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“I don’t understand it. I still don’t understand it.”
– Tom Hanks, big
At a holiday dinner last night, I was asked to explain cryptocurrencies to someone who was very new to the topic and had never heard of Ethereum before.
You did a terrible job.
From trying to explain proof of stake, to smart contracts, to DeFi, to DePIN and then back to what blockchain is, I’m sure I left my audience much more confused than I found them.
It was a reminder that the best person you can learn from is often just one step ahead of you on the topic, not 10 or 100 — or someone who thinks about a topic twice a year, not every day.
For example, technology expert Ben Thompson, who mentioned cryptocurrencies in his book Strachry Our twice-yearly newsletter explains why it’s important better than any of the cryptocurrency experts who think about it on a daily basis.
Thompson helpfully starts from the beginning: “Blockchain is the idea that disparate groups can reach consensus without any kind of central authority.”
This decentralization gives cryptocurrencies “all the qualities” of digital goods — they are infinitely replicable, globally accessible, and easily distributed — yet they are “scarce.”
Thompson thinks this is conceptually interesting because it solves a problem he faces as a writer for digital newsletters: “Digital goods are fundamentally difficult to monetize because they are infinitely replicable.”
However, he recognizes that in practical terms cryptocurrencies are mostly interesting as a way to send money peer-to-peer – which is why the argument he makes for cryptocurrencies is mostly about stablecoins.
He says stablecoins represent “all the kinds of online things” he finds interesting — global ledgers, scarcity, fast transactions — and none of the “negative” things: “pure speculation on currency appreciation, wild fluctuations in value.”
Net-net, “What you end up with (stablecoins) is basically this currency that works like the Internet.”
This is the definition I needed at dinner last night: Cryptocurrency is a currency that works like the Internet.
Thompson also explains why this is useful for the kind of fintech companies he often writes about: “If you want to build some kind of financial entity, you don’t have to build a backend to keep track of everyone’s finances… you can just build it directly on top of the blockchain.”
This allows fintech companies to “offload” all the hard parts of finance to the blockchain: holding funds, settling accounts, keeping a ledger of transactions, and perhaps most importantly, building trust.
“You can get it all for free with blockchain technology.”
Sure enough, my neighbor at dinner – a real estate guy – saw the appeal.
Thompson’s explanation, which was given in 2024, seems even more relevant at the end of 2025: Token prices have fallen badly, but traditional finance companies – such as Stripe, BlackRock and Visa – are increasingly excited about offloading parts of their business to the blockchain.
Thompson’s podcast will help explain why.
A Medium post from 2013 offers the most intuitive introduction I’ve seen to what Bitcoin is and why it’s important — and the best opportunity to explain it to beginners over the holidays.
The author begins on a park bench, using a simple apple exchange to illustrate the primary purpose of blockchain: manufacturing digital Apples act like physical apples.
These blockchains, he says, “live in everyone’s computers (where) all transactions that have ever occurred, from all time, will be recorded in digital apples.”
As a result, sending one of those apples is “as good as seeing a physical apple leave my hand and fall into your pocket.”
It’s also not as permissible as a real apple exchange: “Just like on the park bench, the exchange involved only two people. You and I—we didn’t need Uncle Tommy there to make it work.”
Uncle Tommy is the alternative to banks, of course.
This setup offers a witty explanation of Proof of Work: “You can participate in this network as well and update the ledger and make sure everything is verified. And for the trouble, you can get 25 digital apples as a reward.”
He explains the idea of scarcity as well: “In reality, this is the only way to create more digital applications in the system.”
With everything that was established, Bitcoin became more understandable: “This system that I explained exists. It is called ‘the system.’” Bitcoin protocol. And those digital apples are “Bitcoins” within the system.”
This makes crypto money infinitely divisible and can be sent almost instantly. Anywhere, no permission required.
But that’s not all blockchain technology can do: “I can even make it Other digital things He rides On top Of these digital apples! It is digital after all. Maybe I can attach some text to it – a digital note. Or maybe I can attach more important things; Such as a contract, stock certificate, or ID card…”
It is perhaps disappointing that cryptocurrencies are only now – 12 years later – starting to put stock certificates and identity cards on the blockchain.
But now that it’s finally happening, you should be ready to explain how and why it happens.
In the classic movie bigJosh (Tom Hanks) is promoted from data entry to vice president of product development after only two weeks on the job — all because the CEO is fascinated by his childish wonder at the toys they make.
Josh jumps straight to the top because he has the unfair advantage of being a kid trapped in a man’s body – and this gives him insight into the company’s games that no gaming expert can match.
In a high-stakes product meeting with adults, he responds to a pitch to build a toy that turns into a robot as any child would: “I don’t get it.”
After the marketing data was explained to him, he shrugged, saying, “I still don’t get it.”
His childish approach to questioning and reasoning leads to a much better suggestion: a robot that transforms into a prehistoric insect.
Josh’s method is not new.
Zen concept of Shoshin — Adopting an attitude of openness, keenness and no preconceived notions when learning – dates back to the 13th century.
One Zen master wrote: “There are many possibilities in the mind of the initiate.” “In the expert’s opinion there are few.”
This is still probably the best way to learn a complex and often confusing subject like cryptocurrencies: approach it with an open beginner’s mind.
Fortunately, you don’t have to spend decades becoming a Zen master to practice shōshin (or be a 12-year-old boy) — you just need to channel Tom Hanks.
Next time someone explains a complex cryptocurrency concept to you (like automatic deleveraging or quantum resistance, to name a few), don’t think you have to understand it right away.
Instead, say: “I don’t understand.”
Then, after a second explanation: “I still don’t get it.”
By the third or fourth reply, you’ll probably understand it, and maybe well enough to explain it to me.
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