Explaining Bitcoin to Children (2024)

In many countries, including the Czech Republic (home of Trezor), Children’s Day is celebrated on 1 June. It is a day to bring awareness to the needs of children throughout the world and that should include their need for monetary education — an education that includes Bitcoin as well. So how do you explain Bitcoin to kids when so many adults don’t even understand it?

It’s definitely possible to explain Bitcoin if you take into consideration the varying levels of understanding for different ages, use age-appropriate language, and give concrete examples. Let’s go through a variety of ages and give you an idea of what you might expect.

Preschoolers

Children this age are naturally curious. Their favorite word is “why?” and their list of questions is neverending. At this age, by watching their parents, children understand that money can be exchanged for things that they want. Sometimes that happens with coins and notes, and sometimes they see digital payments made with a card.

How can you start to teach a young child that there is an alternative currency when they are still just learning how to count? Sure, you might not be able to explain much, but you can start. Children often “play store”, so why not bring it up then? When your child asks how you want to pay, instead of saying you want to pay with cash or a card, say you want to pay with bitcoin. This can lead to many questions that will start the conversation, like:

What is bitcoin? It’s a type of money.

Why not use regular money? I could, but this is another option.

What does it look like? Can I see it? No, you can’t see it or hold it because it exists on a computer.

Is it on a card? No, but it’s digital like a card. You can pay with an app on your phone.

Children learn at a young age how to use apps on a tablet or phone, so they will probably understand this concept faster and more easily than your retired parents!

They are too young to understand the reason why bitcoin exists, of course, or why you might choose to use it instead of fiat currency, but bringing bitcoin up now will make the concept very natural to them, and open up more complex conversations as they get older.

Preteens

Kids this age are digital natives and will have no problem understanding bitcoin. Everything is on a computer, so why not money? And because kids at this age have a strong interest in fairness, logic, and right and wrong, they will probably take to the idea of bitcoin very quickly.

What can you tell them about bitcoin? And how do you start the conversation? If you let them know that you own bitcoin or are using it to pay for something, they will naturally be curious and it can be a perfect lead-in to explain the basics like this:

Bitcoin is money that you don’t keep in a bank. Information about who has bitcoins is stored in multiple places on a computer network so everyone can verify the information. This makes the process fair and no one can claim to own bitcoins they don’t really have. Everyone all around the world can buy bitcoin and it is not tied to any country or region like regular money. You can buy anything with it and send it to anyone you want, without needing anyone’s permission.

This is probably enough information for most preteens. Knowing that bitcoin exists and that it is available to everyone will give them a step up and spark future interest.

Teenagers

Teenagers can easily understand Bitcoin philosophy. They also naturally have an interest in freedom, independence, and are trying to figure out where they fit in the world, so they might appreciate being included in conversations that many adults don’t even understand. And they are old enough to comprehend more complex terminology and technical details. So what can you tell a teenager about Bitcoin? Start in the same way you would for a preteen, but go more in-depth and use more complex language. They will understand!

Bitcoin is a digital currency. Unlike fiat currency (the currency used by countries), bitcoin does not have a central bank or organization controlling it. There is a fixed amount of bitcoin available, and its release is controlled by the blockchain process of mining: processing an algorithm, verifying transactions, and adding more blocks to the blockchain, a shared database on a decentralized peer to peer network. Bitcoin is available to everyone around the world and offers an alternative to fiat currency. The price of bitcoin is related to supply and demand. The amount of bitcoin available is related to the amount of work required to create it, not by the whim of a central bank who can create more money from nothing and cause inflation. Owning bitcoin gives financial independence and allows people to invest their money in a way that is less affected by global crises.

Obviously there is so much more to add, and our wiki can give you any additional help you might need in teaching your teenager about bitcoin. Who knows? By age 15, they might already know a lot.

It is never too early, or too late, to talk to your children about money — and Bitcoin. At every age, your conversation can be tailored to their level of understanding, and eventually, references to Bitcoin will expand, ultimately giving your children the gift of a path to economic independence and self-sovereignty.