Public relations is about how Bitcoin is presented to the world. The mathematical foundations of Bitcoin minimize the level of trust necessary to use it, but for anyone who isn't interested in cryptography the strength of the Bitcoin brand is more important. This page lists some community-developed guidelines, so if you'd like to promote Bitcoin, consider these talking points.
Bitcoin is technically a crypto-currency, that is, a currency based on cryptography. However the crypto- prefix has another meaning, "something whose nature is obfuscated", as in crypto-fascism. Also, cryptography is correctly perceived by many as a difficult and highly academic form of mathematics, which makes crypto-currency sound intimidating.
There are various alternatives, but many don't translate well into other languages or have other equally undesirable connotations.
- Bitcoin is an internet currency. This is an accurate description and combines two everyday concepts people are familiar with.
- Bitcoin is a crypto-currency, grassroots currency, "currency of the people" etc. All these are loaded terms that will color peoples perceptions.
Bitcoin has many benefits over more traditional payment systems. Many of them can be summed up in one word: flexibility. Everyone likes flexibility, as long as it isn't too hard to deal with.
- Bitcoin can be stored with a bank or financial institution just like existing currencies if you want, but you're free to explore alternatives right up to and including entirely bank-free operation. After the financial crisis, disillusionment with banks is widespread and this aspect may appeal to some (not all).
- Bitcoin can reduce the costs of everyday goods, by making the financial markets more competitive and eliminating the (often 10%) risk premium that credit card transactions entail.
- Bitcoin is fair: it's as easy for you to sell things as buy them. Contrast with most existing payment systems in which accepting payments is much harder than making them.
- Bitcoin has strong privacy: you should be able to choose who knows about your financial transactions. There are no statements mailed to you detailing your every financial move.
- Bitcoin makes it easier to sell things over the internet. Most people aren't familiar with the myriad difficulties in this seemingly simple task.
- Bitcoin transactions are free. They usually are today, but there are a few cases where a small fee is required. And in future fees will play a larger role. It's hard to predict what level fees will end up at, as they are paying for something entirely different to existing systems. There are good reasons to believe Bitcoin transactions will always be cheaper than most financial transactions are today, but the arguments on this topic are complex.
- Bitcoin can't be taxed. Tax collectors were around before electronic payments and they'll be around after Bitcoin.
- Bitcoin is anonymous. Anonymity and Bitcoin is a complex topic, and anonymity means something slightly different to privacy.
Politics and the law
Bitcoin appeals to many libertarians, a political movement that emphasizes minimal government and individualism. If you are such a person, it's tempting to frame Bitcoin as some kind of anti-government force. But right or wrong many people are turned off by politics, and many others don't have an anti-government world view. This is especially true in Europe.
- Bitcoin is a chance to revolutionize the financial system, making it fairer and more democratic.
- Bitcoin offers a strong level of privacy, but the people you trade with still know who you are. If the police turn up with the right warrants, they will probably learn who owns particular addresses. This means lawbreakers can still be tracked down with sufficient effort. As an analogy you can use the internet itself - whilst the average person and even large corporations can't find out the real identity behind an IP address, the law can make everyone work together to identify the owner.
- Bitcoin is a way to topple or restrict the power of governments. None of the key project developers share this goal.
- Bitcoin is impossible to regulate or control. There are schemes in which by regulating miners, Bitcoins can be frozen much as assets are sometimes frozen today. It's hard to know if they will ever be implemented, but it's not the case that Bitcoin cannot be regulated.
- Bitcoin is going to be outlawed. There aren't any laws that would make Bitcoin obviously illegal, however, financial regulation is an extremely complex topic and it's possible that individual companies, exchanges etc may at some point be found to not be in compliance. This happens to large, well respected financial institutions so it's unreasonable to expect it will never happen to something Bitcoin related.
Starting around the middle of 2010, Bitcoin has experienced dramatic growth in both the size of its community and exchange rates. People who are naturally optimistic or enthusiastic about Bitcoin sometimes try to promote it as a kind of get-rich-quick scheme.
- Bitcoin is an experiment that has grown rapidly as interest in the idea spreads.
- There are many people trading real goods and services with Bitcoins.
- Whilst the fundamental idea of Bitcoin is sound, pricing it is hard because nobody really knows the future potential. As a result the value swings wildly back and forth.
- Although speculation on Bitcoins value is possible and many are doing it, hoarding coins is an extremely risky investment strategy. Like many risky investments, it has potentially high returns but you could also lose everything.
- Whilst Bitcoin might fail, the concept of internet currencies is here to stay.
- Bitcoins value has only gone up. Whilst the long term trend has been up, exchange rates are highly volatile and go down frequently.
- Get in now before it's too late. This makes Bitcoin sounds like a scam.
- Bitcoin will take over the world unless <foo>. There are many potential end-games for Bitcoin of which "taking over the world" or "absolute failure" are only two. It could just as easily end up stuck in a niche, becoming an established competitor in the internet payments space but not going beyond that, etc.
Bitcoin uses a simple and easy to understand economic model, that is quite different to the one used by regular state-backed currencies today. Many people who just want to use the currency won't be interested in this aspect of the system. If they are:
- Bitcoin is intended to have a stable quantity of coins in existence in the long run.
- Bitcoin inflates rapidly at present because the system is young. Over many decades, inflation will slow and eventually stop.
- Assuming the (Bitcoin using) economy grows, that means that after some decades of operation, the value of a single Bitcoin will increase at roughly the same rate as the economy itself.
- A growing economy with a static currency behaves, to the end user, much like a growing economy in which you put your money into an interest-bearing account. The value increases slowly over time, but you can usually earn more by investing in higher-risk ventures.
- If it comes up, the usual formation of the deflationary spiral argument (people won't spend money because it's always worth more tomorrow) is over-simplified. Consider consumer electronics, in which waiting a few months practically guarantees you something better for the same money. The actual economic argument, which is valid, has to do with the way existing currencies are expanded via the issuance of debt. Bitcoins are not issued via loans so the argument doesn't apply in the same way.
- Bitcoin is deflationary. This implies the total amount of currency is intended to shrink. After inflation eventually shuts down, the currency will shrink at a very slow rate due to natural erosion, ie, people losing their wallet files due to failed hardware and missing backups (or simply losing interest and exiting the system). But this is better described as unavoidable than intentional.
- There are 21 million coins. The Bitcoin definition of a coin is very unintuitive: it's a unit that can be divided into 100,000,000 pieces. If you want to discuss the exact limit, be sure to clarify that whilst we talk about "bitcoins", the placement of the decimal point is arbitrary and was chosen for convenience.