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Ages 10+ · Money · Money and the world
What is crypto?
One keeper, onebig bookEveryone keepsa copyA payment istold to allThe manyoutvote the one
From one keeper to many copies.
The big ideaDigital coins are numbers in a notebook many keep together, and they carry real risks.

How it works

In Tallow Cove, Bram kept one big book of who owned what. One book can be smudged or lost, and everyone has to trust one keeper.

Dot's idea: everyone keeps a copy. Each payment is told to everyone, who write it down. When Cy changed only his own notebook, the other four outvoted him.

Digital coins work the same way, as numbers kept in many shared copies. To send coins, you show a secret key that only you hold.

They carry real risks: the value can swing, a lost key can lock coins for good, and a payment cannot be taken back. Nobody promises your coins come back.

Sweets for one coin024684Monday7Tuesday3Wednesdaysweets
One coin bought a different number of sweets each day.
How it works• Many copies of one notebook• A payment is told to everyone• Spending needs a secret keyA risk to know• The value can swing• A lost key can lock coins for good• A payment cannot be taken back
How it works, and a risk to know.

Example 1: A payment

  1. Ana has 10 coins and Ben has 8.
  2. Ana sends 3 coins to Ben.
  3. 10 − 3 = 7
  4. 8 + 3 = 11
  5. Everyone writes it down: Ana now has 7 and Ben has 11.

Example 2: A sneaky change

  1. Cy changes only his own notebook, from 6 to 60.
  2. The other 4 notebooks still say 6.
  3. Four notebooks agree and one does not, so Cy's 60 is ignored.

Example 3: A lost key

  1. Dot's key falls down a drain.
  2. Her 4 coins stay in every notebook.
  3. Nobody can send them, and there is no keeper to ask.

Example 4: The value swings

  1. Monday: one coin buys 4 sweets.
  2. Tuesday: one coin buys 7 sweets. Wednesday: 3 sweets.
  3. 7 − 3 = 4
  4. From Tuesday to Wednesday, one coin bought 4 fewer sweets.

Words to know

copy
A notebook of everyone's coins that each neighbor keeps.
keeper
The one person who decided in Bram's book.
secret key
What proves a payment is yours. Only you hold it.
value
What one coin buys, which can swing up and down.

Watch out

Try it

  1. Ben has 8 coins and Ana sends him 3. How many does Ben have?
  2. Cy's notebook says 60, but four others say 6. Whose number wins?
  3. Dot loses her key. Can a keeper give her coins back?
  4. Name one risk of digital coins.
Answers: 1. 11 · 2. The four that agree · 3. No · 4. The value can swing
Try at homeAsk a grown-up what they know about digital coins, and how they check a new thing before they trust it.
For grown-upsThis episode explains an idea and its risks and recommends nothing. If your child asks about real digital coins, look together at how a grown-up you trust checks a new thing before trusting it.
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