Sunday Mornings with Rania: A Bit about Bitcoins

I remember the days when parents would systematically teach their children about the value of money. Teens would get a set of chores or maybe take on a first job and parents would discuss how money is exchanged, the need to save and how to spend wisely. Parents were in control and teens -  for the most part - followed suit.

It's astonishing how times have changed.

As the holiday season peaks, so do conversations around bitcoins, the online currency that your children are aware of and quite possibly already using to do things you are totally unaware... The philosophy around the bitcoin boom is that its users are anonymous and their transactions untraceable, something that both makes the currency desirable and dangerous. With that in mind, I thought it would be crucial to do a crash course with the hope that you follow this up with a conversation with the youth in your home.

What are Bitcoins?

Bitcoins are an electric currency or a cryptocurrency that lives online. This online currency (there are no physical coins) is currently worth billions of dollars. As of Dec. 11, 2017, bitcoins were trading at $17,183.34 per electronic coin. To date, there are 16.73 million bitcoins in circulation with a cap of no more than 21 million bitcoins available. This makes them very desirable to this growing online world (a world you and I are still figuring out but one our kids have grown up in.) In fact, bitcoins are hitting mainstream media and pop culture, even appearing in major TV sitcoms like Big Bang Theory.

Parents Beware - why do teens want them?

Because the bitcoin user is anonymous and their transactions are untraceable, teens love to be able to purchase online items through bitcoins. Not only will you never know but no one else will either. Add to that the sort of mining exercises or online digging that is required to gain or purchase bitcoins and these electronic gems become even more exciting to own. A recent survey (link is external) found that millennials have a greater interest in cryptocurrency than any other age group. It follows that their younger tech-savvy siblings will be just as curious.

But what can they purchase, you ask? A lot. Gambling sites and gaming sites love bitcoins. You can even make purchases through websites such as Overstock.com, Microsoft, Newegg, Expedia plus many others. Add to that the potential purchases through the "dark web" which opens the door to pornography and other unsavory purchases that are ideal for the bitcoin user... it doesn't take too much to see where the potential problems lie. Law enforcement is not too happy with bitcoins either and is working hard to meet digital criminality wherever it exists. 

So How Does a Teen Get Them? 

While technically one must be 18 to mine (literally dig online for...) bitcoins, there is no way to tell and no enforcement when minors purchase bitcoins. It follows then that teenagers use a variety of different platforms to gain hold of these online treasures, including:

  • eBay / Paypal: Teens can purchase small amounts of bitcoins on these sites but will pay dearly. Teens must be aware of sellers' ratings before paying cash for bitcoins.
  • Bitcoin ATMs: While you can find these in parts of Asia, some feel bitcoin ATMs are making their way to the United States. That said, the world is smaller to a teen who has many online connections. Teens must be aware of risks in sending cash to a foreign country with the hope of getting bitcoins in exchange.
  • Cryptocurrency exchanges exist like Localbitcoins.com: People buy and sell bitcoins peer-to-peer on these sites, transferring funds directly from bank accounts. Buyers and sellers also meet in person to exchange cash for bitcoins. Teens must be aware of fraud, theft and other crime risks when meeting anyone in person or when making online transfers.
  • Local cryptocurrency groups: One search on Facebook or Twitter will allow you to connect with many for crypto meetups in your area. Again, teens must be aware and extremely careful before meeting and trading cash for bitcoins with strangers they meet online. Also, teens must know how to authenticate the online currency before cash is given.
  • Paxful: These sites allow teens to trade gift cards for bitcoins.

Now What?

Have a real conversation with your kids. Ask why they would want to purchase and use cryptocurrency. Discuss the dangers when trying to acquire bitcoins. Remind them that technically, one must be 18+ to legally purchase and use the online currency. More than anything, let's encourage our kids to shy away from any operations that are secretive and remind them that because the bitcoin market is not regulated or tied to any banking system, the bitcoin market is volatile and unsecure. What you are holding today may not be worth the same tomorrow.

We are truly living in a new world and, as parents, we have a lot to keep up with. The online cryptocurrency world is a complicated one, but I assure you it's targeting your children and mine. We must be aware of what it is and the dangers it imposes.

About the author

Executive Director of Crime Stoppers of Houston