Cryptocurrency for Kids (and adults)

Strip away its digital aspect, and cryptocurrency transactions are monetized barter exchanges between two people. Or, you can think of cryptocurrency exchanges as one person deciding how much of a new kind of money he or she has and is willing to pay for an item or service. No paperwork is involved in what is essentially a secret transaction between two people.

    In a regular barter trade, a young person might try to find a student willing to trade a Pikachu card for one or more Pokemon cards. But in a cryptocurrency-like system, a young person offers to buy the Pikachu card with, let's say, some Monopoly money (or money students themselves design and distribute). A student is willing to sell the Pikachu card for a certain amount of Monopoly money, because she or he needs that amount of Monopoly money to buy a bag of chips from a student willing to accept that amount of Monopoly money. A student could, for example, use created currency to make a major trade, or a number of smaller trades, to receive items that could be sold, maybe at a yard sale, for a lot of real, government-issued money.

     Unless all Monopoly money is going to disappear from all Monopoly games, families, students, and classrooms need to begin designing their own currency and agreeing how much each person receives in his and her accounts. It can be lots of fun to begin listing the items that can be sold: candy and cookies; unusual pens and pencils; socks; hair accessories; little stuffed animals; friendship bracelets and key chains. Services also can be exchanged for new currencies. Students can be paid to teach others to make different types of paper airplanes, braid hair in a certain way, throw a football or Frisbee, solve a math problem, or fold an Origami crane. Around the home, parents and children might sell services for new currencies to buy privileges. Of course, it is unlikely that services, purchased with created currency, could be resold for real money.

     A do-it-yourself cryptocurrency system exposes some of the problems associated with cryptocurrency, such as Bitcoin, in the real world. You have to find another person who has what you want; who is willing to accept your particular kind of cryptocurrency (There is more than Bitcoin); who is willing to create no paper trail of the transaction; who will accept no changes, such as merchandise returns; and who wants to keep the transaction secret. Basing a subscription service on cryptocurrency is unlikely. Who would be wiling to hand over currency to receive a cupcake every moth or a weekly classroom newspaper, if they received no receipt showing they were entitled to the cupcakes or newspapers? Then, there is the problem of someone stealing your currency. In real life, cryptocurrency systems based on digital transactions currency has been known to disappear with the click of a key before a transaction is confirmed. Unlike savings held in a bank and protected by a government agency, cryptocurrency funds enjoy no such guarantee.

     Bitcoin cryptocurrency uses the SHA256 algorithm to confirm each transaction as part of a blockchain, to notify all participants in its network of each transaction, and to enable participants to keep track of the balances in each other's accounts. But, before a transaction is confirmed, it can be altered.