How to explain Bitcoin to your grandmother

Starting with physical and then electronic currency, point out that banks are simply "intermediaries that 'keep score' of e-money" by maintaining a time-stamped ledger. "For electronic money to be real, we rely on a bank to say "yes, Brett originally had £400 ... someone sent him £50, and ... he sent £100 to someone, and now he has £350."

"we have to trust in the banking system in order to trust in the money." Bitcoin is a decentralised intermediary that we don't have to trust: people can't copy/paste bitcoin. Everyone has a Public Key, linked to bitcoins. To send someone bitcoins, I broadcast to the Bitcoin network: "I am Public Key M; I wish to transfer X Bitcoin to Public Key N. Please check and record it on the ledger", which is "the Blockchain... a computer file that gets constantly updated, and it is held on the computers of everyone in the Bitcoin network... built and maintained by ... Miners", who (competitively) earn bitcoins in return for validating and recording transactions. So Bitcoin is "a currency that grows in the process of people trying to maintain its integrity".

Transactions take a lot of computing power, and are validated in groups called blocks which, when validated, are added to the blockchain. The "act of recording changes the coin balances... makes the transaction real... coins [exist] in the historical record of the blockchain... a collaboratively-built knowledge bank ... All I have on my computer is a public key which says that I am the rightful owner to a part of that history" - so dont lose access to your Key!