My 8-year-old has his own Phoenix wallet. Tonight I mentioned that we might need to purchase some liquidity, and he asked what that means. I was at a loss to explain it to him.
How would you explain liquidity to a child?
947 sats \ 1 reply \ @sdf 16 Feb
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That's good, I like that.
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if you can show him a video of how an abacus works, that might help
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Abacus analogy is the most intuitive one my opinion.
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An airport cannot receive more people if the other airport doesn't have enough planes available.
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Think of your Phoenix wallet like a special toy box where you keep your valuable toys (Bitcoin). Liquidity is like having those toys that everyone wants to play with – it makes it super easy to trade! Sometimes other kids don't really want to trade for your exact toy, that's okay. Buying liquidity is like visiting a special toy trading place where they help make your toys a little more exciting so other kids are happy to trade with you again. Remember, Bitcoin is special money to buy cool things online, and liquidity just helps you use it more easily.
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what? no
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100 sats \ 0 replies \ @fm 23 Feb
Lets say you have an empty abacus, Then you add the beads in order to use ( liquidity)
Maybe not the best explanation but its visual
Edit: just saw in the comments this idea was mentioned.. was late😅
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Thanks for all the great ideas.
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René Pickhardt made a recent video that explains it very well using a model. Can't find it immediately..
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When you drive into a tunnel with two lanes, only a single line of cars can go through on each side. Now if we widen the tunnel and make 4 lanes, now twice as many cars can go through. That's like liquidity. The more lanes the tunnel has, the more cars can go through. The more liquidity we have, the more money can go through.
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It still feels a little strange that this is necessary. He's used to me handing him dollar bills for picking up the dog poop. Having to manage liquidity in order to get paid is an odd catch-22.
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He Has a wonderful father
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