Explaining why cryptocurrency matters to people new to the industry can be tricky. But after testing about 20 different methods, I’ve settled on a basic approach that’s getting great results.

I start with the “what.” I always use bitcoin as my example. It’s by far the easiest to explain, the most relevant and arguably the most serious cryptocurrency project.

And I start by telling them that bitcoin is a way for people to transfer value (money) between themselves without banks or middlemen.

Then I explain that bitcoin was ultimately designed to be an alternative financial system. It’s not just “digital cash.” It’s a network complete with security, custody, transaction settlement, lending, borrowing, etc.

Of course, I mention that the number of bitcoins is strictly limited to 21 million. I contrast bitcoin’s limited supply (scarcity) with government/fiat money, which can be printed to no end.

Each bitcoin can be broken up into 100 million pieces, so it’s highly divisible. You can send $0.10 worth of bitcoin or $10 million worth to someone just as easily.

It all runs on a decentralized network of servers all over the world, operates 24 hours a day and has a nearly flawless security record.

But Why?

Most people get the “what” of bitcoin. It’s the “why” they have trouble with. Why do we need bitcoin?

The why of bitcoin is actually pretty simple. Many of us think we’re going to need new ways to buy stuff, store value and transfer money in the future.

We think we’ll need an alternative to fiat money because fiat is directly tied to all the debt that’s piling up around the globe. When debt becomes a problem, the currency eventually becomes a problem. Historically, debilitating inflation is the result.

Bitcoin opens the door to a different path for the world to take. Instead of spending too much, piling up debt and creating money out of thin air, we could start to live within our means by using sound money (like bitcoin) to do our business.