If the terms “crypto” or “blockchain” make you roll your eyes in confusion, you’re not alone. One of the most popular terms in contemporary finance, cryptocurrency it can be incredibly difficult to understand. Is it a digital currency? A stock? And why have so many people made memes about it?

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Some of these questions are easier to answer than others, especially when using one active as ChatGPTwho is adept at synthesizing complex information into easy-to-understand bits. Which, for many laymen, is exactly what they need to control the crypto market.

I’m one of those laymen, so I decided to ask ChatGPT explain cryptography to me like I was 12 years old. This is how it broke.

I started with a very simple message: “Can you explain cryptography to me like I’m 12?” I my friend ChatGPT he came in the clutch, saying he would explain it to me as if we were friends over lunch.

“Crypto (short for cryptocurrency) is like money on the Internet, but it’s not printed as dollars or coins. It’s completely digital. You can’t hold it in your hand, but you can use it to buy things, save it, or send it to someone, like money.”

Hey, that makes sense! He even explained where the word “crypto” came from:

“‘Crypto’ comes from cryptography, which is a fancy word for super-secret codes. Cryptocurrencies use these codes to: keep your money safe, make sure no one can cheat or copy it, and let people trust it without the need for a bank.”

Thanks, ChatGPT!

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OK, the money stays in the bank or financial institution of your choice. Actions live in your brokerage account. But where does cryptography reside?

My friend ChatGPT tells me that cryptography lives on the blockchain, which is basically “…like a huge public ledger that everyone can see, but no one can delete or cheat.” The blockchain keeps track of every transaction (like who sent what to whom). And when you buy crypto, the virtual currency is also stored in your digital wallet.

“Every time someone sends crypto, it’s added as a new line to the notebook and everyone agrees it’s real,” ChatGPT said. “Crypto is decentralized, meaning there is no boss, bank or government in charge. It runs on thousands of computers around the world.”

This makes a lot of sense. Now I’m starting to understand. But what can I achieve with it? Turns out, a lot. I can buy things online, send money to a friend instantly (even if they’re in another country), or hoard them like a dragon with their digital gold. You can even use it in online games or to buy digital art such as NFT.

With a more solid basic understanding of what cryptography is and how it works, I decided to ask ChatGPT a follow-up question: Where does it get its value?

My friend gave me a simple answer to begin with, saying that, in essence, it has value “because people think it’s valuable and are willing to trade things for it.” Simply put, popular cryptocurrency has value because it’s popular and people think it is.

In fact, traditional money works the same way. Fiat currencies like the US dollar are not backed by gold or silver: they have value because people agree that they do and trust that others will accept them in exchange for goods and services. ChatGPT explained more, detailing the supply and demand factor that Bitcoin’s creators built into it as a way to increase its value:

“If a lot of people want a certain crypto (eg Bitcoin), and there is only a limited amount, the price goes up. It is a kind of rare trading cards. If only a few exist and everyone wants one, it becomes more valuable.”

Utility is another factor, as some cryptocurrencies have value because they help run applications, enable smart contracts, or facilitate NFT purchases.

“The more useful something is, the more people want it = more value,” ChatGPT said, adding that people’s trust in blockchain and general hype for crypto have also played a role in giving it value.

Thanks to ChatGPT, I went from a complete crypto novice to someone who really understands the basics. However, it’s always wise to double, or even triple, check everything you learn from ChatGPT and use it as a basis for your own research.

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This article originally appeared on GOBankingRates.com: I Asked ChatGPT To Explain Crypto Like I’m 12 – Here’s What He Said