5 min read
a child's hand holding bitcoin cryptocurrency

The days of discussing how children can best save their paper route money have now been replaced with conversations about cryptocurrency and youth debit cards. Money conversations are being had by parents and caregivers who straddle generations and, themselves, are adapting to the ever-changing ways in which money is valued around the world. While the face of currency is changing, many of the fundamental tenets comprising good financial stewardship have not. Knowing how and when to start money conversations with kids can be difficult. Here are a few helpful tips on the cryptocurrency topic.

Start with the Basics

To begin by explaining what cryptocurrency is, and how it works you must first explain currency. Use simple language and examples to make it easier for children to understand.

Explain to children that currency is a type of money that people use to buy things they want or need. Just as children use allowance to buy a toy or a snack, adults use currency to buy things like groceries, clothes, and toys for their kids. The most common forms of currency are coins and bills. In the United States, the currency is called the U.S. dollar. Show children the different types of U.S. currency (like a penny, nickel, dime, quarter, $1, $5, $20 bill, etc.). Other countries have different types of currency, like the Euro in Europe.

Cryptocurrency is a type of digital currency. Cryptocurrency is similar to more familiar currency like dollars or coins, but crypto doesn’t have a physical form like coins or bills that you can hold in your hand. Instead, it is created and managed using advanced computer technology.

Cryptocurrency is stored in a secure online database called a blockchain. Blockchain is a way of storing information in a secure, decentralized way. Everyone who uses it has a copy of the information and can verify that it hasn’t been tampered with.

People buy cryptocurrency is as a form of investing. To make an investment means to put money into something and hope that the thing will make you more money in the future. It is a way to put money to work so that it makes more money for you. Explain that investing is like planting a seed and watching it grow into a flower or tree over time.

Use Analogies and Examples

Analogies can help children understand complex concepts in a more relatable way. Cryptocurrency can be explained as a digital piggy bank. Similar to putting physical coins or dollars in a piggy bank, you put digital coins in a digital wallet. When you want to buy cryptocurrency, you need to use real money to purchase the cryptocurrency from an exchange or other marketplace. Then you can store cryptocurrency in a digital wallet that you can access from a computer or smartphone.

Explain that cryptocurrencies are decentralized. This means that—unlike the money put in a bank—cryptocurrency is not controlled by any one person or institution. Instead, the blockchain keeps an ongoing record of a transaction made with that particular cryptocurrency. Blockchain uses computers all over the world to verify the transactions. This international checks and balances make cryptocurrency secure and transparent. However, risks still exist.

To explain blockchain to children, have them imagine playing a game of Jenga, where you stack blocks on top of each other until the tower becomes unstable and falls over. Tell the child to imagine that every time someone places a block on the tower, they write down what they did on a piece of paper and pass the paper around to everyone as they play the game. The piece of paper is like a block in the blockchain.

In a blockchain, each block contains a record of a transaction or piece of information, just like the piece of paper in our Jenga game. Once a block is added to the blockchain, it can’t be changed or removed, just like you can’t take a block out of the Jenga tower once it’s been placed. The blocks in a blockchain are connected to each other, forming a chain, just like the blocks in our Jenga tower are stacked on top of each other. This makes the blockchain very secure. If someone tries to change a transaction or piece of information in one block, they will have to change every block that came after it in the chain, which is nearly impossible.

To explain investing you can play board games with children. There are several popular board games that teach investing concepts, like Monopoly, or Roblox Economy. Games can be a great way to introduce children to the concept of investing in an economy. In Monopoly, players get a grasp of property investment by buying and selling properties, collecting renting, and investing in upgrades to their properties to increase their value. The popular online game Roblox has a feature called “Roblox Economy” that allows players to buy and sell virtual items using virtual currency. By playing games with children, you can help them visualize complex concepts like investing more easily.

Emphasize the Risks

It’s important to make children aware of the risks associated with cryptocurrencies, such as volatility. The value of cryptocurrency is volatile, it can change quickly and unpredictably. Volatility means that something is changing a lot and is hard to predict. To explain volatility to a child have them imagine a toy that they really like. Tell them to imagine a toy that used to like a lot but have gotten bored of it and now they play with the newer toy more often now. The value of the toys changes over time based on their interest in the toy. So, the value is not predictable.

Just like how their interest in the toy can make its’ value to them unpredictable, there are many factors that can affect the value of cryptocurrency. Some things that can cause value to change are news about a new technology, the economy, or change in the demand (those interested) or supply (the number) of cryptocurrency.

Explain that while cryptocurrency can be exciting, its volatility can make it a risky way to spend money. It’s important to be cautious and do research before buying cryptocurrency.

Teach Them to be Responsible

If a child expresses an interest in investing in cryptocurrency, teach them the importance of being responsible with their money. Here are a few investing tips to ensure are followed:

  • Start with smaller dollar amounts. You can choose to increase contribution amounts has they become more experienced. Explain that they should never invest more than they can afford to lose.
  • Research cryptocurrency with children before making any investment decisions. Search reputable sources of information, like official company websites, industry publications, and trusted news outlets. Look for information about whitepapers, news, and developments. Also track the price movement of the option before buying.
  • Diversify investments. Just like the saying goes “Don’t put all your eggs in one bucket,” teach children the importance of buying several different investments rather than just one.
  • Monitor child’s activity and interactions in the cryptocurrency market to ensure they are investing in diverse options and aren’t investing more money than they can afford.

Age-Appropriate Cryptocurrency Resources

Books are additional resources to consider. Some books appropriate for children include: 

  • What is Cryptocurrency? A Simple Guide for Kids” by Kasey Tam
  • “A Kid’s Guide to Bitcoin and Cryptocurrency” by Chris Stead
  • “The ABCs of Bitcoin: What Kids Need to Know” by Elizabeth Kelly
  • “The Story of Bitcoin” by CNBC


Overall, cryptocurrency is an intriguing new technology that has the potential to revolutionize the way we exchange currency and invest. Digital currency like many developing technologies will continue to change the way the world interacts with money. Children can learn to be aware of currency and ways of financial exchange. However, it’s important to remember that cryptocurrency is still a relatively new and complex technology, and it’s important to approach it with caution.