Cryptocurrencies are going mainstream, and the world’s younger generation, in particular, is taking notice. Cryptocurrency exchange Crypto.com recently predicted that cryptocurrency users worldwide could reach one billion by the end of 2022. Other findings show that Millennials – those between the ages of 26 and 41 – are turning to investing in digital assets to create wealth. For example, a study conducted in 2021 by the personal loan company Stilt discovered that, according to their user data, more than 94% of people who own cryptocurrencies were between 18 and 40 years old.
Keep children safe
While the rise in interest in cryptocurrencies is notable, some are raising concerns regarding the ways in which those under the age of 18 are interacting with digital assets. These challenges have been highlighted in UNICEF’s recent “Outlook for Children in 2022” report, which examines the impact that global trends may have on children, including concerns around the widespread adoption of cryptocurrency.
Melvin Breton Guerrero, a policy specialist at UNICEF’s Office for Global Vision and Policy, told Cointelegraph that he wrote the section of the report on digital currencies. According to Guerrero, this part of the document is very relevant because the cryptocurrency industry is still developing and therefore requires safeguards for children:
“We have to take steps to prevent harm to children that could be caused by third parties engaging in cryptocurrency or from self-inflicted harm. Therefore, we have to prepare children under the age of 18 for a future where cryptocurrencies and blockchain applications are going to be a part of everyday life, just like the internet.”
Although there are no official safeguards for children when accessing crypto and blockchain applications, Guerrero explained that one of the most important factors to consider is age verification. “We have to make sure that minors don’t mistakenly get involved with blockchain applications or misuse cryptocurrencies,” she remarked.
Given the anonymity of cryptocurrency transactions, Guerrero is aware that anyone can create and access a cryptocurrency wallet. He added that some online cryptocurrency exchanges do not question the age of their users. “A child can transact with multiple cryptocurrency wallets and nothing can be done,” Guerrero said.
Although there are technically no age restrictions when it comes to crypto, most major crypto exchanges have Know Your Customer (KYC) requirements to ensure users are 18 years of age or older. For example, the Coinbase website explicitly set that users must be over 18 years of age to access their services. However, before this policy was implemented in July 2017, Coinbase allowed users who were at least 13 years of age to access its services with parental consent.
It is also interesting to note that the United States-based cryptocurrency exchange Gemini offers custody accounts for minors. A company blog post published on January 25 explains that the new service is powered by EarlyBird, a Gemini Frontier Fund portfolio company, and allows parents to invest in their children’s financial future.
Caleb Frankel, co-founder and COO of EarlyBird, told Cointelegraph that the offering is focused on providing access to digital assets so parents can invest on behalf of their children:
“Each account is run by a parent or guardian over the age of 18. We believe crypto is part of a balanced modern portfolio and are prioritizing educating families and the next generation of investors as digital asset markets mature.” .”
Frankel added that EarlyBird is not only working with Gemini, but also proactively with regulators to ensure the development of a secure crypto ecosystem. As progress continues, Guerrero commented that it is important to ensure that new wallets are always created by someone of legal age. Although the children do not initially create the wallets, Guerrero believes that this is a solution to ensure that they use the cryptocurrency funds properly.
Unfortunately, other problems can also arise when children access cryptocurrencies. For example, in 2021 there was an increase in cryptocurrency scams, and children with no experience in the sector are likely to be more vulnerable. Larry Cameron, head of information security at the Anti-Human Trafficking Intelligence Initiative (ATII) – an organization focused on combating human trafficking by monitoring cryptocurrency transactions – told Cointelegraph that there are many risks Things to keep in mind when kids get into cryptocurrency:
“Namely, scams and fake platforms are risks for children. Online predators are adept at seeking out inexperienced people and exploiting them. Data breaches, identity theft, or fraud can be done on behalf of the child without the child knowing.” know. Children are also more likely to lose a private key, but this happens even to adults.”
For this reason, Cameron believes that the acquisition of digital assets will make children a target for criminals. “Until crypto exchanges collectively add more verification and authentication measures when opening an account, the privacy of children will be at risk. Ideally, anyone under the age of 18 would have to provide documentation from their parents as permission to open an account,” he remarked.
Is blockchain a double-edged sword?
In addition to concerns around cryptocurrencies, blockchain technology can also have unintended consequences for minors. For example, Guerrero explained that blockchain could be harmful to children because the information recorded is permanent and immutable, and this immutability could conflict with current regulations:
“The European Union’s ‘right to be forgotten’ appears in article 17 of the General Data Protection Regulation, or GDPR. This means that children who offer their information when they do not necessarily understand the consequences should have the right, when they are older than age, for that information to be deleted. But the blockchain, by definition, does not allow information to be deleted. So, how can we protect children’s data in this case?”
Additionally, Guerrero noted that while blockchain applications could help migrant children have a wearable identity to access goods and services, they could also be leveraged as a form of surveillance. Given these concerns, he stressed that there must be a balance when reaping the benefits of blockchain technology: “Having this balance is important, and the blockchain and cryptocurrency community should keep it in mind when creating new applications.”
Fortunately, some organizations are making progress on this front. For example, while UNICEF has recognized the challenges associated with digital currency adoption and children, the organization is aware that blockchain technology can be used for good.
Sunita Grote, venture team leader at the UNICEF Office of Innovation, told Cointelegraph that her office has been exploring the use of blockchain through its venture fund. “This fund provides seed funding to test open source solutions that have the potential to accelerate outcomes for children. Blockchain is one of the technology areas we are exploring,” she said.
Specifically, Grote believes that blockchain-based solutions enable organizations and individuals to rethink how they solve problems through greater transparency, system efficiency, and better coordination of data across multiple parties. With this in mind, Grote understands the potential that blockchain can have when it comes to responding to threats to children in the online environment. He shared that the UNICEF venture fund invested recently on two startups developing AI-powered open source solutions to tackle digital risks to children.
On the other hand, Grote also understands that blockchain could increase children’s risk of exposure and harm online: “Being online can magnify traditional threats and harm that many children already face offline and can further increase vulnerabilities with online risks also present.”
Petition to the blockchain community to protect children
Given the risks associated with cryptocurrencies and blockchain when it comes to minors, Guerrero mentioned that it is up to the blockchain and cryptocurrency community to help ensure the well-being of children in the future. “The blockchain and cryptocurrency community must use its deepest technical understanding to actively engage with the child rights community,” she remarked.
As a solution, Guerrero believes that blockchain applications should have KYC requirements built in. However, this may be easier said than done, as he also believes that KYC remains an open issue for cryptocurrency wallets and exchanges. Although KYC requirements can be challenging, Guerrero noted that having more educational tools will benefit the well-being of minors who are getting involved with cryptocurrencies and blockchain. This may be a more realistic solution for now, as several educational initiatives are already underway.
For example, in 2021, Gemini partnered with Learn & Earn, an app that teaches students about financial education while earning fiat rewards. In addition to exchange initiatives, some governments are taking it upon themselves to teach young people about cryptocurrencies. Last year, Columbia financed a mobile application, a board game and a book designed to educate youth about investing in cryptocurrencies and the stock market.
Other organizations are also developing other educational projects. Aaron Kahler, founder and CEO of ATII, told Cointelegraph that ATII is hosting regular child safety training sessions and conferences on how to keep minors safe when engaging with digital assets and blockchain applications: “We are going to host a summit on theme in May which will include a ‘dark webathon’ and a child safety day. We’re also bringing in people from law enforcement and other organizations to talk about child safety.”
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
