Should we start educating our kids about cryptocurrencies?
It’s a good question, and one I’ve thought about a lot as the kids get older and spend more and more time online.
Experts predict that by 2027 around 10% of the world’s GDP will be stored on so-called ‘digital ledgers’ or Blockchain-related technology.
Fast forward another five years, and as technology and our understanding (and acceptance!) of it advances, the chances are digital currency will have evolved even further.
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So, what do we need to know about cryptocurrencies as parents, and how can we best educate our kids about cryptocurrencies? This collaborative post takes a look at the basics.
How to educate kids about cryptocurrencies
1. Make sure you understand the basics
The world of cryptocurrencies can sound – well, cryptic! – but it’s important to understand the basics yourself before you start talking about it with your kids.
Cryptocurrency, also known as crypto, is a form of digital currency that exists digitally and uses cryptography to secure transactions. Cryptocurrencies don’t have a central issuing or regulating body like a bank – instead there is a decentralised system to record transactions and issue new units. In simple terms, it’s a world-wide currency and there are no banks to verify transactions.
It’s also important to familiarise yourself with crypto terminology such as Bitcoin (the most popular type of cryptocurrency), crypto loan platforms (which offer loans against cryptocurrencies deposited by the customer as collateral) and Blockchain (a database or digital ledger).
If you’re not sure where to start, why not make it fun and learn together. There are all sorts of fun facts and stats to be found online, like the fact there are thousands of different cryptocurrencies compared to just 180 traditional currencies, and that the first commercial Bitcoin transaction was for pizza!
2. Help them understand the difference between real & digital money
Giving children pocket money in exchange for completing chores or doing little things at home is a great way to start teaching them about the value of money.
In order to help them understand the difference between real money and digital or virtual money, you could open a savings account with them so they can pay their hard-earned cash into a bank.
Then, when you get home, show them that account online on your phone or computer. That way they can see that although the money is now digital and appears virtually, it was ‘real’ first when they paid it into the bank. This will help them understand the difference between real money and digital money.
3. Explain the advantages & disadvantages of cryptocurrencies
We’ve all heard amazing stories about teenagers becoming millionaires by the time they’re 21 by investing in cryptocurrencies. But where there is great profit there is also great loss – and these great losses don’t tend to make so many headlines.
The fact is it’s possible to lose everything in a day and it’s important kids understand this. There are a number of great books for kids aimed at separating the myths from the facts and debunking the advantages and disadvantages of cryptocurrencies, and YouTube is also a good resource.
4. Explain how cryptocurrency is likely to evolve
In our increasingly cashless world, some experts believe cryptocurrency is the future of money. Only time will tell of course, but in the meantime, it’s a good idea to talk to kids about the concept of digital assets.
Although cryptocurrency is still in its infancy, the industry is evolving fast. To put it in context, more than 300 million people either own or used cryptocurrency in 2022, and Bitcoin is the subject of a social media post every three seconds. Statistics like these make it a good idea to make sure we educate our kids about cryptocurrencies by starting with the basics.
Is cryptocurrency something you’ve talked about in your house recently? I’d love to hear about your experience!
This post was written in collaboration with Get Blogged.
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