This is a quick account of my attempt to explain Bitcoin without talking about computers, simulating a decentralised cryptocurrency, peer-to-peer transactions, the blockchain, mining and proof-of-work using only household items…
Last week I gave a Bitcoin talk at Wrington Vale Rotary Club. For anyone not familiar with Rotary, it’s an international organisation that brings together businessmen and professionals to do “service above self” . Most clubs attract an older crowd and at Wrington the average age is 74.
What was my aim for this talk? I wanted to take on the challenge of explaining Bitcoin to a totally non-technical audience. I wanted to find a way to explain Bitcoin, in one go, to people, some who’d never heard of it before, without focusing too much on any single aspect or getting too controversial.
I was well aware that though the audience was smart and that some of them had tech-related backgrounds I had to take a different approach with my talk and put it in terms they’d be familiar with.
So I thought the best way to do it would be to create a new currency, RotaryCoin. It would be just like Bitcoin but paper-based. It would have all the basic components of a decentralised cryptocurrency but in a form that was completely familiar to successful old-school businessmen.
Here’s how it worked:
I knew that the audience would be laid out in cabaret format, with five or six to a table. I printed out numbers and distributed them at random at all the seats. I also printed out a ledger containing the first block of RotaryCoin transactions.
I was number 1 in the RotaryCoin ecosystem and I told them I’d consulted with the outgoing chairman of the club and allocated an amount according to their popularity and their contribution to the club over the past year. Their first task was to find out how rich they were by looking up their number on the ledger and finding any transactions from me to them.
I’d told them earlier about Bitcoin Pizza Day and explained that the next step in the evolution of RotaryCoin was to make it more real by making the first physical transaction. I asked if anyone had anything they wanted to sell, perhaps their soul, or maybe their daughter’s hand in marriage.
I’ll sell my wife
How much would you like for her?
Yep. She’s good at decorating.
I’d also printed out lots of transaction slips so I gave instructions that the buyer had to fill out a slip, give it to the seller who’d then check that the buyer was good for 50 RTC. If so, he would then hand the slip to someone on his own table who’d make two or three copies of it to be handed to other tables.
I’d also printed out a card for each table to tell them whether as a group they were good, honest Rotarians or not. They were to pass the card round the table without letting the other tables see.
We then had a round of trading during which all kinds of things were traded: an old Bentley, grazing rights for two bullocks on a meadow, more wives. At the end of this brief period of chaos, each of the tables had a small pile of transactions to process. I explained that we needed to check the transactions, particularly because we had some wrong’uns in our midst.
Each table had a different set of transactions, and I got them to pick two per table and fill out another printout, the block candidate.
I got a representative from each table to call out a number between 1 and 12 and then rolled two dice until we had a winner. That table then got to make copies of its candidate and handed them to the other tables.
Finally, each table did their own checks of the transactions and raised their right hands if all was valid, their lefts if not.
I think even the ones who’d drawn the honest card had tried to cheat, spending RotaryCoins they didn’t have, so the transactions were both invalid and the submitted block candidate was rejected – and no reward was allocated.
I explained that we’d all just done a huge amount of tedious work to achieve something quite simple and that was essentially what happens behind the scenes of Bitcoin. However, computers are phenomenally good at doing that kind of work and they don’t get bored.
I think they were bewildered as to why some bloke was getting them to fill out little slips of paper and do pretend trades with each other but at the end they were asking really insightful questions. It felt like they all had more understanding of what a decentralised currency is, what a blockchain is, how Bitcoin can work and have value even when the network is part-evil.
To wrap up the talk I suggested that, if it hadn’t happened already, some ‘financial adviser’ would probably come to them in the near future offering the investment opportunity of a lifetime, which would be just like Bitcoin but better, somehow. I asked them if they thought RotaryCoin was better than Bitcoin because it had the backing of Rotary International (it definitely doesn’t) and featured ‘organic distributed ledger technology’ (a paper blockchain).
In other words, it is very easy to make a Bitcoin clone. We did it with paper but it’s not that difficult to clone some cryptocurrency source code (eg from the Bitcoin Core github repo) change a few of the parameters, engage the marketing and PR departments, get some reputable organisations involved and launch with an ICO. The ultimate Ponzi scheme, potentially.
I reckon everyone at that talk could spot a Ponzi Altcoin from a mile off now!