- What is cryptocurrency?
- Why get kids interested in cryptocurrency?
- What can you do as parents?
- Frequently asked questions about cryptocurrency
Stories like that of the crypto kid, Erik Finman who invested $1,000 in Bitcoin back in 2011 and became a millionaire at 21 are not uncommon in the world of cryptocurrency. As a result, many kids are aspiring to get into the world of crypto and are asking their parents all sorts of questions about the asset class. 🤕
This article will also help you guide your kids better and answer some of their questions about cryptocurrency.
What is cryptocurrency? 🤔
If you’re going to be teaching your kids about cryptocurrencies, it’s vital that you first learn more about them yourself. Don’t worry, we’ve got you covered. 🤝
Cryptocurrency is digital money that is decentralized and is developed using blockchain technology. Most people are familiar with Bitcoin, the most popular cryptocurrency. Like fiat currency (regular money), Bitcoin can be used as a medium of exchange to buy goods and services.
Explaining Bitcoin to kids is challenging, there are over 5000 different cryptocurrencies in circulation after all! In addition, different crypto projects have different use cases.
As it’s a new and exciting asset class, there is a lot of hype around it, and many people have been able to earn generational wealth by investing in cryptocurrencies. 💰
Before investing yourself or on behalf of your kids, it’s vital to learn more about the subject.
Why get kids interested in cryptocurrency?
If you teach kids how to balance a checkbook, it won’t be long before they get bored and lose focus. But, try teaching them about financial literacy with terms like Bitcoin and cryptocurrency, and you’ve probably got their attention. Kids are becoming more and more interested in cryptocurrency because:
- Cryptocurrencies are the talk of the town; the fear of missing out is real.
- The idea of getting rich quickly is fascinating for kids.
- Kids are very tech-savvy and want to stay updated about every new technology and innovation.
What can you do as parents?
As parents, while you want to allow your kid to find their own path exploring new asset classes and technologies, it’s your responsibility to guide them in their journey.
Here’s what you can do:
👉 Talk to them about the technology
Teach your kid all about the technology behind cryptocurrencies, like blockchain. While there are certainly some downsides to too much exposure to technology, it is likely to continue playing an important role in your child’s life. Therefore, you should regularly discuss the scope of technology, how it might evolve, and how they can make the most out of it.
👉 Help your kid learn
Get your child excited about the history of cryptocurrencies and encourage them to learn more about the topic. You can even encourage them to learn how to code and program their application using blockchain technology.
👉 Teach them how to buy crypto
When they’re old enough, help your kid purchase their first cryptocurrency from a crypto exchange online. If things go well, maybe your child could be the next Erik Finman?
👉 Teach them how to save and invest
Encourage kids to save more and invest a part of their savings in cryptocurrencies. This will help them make a habit of investing and encourage good financial habits.
👉 Help them earn with crypto
By trading and mining cryptocurrencies, kids these days can earn a handsome amount of money. For instance, two 14- and 9-year-old siblings earned over $30,000 a month mining cryptocurrency. You can help your child do the same!
👉 Teach them how to leverage the power of social media
While the jury’s still out on whether it’s safe for kids to have a social media profile, using social media for educational purposes can be highly beneficial for them.
Frequently asked questions about cryptocurrency
Having understood cryptocurrencies a bit better, let’s take a look at some of the FAQs about cryptocurrency for kids.
❓ Can I open a crypto account for my child?
Buying and selling cryptocurrencies takes place on centralized exchanges that require a Know Your Customer Check (KYC). 📝 If your child is below 18 years of age, it might be the case that you cannot open an account for them.
However, you can open an account under your identity and allow your child to experiment with crypto under your guidance.
Moreover, you can also use decentralized exchanges that don't require any KYC. To buy and sell crypto on a decentralized exchange, all your child needs is an online wallet compatible with such exchanges. Metamask is the ideal crypto wallet for a young kid to start investing in crypto.
❓ Can kids invest in cryptocurrency?
Yes, kids can invest in cryptocurrency. But, before investing, they must learn more about cryptocurrencies and the technology that they're built on, i.e., blockchain.
This will ensure a better experience while investing in cryptocurrencies. However, it’s vital for you as a parent to protect them against online risks.
❓ What does cryptocurrency mean to kids?
For kids, cryptocurrency is something that is new, exciting, and something that is being talked about by everyone, everywhere. Also, many kids believe that investing in cryptocurrency can help them get rich quickly.
❓ Is crypto better than a savings account?
In most cases, kids won’t be investing large sums of money and they can afford to take more risks with their investment. So, crypto may be a better option than a savings account.
Moreover, kids can invest for the long term, and since crypto is still a new market, they can benefit from the growing acceptance and adoption of crypto worldwide.
However, if you prefer that your child invests in something less risky, encourage them to open a savings account. 🏦
❓ What percentage of savings should be in crypto?
The exact percentage depends on the investor's risk profile and financial objectives. Crypto is a new asset class that is considered a risky investment option, and thus, it's advised by many experts to play it safe and not to invest more than what you can afford to lose.
Cryptocurrencies and blockchain technology can potentially disrupt the way things are being done currently, and in the future, they will likely become mainstream.
You can prepare your kids for the future by teaching them more about these revolutionary concepts. One of the best ways to help them learn is through online courses. At GoStudent, we offer some of the best educational courses from great tutors worldwide. Visit our website to learn more.