Building Trust in Bitcoin: Why Mental Models Matter

An adapted version of the talk @BrennenByrne gave on July 11 at Inside Bitcoins: Chicago. You can find the full slides for that talk at getclef.com/mental-models.

The most critical problem facing the Bitcoin community is finding a way to build trust on the blockchain. This may be counter-intuitive for technical folks, because to a computer the blockchain is “trustless”. But if we want non-technical folks to use Bitcoin, then first we need to earn their trust. That’s going to happen with mental models.

A mental model is a shortcut to understanding something. Instead of trying to explain a new concept with all of its nuance, I use concepts you’re already familiar with to get you the gist very quickly. There are a few mental models that are already fundamental to the way we talk about Bitcoin and the blockchain that help illustrate the point.

The first model most people encounter when they hear about cryptocurrency is the idea of “a Bitcoin.” The name Bitcoin compares cryptocurrency to a physical coin, but the two are actually very different.

Real Coins vs. Bitcoins

A real coin is a physical object that I can hold in my hand, and it’s discreet so if I’m holding a dime in my hand, it will never accidentally turn into two nickels. It cannot be divided (half a nickel is not worth 2.5 cents), and it is printed by the US Mint.

A Bitcoin on the other hand, is abstract money. It’s not discreet, so if two people send me 1 Bitcoin each, it is impossible for me to send them the “same” bitcoin back. There is no such thing as the “same” Bitcoin, only equal values of Bitcoin. Bitcoins are also divisible to 8 places and are created as a reward for miners.

But the mental model of a “coin” is still really useful when we talk about Bitcoin because it communicates some of the most important concepts really quickly. In particular, both:

• Are stores of monetary value
• Can be sent from one person to another
• Can be exchanged for one another, I can trade a Bitcoin for physical coins or vice versa

When I first try to tell someone about a cryptocurrency, those are the most important points I want to get across, so using the mental model of a coin is great shorthand.

Two other fundamental mental models are Bitcoin “wallets” and Bitcoin “miners. Bitcoin wallets are large numbers, not leather money-holders, but you need them to spend money and if you lose them, you lose your money. Bitcoin miners are doing math, not digging ore, but they are taking a financial risk in hope of a reward and are competing for scarce resources. These mental models cheat!

Mental models aren’t complete, accurate depictions of the things we’re modeling. They’re shorthand to let us get our point across quickly. But that shorthand is critical for new technologies. You’re never going to teach the world cryptography (we’ve been trying to teach everyone long division for thousands of years and it’s still a poorly distributed skill), so you need let people use the technology without understanding it.

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That’s why Bitcoin is mostly an innovation of metaphor, not technology.

Cryptography, distributed systems, and digital currencies all existed before Bitcoin. But the mental models of Bitcoin abstracted away the details of signatures and ledgers so that we could wrap our heads around sending money in a very new and different way.

And the development of those mental models is a critical part of spreading any new technology.

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Three Stages of Innovation

Every new technology goes through three stages of innovation: Technical Knowledge, Abstracting Complexity, and Consumer Adoption.

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Technical Knowledge is the period after invention where a new idea is researched vetted and explored by experts. Universities are hotbeds of activity, ideas improve and change quickly, solutions are tested by early adopters, and the concepts remain very technical.

Abstracting Complexity is the maturing period for a new technology. Complex topics are simplified and packaged. Technical jargon is weeded out, ideas stabilize and the best win out, the technology is applied to real-world problems, and mental models cover up the technical knowledge.

Consumer Adoption happens when audiences become familiar with the mental models and the technology can go mainstream. Here, the media can deliver a clear value proposition, the price and market are segmented, no technical education is required to use the technology, and so it can spread much more quickly.

Bitcoin is just entering stage 2. In order to hold Bitcoin, you have to know what a private key is and how to keep it safe. There are unexplained QR codes and products explain themselves with words like “decentralized” and “blockchain.” A few companies are just starting to abstract away the technical knowledge to make Bitcoin useful for non-technical folks. Changetip is letting people tip on social networks and Purse is offering discounts to Amazon purchases, but most products are still very heavily technical.

So now it’s critical for the ecosystem to be thinking about how we build those mental models.

Everyday Mental Models

A great place to start is to think about some of the mental models you encounter every day. When you turn a steering wheel, you don’t need to think about how the steering wheel attaches to the drive train, or how the drive train turns the tires while they’re spinning. When you swipe your credit card, you don’t need to think about SWIFT or bank settlements. When you microwave your food, you don’t need to understand radiation. Instead, the magic of radiant heat and microwaves is packaged into the mental model of an “oven” and is controlled with a timer.

There are a few rules for creating mental models.

How to Build Effective Mental Models

The best mental models make complex technology feel intuitive. Here’s how to create them:

1. Stop Teaching Your Customers

If your product needs long explainer videos or extensive documentation, you’re making it too hard to use. People don’t need to understand the mechanics of cryptography any more than they need to understand how a microwave works to heat food.

2. Meet People Where They Are

Find analogies that relate to things people already use. For example, at Clef, we modeled our product after a physical key—a familiar concept that made digital security easier to grasp. People are already familiar with putting a piece of metal into a door to prove they’re allowed in, so we piggy-backed on that idea.

3. Focus on What Customers Care About

Your product may be innovative in a hundred ways, but people only care about the benefits that impact them directly. Simplify your messaging and highlight the most important value. Find the thing that’s most important to your customers and hammer that home.

4. Eliminate Jargon

Unless your product is exclusively for technical users, remove confusing terms. Here’s a list of words that should not appear on your homepage if you’re targeting everyday users:

❌ Private Key (or Public Key)

❌ Multi-signature

❌ Blockchain

❌ Cryptography

❌ Decentralized

❌ Cold Storage

❌ Consensus

If your audience encounters unfamiliar terminology, they’ll assume your product isn’t for them.  If your product or service requires long explainer videos or complicated documentation, then you’re asking too much of your customer.

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The Future of Bitcoin Mental Models

Bitcoin is still in the early stages of mainstream adoption, and we have a long way to go in making it user-friendly. The good news? The best mental models haven’t been built yet.

As more companies simplify Bitcoin and create seamless user experiences, trust will grow, and the technology will become as effortless as swiping a credit card.

The opportunity is huge—it’s time to start thinking about how we translate innovation into intuition.

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Originally published at blog.getclef.com on July 14, 2015.

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