Cypto is the way that the "young and modern" world is heading, so why hasn't the crypto market evolved for children yet?
As soon as you turn 18 years old you can officially apply for most Crypto Wallets. On a Crypto exchange this means you can leverage, trade, and LOOSE money. So I understand why you shouldn't really extend this to underage minors.
But my journey into, and my enjoyment of, Crypto has rubbed off on my 11 year old son who wants to understand more about it as well.
But don't kids have "normal" Bank Accounts?
Yes, and here is my point.
If you are allowed various types of savings bank accounts from the day you are born, and you can have your own debit card account from 11 years old, then why can't Crypto accounts be the same?
Touted in 2018 as a way to teach kids about digital money on the blockchain, Pigzbe was as startup / kickstarter project. It utilised the Wollo (WLO) currency. Could this be the way to go?
A quick internet search does not bring up any recent results. It looks like this never fully took off the ground, and certainly isn't going now. Maybe pigs can't fly after all.
As Crypto accounts are decentralised then there may be an issue around long term validity of any account set up with a company. But then again we have that same issue on the high street. Northern Rock (UK) is (was) a prime example!
How about Government backed wallets that are deposit only (or where withdrawing is only available to the parents)? At least you know that whatever altcoin is put into the wallet will still exist in 18 years time (as long as the altcoin still exists). You could also set up regular, or ad-hoc payments into the wallet. A bit like the Child Trust Fund scheme that the UK government run.
Or maybe a larger provider (Binance, Coinbase, etc) could provide "child" accounts where, dependant on their age, their account could be :
- deposit only (and put into APR yield pools where applicable)
- have the ability to convert to different altcoins only (like mini-trading)
- have withdrawal access to other wallets or bank accounts
- Full access provision when they turn 18
Hopefully as Crypto and tech progress and become the norm for payments in shops, we could also add crypto "debit" cards to this list for kids!
Yes, this is always an option, But you have to look after your own wallet. And in 18 years time you have to hope that you haven't lost your password and/or that the device the keys were stored on still works.
And who wants to be like the man who "threw" his Bitcoin into the bin. It's now in a tip in Newport and he has lost around £300m or more at today's prices. https://www.bbc.co.uk/news/uk-wales-55658942
You also have the hassle of everytime you want to add more Crypto you have to either create a new cold wallet (and have multiple wallets); or withdraw from the cold wallet, add more crypto to your hot wallet, and then create a new cold wallet.
This sounds like too much hassle for the normal person, family, or friends wanting to "top up" your youngsters savings.
Can't you just sign them up to an exchange or directly with an altcoin wallet?
You could. But most of these still say you must be over 18, even though they don't always ask for validation documents.
The danger here is that the account could be frozen and potentially any Crypto contained within it removed.
The chances are slim. They generally wouldn't want the bad PR. But who knows what legislation will crop up in the next 18 years that might force this to happen? Are you willing to take that chance?
Have you opened up a Crypto wallet or Crypto account for a child?
What did you do? Who did you do it with? How has it worked?
Please share your thoughts and experiences in the comments section. It would be lovely to hear from you.
Note : All of my articles are my own work and relate to my own personal experience. Investing is always at your own risk.