Cryptocurrencies are high on the agenda for many investors in the modern age. And despite price drops in recent years exposing the volatility of these assets, the market cap of bitcoin alone currently stands at almost $140,000,000,000 US dollars – meaning that there is still plenty of interest in the crypto sphere. As children grow up to become the next generation of investors, though, how can you ensure that they have the skills to become wise crypto investors themselves?
Play a game
Depending on the age of the child, role play is likely to be the first step in introducing them to the idea of cryptocurrencies. Using actual coins, such as cents and nickels, is a useful way to begin to explain the system. Role-playing transactional environments such as shops is a good place to start. Assuming that they are familiar with basic technology such as tablet computers, you can then move into explaining that cryptocurrencies do not exist in physical, tangible forms like these coins in front of them do. It’s enough at this stage to explain that coins live inside the screen, and that they are registered on a special list called a ledger.
Cryptocurrencies are decentralised, and their relatively simple nature leads to a diverse range of coins – many of which have been designed and developed by individuals looking to make a name for themselves through innovative, trend-setting creations. For that reason, there are lots of child-friendly coins out there. Take the example of Dogecoin: this Japanese coin is a fully fledged peer to peer cryptocurrency, but it also has a recognisable canine as its symbol. This sort of coin is an excellent place to start, as it offers frames of reference which are suitable for children.
A test investment
Investing some cash in crypto on behalf of an older child is a suitable way to expose them to the basics of crypto investments, and money-related digital tools for children can help. Your child can be involved in the process by doing some research into the coins they like the look of, although anti-money laundering and know your customer rules may well end up meaning that you, or another responsible adult, will need to do the purchasing, as adult-level identification could be required. If the child is still too young to be involved in the decision-making process, meanwhile, it may be worth investing on their behalf. In five, ten or even fifteen years’ time, as they mature, you’ll be able to show them how the investment you made for them has grown and evolved over the years – and why that has occurred.
It’s never too early to start encouraging a child to enter the crypto sphere. Devising a game, creating a test investment or showing them the fun side of investing are all useful ways to help children get on to the crypto ladder.