cap. 

Crypto investors are willing to take on the risk of investing in memecoins simply because it’s something they enjoy, have fun with, and can use to connect with other people.

Lastly, the communities organized around specific coins are often very interactive. The founders of crypto projects usually communicate with the investors directly through social media. Many projects have their own social media pages where anyone can go and discuss their ideas. 

What use case will be covered next?

Now that you know how to explain crypto investing to your parents or older relatives, they might ask you what other uses crypto has besides as an investment. And while investing in crypto is its most popular use at the moment, there are still other things you can do with it. In the next part of the series, we’ll explore the second use case for crypto: crypto banking.