How to teach cryptocurrency to your children

Teaching children about cryptocurrency can be a great way to make them familiar with the upcoming era of blockchain technology and decentralization.

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Jay Crypto

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Last updated Mar 2, 2023 at 08:45 PM

Posted Mar 4, 2023 at 02:47 PM

Teaching children about cryptocurrency

Cryptocurrency is shaping the new digital economy and soon it is going to be a very crucial part of your children’s future. So it becomes very important for parents to teach children about cryptocurrency to make them aware of the new world of finance and technology. Cryptocurrency is not considered a legal currency and it is even banned in some countries, but many people believe that soon it will be properly regulated and considered a legitimate currency. Some countries like EL Salvador and the Central Republic of Africa have already declared Bitcoin a legal currency.

There is no minimum age limit to own cryptocurrencies. However, major crypto platforms like Binance will not let minors create their own accounts to purchase or trade cryptocurrency. Parents can buy cryptocurrencies for their children and keep them in their private wallets until they are of legal age. According to Jpmorganchase, the biggest number of crypto users are millennials (age 26-410). Most youngsters want to make a fortune out of crypto, and your children might be among them, so building a strong knowledge base about crypto might be beneficial for them in the future.

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Teaching Children about cryptocurrency

Learning about cryptocurrency may be difficult for even educated adults as it involves blockchain technology, cryptography, and decentralization. Teaching children about cryptocurrency might be another challenge. A scientific study suggests that it is a lot easier teaching children about something new than adults and it is usual to teach them with examples and analogies. Here we discuss some interactive methods you can use to explain cryptocurrency to your children.

Start with basics

While teaching kids about cryptocurrency, it is important to start with the basics. Tell them what money is, how it evolved, and explain that besides fiat currency, there are other currencies called cryptocurrencies. Show them how investing in stocks and bonds is different from investing in stocks and bonds.

Use analogies

Analogies are the best way to teach your children about cryptocurrency. Use analogies that your child can understand like telling them cryptocurrencies are like video game tokens. As tokens earned in the game can be used to purchase in-game items like armor, guns, etc., cryptocurrencies can be purchased, stored in a digital wallet, and converted to fiat world dollars. Similarly, you can tell them amusing stories to help them understand crypto. For this purpose, here is a story you can tell: Once upon a time, there was a boy named Jackson who loved to save his pocket money. He kept all his savings in a special piggy bank and enjoyed counting his money as it grew. But one day, a thief broke into Jackson's house and stole his piggy bank, leaving him heartbroken. From then on, Jackson was afraid to save money in any traditional safe or piggy bank, as he believed none of them could keep his savings secure. So Jackson decided to invent a special type of lock with a unique combination code that only he knew. The lock was so strong that even when a thief tried to guess the code, it couldn't be broken or tampered with. However, Jackson soon learned about Bitcoin and how it employed a similar security system to keep transactions safe and secure. In Bitcoin's security system, each transaction has a unique code that only the owner knows, just like the combination code of Jackson's lock. These transactions are added to a block, which is connected to the previous block, forming a secure chain of blocks known as the blockchain. This blockchain security system is so strong that it cannot be broken or tampered with, just like Jackson's lock. Therefore, just as Jackson's lock kept his savings safe and secure, Bitcoin's security system ensures that transactions are safe and secure too.

Play games and use real-life examples

Games can be an entertaining way of teaching children about cryptocurrency. There are a lot of online games that can help your child to increase his cryptocurrency knowledge. These video games simulate earning cryptocurrency by performing different tasks, purchasing and trading digital assets.

There are a lot of real-life examples you can use to help them understand cryptocurrency. For example, you can tell how a piggy bank is similar to a cryptocurrency digital wallet. Just as you store your money in a piggy bank, cryptocurrency can be stored in a digital wallet. The only difference is that cryptocurrency is not physical, and it is accessible from anywhere in the world.

Teach them how to buy cryptocurrency

Once you have explained what cryptocurrency is, it is time to teach your kids how to buy and trade cryptocurrency. You can instruct them either by using real-world examples or by playing computer games that simulate purchasing, trading, and making withdrawals into fiat currency.

Use visual aids

Once your children are familiar with the basic concepts, teach them about the graph and candles, about how the crypto price is fluctuating, and about how it will change in the future. Explain how you could lose your valuable money just by the movements of these virtual lines and candles.

Watch videos on YouTube

You can find a lot of videos on Youtube that explain cryptocurrency in a lot easier way through animations. Watching one of these videos can be helpful to make your child understand cryptocurrency, blockchain, and decentralization.

Blockchain is a digital lego

Teach your child how a lego game is similar to blockchain. In the lego game, we build blocks and by combining different blocks, we make buildings. Similarly, in cryptocurrency, each block represents a different transaction and these blocks collectively make a blockchain.

Encourage them to ask questions

Questions stimulate critical thinking and give you a better idea of how much your child is understanding what you are trying to teach. So when you are teaching about cryptocurrency, make sure your child is confident enough to ask questions.

Explain the risks

It is compulsory to explain all the risks associated with cryptocurrency. As crypto prices are highly volatile and keep fluctuating, it is better to make your child understand that crypto carries more risks of losing money than trading conventional stocks and bonds.

The Future of Cryptocurrency

Discuss the future of cryptocurrency and its potential effects on the world’s economy. Explain how it can change the way we do business and interact with money.

Conclusion

Given cryptocurrency's popularity, widespread adoption, and potential impact in the future, teaching your children about cryptocurrency and digital assets is necessary for their financial literacy.

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