So basically if you don't have a advanced degree in computer science or some other kind of knowledge within the field, understanding what bitcoin and crypto currency is could be tricky. But it doesn't really have to be, i am no expert in this field. Just a average joe fascinated by the technology and the possibilities many of these currencies and platforms bring.
So here is the way i used that made him understand what these new "internet money" was and how they were better than the economical system we have today with online banking and banknotes.

I started with cash, the money people around his age are most familiar with

Every adult (well most of us) have a basic understanding of cash and how they work. We can walk around with coins or banknotes in our wallets and trade it in for goods and services. We can do this because the country we live in believe these banknotes or coins have value, the government endorse and accepts this value and so does small shop owners and big companies.

Then i drew lines between physical money and electronic money

He knows how to use his bank online so this step was kind of easy to explain.
I asked him where he thought these electronic money was stored?
He answered with "the bank" which technically is correct, all these "electronic money" are stored in the computer systems at commercial banks.
I explained to him what a bank basically does, they record his usage and savings and basically shows him what he has used and how much money he have left.
When you want to pay a bill or transfer your money online what you are doing is making a order to the bank which handles the transfer.
You don't do this yourself, the receiver don't receive these money himself. The banks are the middleman in these exchanges.

Can i store these money myself?

If i had walked into the bank and asked the teller if i could hold these electronic money myself on my computer instead of using their system the teller would probably just recommend me to use a ATM and get cash.
But that's not what i want, i want to keep my own record without paying large fees.
I want to be able to send money to my grandmother without waiting 24 hours.

We cant do that with our money.

The copy paste problem

If i could do that and the bank allowed that they would probably send me my money in some sort of file.
What is stopping me from copying this file and keep spending made up money?
A ledger needs to be in place, this ledger shows me how much i got and records all transactions. So i can't make up new money without the ledgers knowledge.
But you can't keep this ledger to yourself, cause if everyone did that some people would lie about how much money they have and spend more than they actually have in their account.

So to use such a ledger it needs to be public, everyone should and would be able to look at transactions.
This way, you can't cheat it.
I can't send you digital money i don't have because then it wouldn’t synchronize up with everybody else's ledger. It’d be a tough system to beat.
And the ledger isn't controlled by just one person or ten people, so i know there’s no one that can just decide to give himself more digital money.
The rules of this system with the ledger was defined from the beginning and it's what's called open-source.
Something that is open-source is like...wikipedia. Something for smart people to contribute to, maintain, secure, improve on, and check on.

You could also participate in securing this ledger and keep it updated with the help of your computer, this is called mining but were not going to talk about that today.

The bitcoin protocol

The system i just explained is the bitcoin protocol and it exists, and those digital money in these open ledgers are called Bitcoin. The transactions acts like real money transactions in this open ledger, if i buy a pack of cigarettes from you and pay with bitcoin. That transaction is stored within this ledger. I can see the transaction and so can you.
In other words, these bitcoin behaves like a physical object.

But the cool thing is that it's still digital.
I can send grandmother money with a simple click, even if i am nowhere near her. And it will transfer fast, you don't have to wait a whole day to receive it.
I can even make other digital things ride on top of these bitcoin. Maybe I can attach some text on it ,  a digital note.
Or maybe I can attach more important things like a contract, or a stock certificate, or an ID card.

Conclusion

He understood what i was talking about. Sure there are probably easier ways of explaining it but he got it, i may have forgotten something but he got it.
I didn't go into detail about the blockchain or technical mumo-jumbo as he calls it.
What he asked several times was, why?
Why should he use these bitcoins instead of "real money"

Because money don't need a middleman. We don't need someone at the top in big banks making up money and taking our money in transaction fees.
Corrupting the markets and praying on the poor is what they do.

With this technology, people in poor countries without the ability of banking can send and receive money with ease.
We would all be in full control of our own money.

Sorry for any grammatical errors in this text, if there is something you want to add please comment. Also if i forgot something or made an error, please leave a comment and let me know and i will correct it the next time i speak with my grandfather.

The next time i talk to him i will also show him steem, he uses facebook and reads a lot on the internet so i think he will enjoy reading the posts made here.