Gifting Cryptocurrency to Kids 🎁

I don’t know how to set up a trust, but I can buy Crypto

With crypto-currency constantly on the rise, it’s a pretty cool gift for kids this holiday season. You can afford an entire Litecoin without breaking the bank, but you can afford plenty of smaller coins with promise, like Cardano coins, and they’re not going anywhere but up! (or so I believe from the huge gains… anything is possible right?)

If you want to be the “cool” dad/uncle for the next 20 years, buy a small chunk of crypto for that kid today. If you had bought $100 of Bitcoin in 2011, you would have owned 100 bitcoins today, and you’d win the nicest gift ever!

In this blog post, I’ll show you the basics and help you gift epic crypto!

Safety First! — Understanding Crypto Gifts

Cold Storage

Crypto means no bank, and that means if it’s lost or stolen by any electronic means, it’s gone like cash. The safest way to keep crypto is called “cold storage”, and that means offline. People, viruses, and hackers know if they can steal any crypto electronically, you’re going to have no recourse option with law enforcement, so OFFLINE is a pretty great option, and it ensures the crypto won’t get wasted on ordering a pizza or something silly. My suggested way to handle this is in what the locals call a “paper wallet”. A paper wallet is a printed key or QR code that is used to access ownership of some kind of cryptocurrency.

You’re going to keep two copies of this paper wallet. One, you will gift to the lucky kid, and the other you will keep locked in your safe somewhere else. Short of a natural disaster, you can’t lose both copies. If one is lost or compromised, you can quickly use the other to empty the wallet before all is lost.

Stay away from using a USB stick drive. Not only will a jump drive eventually get accidentally copied or deleted (you know it will), but there’s no assurance it will even be a relevant device in the next 10yrs. I’ve still got floppy disks I can’t access, and I’m glad there’s not a small fortune of crypto sitting on them. Storing crypto electronically anywhere makes the gift mechanically fragile.

Treat the Crypto Key Like a Password

You can’t really show the secret part of the gift to anyone, it would be like showing someone where you write down your password. All it takes is a photo of your unencrypted “private key” and your money is gone.

more like how to lose bitcoin for Christmas

One TV host showed his private key on a show and immediately got it stolen. Though the person who took it did so to protect the TV host, it demonstrates that people think of crypto like a credit card rather than credit card numbers.

Remember: It’s appreciating, easy to steal, traceless cash! Never reveal the secret key.

You can encrypt your secret key, but it’s easiest to pretend there’s no password and keep everything as secret as you can.

Buying Crypto

This part is easy, but if it’s your first time it can also take around 8 business days. Let’s get you set up today.

Note: If you need your crypto in less than 8 days, you’ll have to find a person to buy from, which can be risky for the seller as well as you. Best plan ahead!

I highly recommend you go with buying crypto by setting up a Coinbase account. Once you have an account, you can simply transfer money from Credit or Bank into Bitcoin, Bitcoin Cash, Etherium, Litecoin, or Cardano. Sure there will be lots of security, but that’s more of a comfort than a headache.

This Coinbase link will start you off with a free $10 in Bitcoin

Buying crypto is quite easy!

I’ll be gifting my nieces and nephews 20 Cardano coins (ADA) each. You can easily buy Cardano on Coinbase, and I think Cardano will be around for a good while. On Thanksgiving 2020 Cardano was around 10 cents USD. I don’t know when you’re reading this, but I guarantee it’s worth a lot more today.

Creating a Paper Wallet

You can check the balance of any wallet you have the address for. However, you can’t access the funds of a wallet unless you know the secret.

So you can create a wallet like it’s a bank account, and then transfer some funds from your managed account to that newly created wallet. Keep the secret wallet recovery printed and hidden! Tadaaaaaaa! You’ve got a paper wallet, no account needed!

There are lots of websites out there for randomly generating wallets that you can then send crypto to. The first thing you’ll need to do is choose what kind of coin you’re going to gift! I recommend Litecoin if you’ve got the cash, and Cardano coin if you’re hoping to spend $25 bucks and get a huge return!

The BIG ONES: Bitcoin / Etherium / Litecoin Paper Wallets

The big hitters have some pretty impressive ways to share wallets.

There are services that will help you print or even sell you printed versions of paper wallets. If you want you can print or order wallets from sites like this: https://bitcoinpaperwallet.com/litecoin-paper-wallet-generator/index.php

You might want to include a fire-proof case with your paper wallet, or you could even buy a copper coin that has a visible wallet address with a private QR code to access the wallet hidden.

YES, these above solutions mean you have to trust the provider of the paper wallet. If anyone at the company is peeking at your private code, they can clear you out & kick their feet up on a beach with little or no recourse. Choose wisely.

If you’re worried about security on the crypto, you can use something like https://liteaddress.org/

Liteaddress.org is 100% open source, and you can pull down the code and run it locally with no network access to assure no spyware/plugins/viruses are grabbing the secret code. It depends on how much of a fanatic you are about security, and how much you trust your machine. There’s no centralized authority needed for you to make your own paper wallet.

Making a Cardano (ADA) Paper Wallet

Cardano is a third-generation crypto (fancy!) and it has quite a bit of promise. It’s also nice and cheap! (at the time of this article). Here’s how you can make some Cardano wallets in the hopes that they are worth more in a few years.

First, install the Yoroi chrome extension in Google Chrome. The extension has over 100k users. Once you have the extension installed, click on the extension to get started.

From the resulting screen, you want to create a wallet

Then choose Cardano and a paper wallet.

Next, you’ll choose how many wallets should be in this paper wallet. This usually should be set to “1”. I’m not sure why you’d have one paper with lots of wallets. Then you’ll add a password to the wallet. YOU MUST REMEMBER THIS PASSWORD! Otherwise, you’ll have some pretty sad kids. I just gave all the kids the same password since they all have different papers.

Once you’re done with those two tasks the account is created in an awesome foldable PDF wallet. This account is not associated with any service other than Cardano ADA coin. Go ahead and download the resulting PDF and start printing (two copies) so you can verify everything.

The Chrome extension then asks you to verify your recovery phrase. Don’t skip this step. This is a great step to make sure the PDF is printed legibly!

After the account has been verified you should see a screen like this:

Copy the paper wallet address and then you can send ADA coin to that address from wherever you have some ADA coin. I sent from my Coinbase account.

You can then verify the money is in the public address using Cardano explorer. You can check the balance of any public address. This is especially useful to see if they ever withdraw the funds or if you want to continue to send more ADA each year and show them.

Now you can take your backup of the coin secret and put it in your safe. This is a nice-to-have so if they lose the paper wallet, you have a backup.

I then fold up the paper wallet I will be gifting and put it in a nice envelope for presentation.

If you want to add that fancy “for-kids” touch, you can still buy metal challenge coins and coin display cases which give a more tangible feel to the gift. I found this is what the kids really liked most.

Conclusion

If you buy Bitcoin/Litecoin/Etherium/Cardano etc, it’s not hard. You can share this with your loved ones, and there’s a small chance you’ll hit a mini-jackpot by the time they get old enough to claim it. Isn’t that a better gamble than another unicorn or nerf gun? And who says you can’t buy both!?

The only person who can make no mistakes is the one who never takes a risk. Dream big, because it’s the most fun form of planning.

This is not investment advice. Talk to a qualified investment advisor before investing in cryptocurrencies.

Gant Laborde is a co-owner and Chief Innovation Officer at Infinite Red, published author, adjunct professor, worldwide public speaker, and mad scientist in training. Clap/follow/tweet or visit him at a conference.