After some tiring and exhaustive weeks at work, I finally managed to negotiate a small 1-week vacation with my boss to break from duties, rest and recharge my batteries. I am not going to lie, I was anticipating this occasion to grab my family and spend a week in Lisbon, the city my good friends gave me amazing reviews of.

At first, everything was perfect, the flight to Portugal went smoothly, the weather in Lisbon was fantastic and we even managed to find a taxi driver with moderate consciousness, who charged us only 2x rather than 3x tariff to drive us to the city centre from the airport. Everything was too perfect to be true, so I knew life would find a way to trip me up at some point. The adventure began when I decided to use ATM to exchange USD for EURO. Probably this ATM was starving for a long time, otherwise, I can’t explain, why it decided to eat my credit card. And here we go, I am standing in the centre of Lisbon, on Friday evening with my major credit card being eaten.

<<I hope our AIRBNB hosts are accepting CRYPTO payments, otherwise we are in trouble>> - said I to my family.

<<**What is CRYPTO, papa?**>> - asked Alisa.

I knew I opened a Pandora box once again because if I didn’t not explain this concept to Alisa she will find a way, how to suck the life out of me and do it quickly in her trademark innocent but ferocious way.

What is crypto

<<Do you still remember what bank and credit cards is, Alisa?>> - I asked my daughter.

<<Yeah, kind if.>> - she replied.

<<Well, then you remember that you can get access to your money via cash, which you carry with you, or use a credit card to withdraw money or pay for products or services. The biggest problem of holding your money in a bank, however, is that you are dependent on your bank>>

<<I don’t understand, Dad>> - calmly said Alisa.

<<Look, we are in Lisbon, right? I have money in a bank, but ATM destroyed it. So, we are currently in a position when DESPITE HAVING MONEY under some conditions I CAN’T USE THEM. >> - said I.

<<I can’t order a new card, because it will take weeks for it to arrive in Portugal, and we need it now. I can’t go to the bank services, because it is Friday evening, and banks will open only on Monday next week. In other words, the BANK must ALLOW me to USE my MONEY. Otherwise, I can’t spend them.>>

<<Mmm, Ok, right now I see>> - replied Alisa with a sad tone.

<<So **Crypto is like digital version of the coins and notes you have in your piggy bank or a real bank**. But instead of being made of metal or paper, it's made up of computer code.>>

<<Linger on that, Dad!>> - I am not sure I fully get it.

<<Crypto is like storing your money in a bank, but instead of relying on a bank to make your money safe, you are doing it yourself. You can send, withdraw, or exchange your money without asking anyone but yourself for permission.

<<Ok, I think I get it>> - half-screamed Alisa with a smile on her face.

Why crypto is needed?

<< I got what is crypto, papa. But why do we need it? >> - Alisa continued challenging me.

<< First, as you have already understood you will be **independent from Bank** to spend/sent our money. Second, it is **much cheaper and faster to send money** between accounts or abroad, rather than using a bank! >> - I replied.

<<No way!>> - said Alisa with mistrust.

<<Remember Uncle Brain from California?>> - I asked my daughter.

<<Yeah, the one who bought me the best bubble gum-flavoured ice cream!>> - said Alisa with confidence.

<< About a year ago I sent him money, so it took an American bank 5 working days to process the money transfer to finally reject it at the end as being suspicious without disclosing exactly why. In addition, my German bank account charged me 15 euro for a bank transfer and another 10 euro to return my money back. In total, I paid 25 euro for my money NOT to be sent to your Uncle. >>

<<This is so unfair!!!!>> - this was one of the occasions when I heard tones of anger in Alisa’s voice.

<< I am of the same perspective, my sweetheart. Therefore, the next day I just sent him the money via crypto and he got the whole sum within a minute with almost no commission.>>

<<Wow, that is so cool!>> - said my daughter.

<<In addition, the nature of cryptocurrencies allows me to check the conditions of my actions via special conditions called smart contracts. This way I will not be dependent on the goodwill of other people/organizations.>>

<<I don’t get it, papa! Explain again!>> - screamed Alisa.

<< In super simple terms, while dealing with crypto **I don’t need to trust any party to perform its duties diligently, I can check it before paying anything**. It sounds like magic, doesn’t it?>>

<> - said Alisa. But I still was not sure, whether she understood it fully. The downside of crypto Alisa already looked a bit tired. It was obvious that understanding crypto took her much more energy to digest in comparison with doing so with other topics like banks or money. Nevertheless, I felt it was crucial to mention some of the drawbacks of crypto. <<Could you consider the drawbacks of crypto?>> - I asked Alisa. <<Not really, Dad!>> - she replied. <> - I said cryptically. <<Stop being a Sokrates or Aristotle, Dad!>> - said Alisa smiling. <<Ok-ok. The biggest problem of crypto is that once you lost control of your crypto wallet, you might lose them all and there is no one except you to support you. You get not only the full ability to use your money but also a responsibility to protect/keep them. With great power, comes great responsibility!>> <<Are you quoting Marvel, papa? You can’t fall lower than that!>> - replied Alisa laughing. << You might laugh, but people don’t like responsibility. As a result, some might prefer to make the banks take care of their money instead. In addition, not everyone is ready to accept crypto as a means of payment, which creates some liquidity problems with crypto as of now. I hope our AIRBNB hosts would accept my crypto payment, otherwise, we must find the hotels/hostels that will do. It might limit your options today, but quite soon it will change drastically. Believe me >> - said I with confident resonant voice. <<Thank you, dad! You are the best!>> - screamed Alisa and gave me a hug. Quick Summary To make sure Alisa will capture the basics of crypto in her mind, I opted her a quick summary. ·       Crypto is a digital version of the coins and notes you have in your piggy/real bank. ·       You don’t rely on your bank or other parties to access your funds, but you also carry the individual responsibility to protect and keep your money.   ·       Crypto is a fast, reliable and cheap way to transfer and spend your funds. ·       Today only a limited number of companies/services are ready to accept crypto as a direct means of payment. I was wondering, whether I also needed to explain Alisa what is a crypto scam or a rug-pull, but at some point I came to a conclusion that it would probably be too much for a small girl. More adventures soon come in new chapters. P.S. Special thanks for the ECO community. Alisa knows, that ECO is the future of finance, and so far she hasn’t asked me why :)

Alisa asks questions. Again

The previous time Alisa asked me about money, I went through some sweating effort trying to explain to her the function of money. A couple of rare peaceful weeks passed, since our previous moneyland adventure with my daughter. However, some regular Sunday morning my daughter asked me <<Dad, Marta’s father is working in a bank. **What is a bank, papa?**>> That was the moment, that somewhere in the deep of my soul I knew this time it will not be easier to describe to my little girl, what is a bank and the purpose of this organization. << Why are you not asking me about Barbies, pink Unicorns or a new album by Taylor Swift? Why bank, Alisa? Why? >>

I am not going to lie, it took me some time to paint a general roadmap, of how I would describe the banking system to my daughter, nonetheless, I decided to start with the basics. <<Alisa, imagine the bank as a giant piggy bank that you can trust to never break or lose your money, or almost never😊 – said I to my daughter.>> <<In addition, if you keep your money in a piggy bank for some lengthy time, a piggy will even slightly grow your money as a ‘’Thank you’’ to you.>>

Alisa was listening carefully. It took her some time to process the information. << Why do we need to keep our money in a piggy? Why can’t I just keep my money under my mattress? – asked Alisa>> I didn’t expect some kind of questions, so it took me some time to think it through. After some time, I replied: <<While that might seem like a good idea, there are a lot of problems with keeping your money at home. For one thing, your house might catch on fire or get flooded, and then you'll lose all your money. Plus, if someone does break into your house, they'll be able to take all your cash. So, it's a lot safer to keep your money in a bank.>>

Bank is also about convenience

<<Alisa, can you hold your piggy bank for a second?>> - I asked my daughter. <<Yeah, sure, papa.>> After some time Alisa replied: <<Dad, I can’t hold this piggy for a long time, it is too heavy>>. I smiled. <<That is another option of a bank. **Bank is not just about savings**. It is also about helping you to carry and spend your money in the most convenient fashion with the highest security. For instance, a credit or debit card gives the option to spend money from your piggy without the need to carry a piggy with you. Isn’t it cool?>>

<<Imagine another situation, Alisa. You are desperate to buy a new Barbie, Manga, or a kilo of your favourite Pistachio Ice Cream, but you don’t have enough money in your piggy today. However, tomorrow Dad will put 30$ in a Piggy Bank, so that you have a sufficient balance. The point is, you want, let’s say, the ice cream today, not tomorrow. The bank allows you to do it. A **bank can buy you a product via credit card today, while you can repay it later**. Isn’t it convenient, Alisa?>> Alisa though for a second and replied: <<Yeah, I agree Dad. Let’s order some ice cream.>>

<< Banks can even borrow or loan you some money, if you have a need or a basic idea. However, after some time you would need to give the money back to the bank plus pay a small ’’Thank you’’ fee for a bank.>> Alisa was a bit confused. The loan mechanics caused her some difficulties to digest it. << Let me provide you with an example. Next week there will be a football tournament at school. Is that correct?>> <<Yeah – answered Alisa.>> <<There will be quite a few parents, teachers and other kids in the tournament. Right?>> <<Yes, Dad.>>. <<If you prepare 20 litres of lemonade, you would easily manage to sell it and earn some money>>. <<Most probably, yeah, I agree papa.>> <<The trick is in order to produce lemonade, you need some money to buy lemons, sugar and other ingredients. You need the money, which you don’t have. **The bank can borrow you that money** or give you a loan in other words. Once you sell the lemonade, you can pay the bank back its loan>> That example was seemingly tiring for Alisa, however, she digested it.

Million dollar ice-cream idea

<<I have an idea, papa. If banks have so-so-so much money, why can’t we just go there and take as much money as we need?>> For a split second I was puzzled. <<Do you plan a robbery, my little fox?>> This time Alisa as if nothing had happened started laughing and answered.<<Yeah, why not?>> That escalated quickly 😊

<<**Breaking into a bank is almost impossible,** Alisa. For two of us, this task is simply unreachable. Bank has really strong security systems, a vault and even some of them could use ink dye packs that explode if a robber tries to steal money from a bank. The dye makes the money unusable and easier to track down. Some banks even use your biometrics to verify a customer's identity and access. This means that they use fingerprints or facial recognition to make sure that no one except you can access your banking space.>> I continued. <<I like your courage, daughter. But you must redirect your energy in a different way.>> <<Yeah, I know papa. I was wondering how much ice cream I could buy for one million $$$...>>

Quick Summary

The tricky questions of Alisa made me sweat once again, however so far so good I am still capable of holding her gust at bay. I quickly reminded her of the main functions of a bank, so she can settle everything down in her head. Those functions are:

·        keep your money safe: banks keep your money in a safe place, so you don't have to worry about losing it or someone else taking it.

·        help you spend your money: banks can supply you with credit/debit cards, which is easier and safer than carrying around a lot of cash.

·        save our money: banks could pay you interest or as I call it a small ‘’Thank you’’ for keeping your money with them.

·        borrow money: banks can borrow you money, which you have to pay back over time.

I decided to park the explanation of banking financial derivatives and the role of banks in a federal reserve system till a later time. I hope Alisa will never ask me about Jerome Powell.

More adventures soon come in new chapters.

P.S. Special thanks for the ECO community. Alisa knows, that ECO is the future of finance, and so far she hasn’t asked me why :)

Houston, we have a problem!

There were no signs, that a common shopping mall stopover together with Alisa, my 6-year-old daughter, would result in so many creative headaches, that it is hard to imagine. We agreed with Alisa, that if she made her bed over the course of 2 weeks, I would buy her any toy she wants, at a ’’REASONABLE’’ price. She instantly agreed without even asking what this strange word ’’REASONABLE’’ means. To my biggest surprise, she somehow managed to cope with the challenge, and here we go, I found myself in the middle of the toy shop surrounded by multiple barbies, pink ponies and other fluffy toys. And so, the problems began.

At first, Alisa brought 5 different barbies to me and said: <<Dad, I need them all! They are so cute>>. I explained to her, that I could buy only 1 of them, thus she must choose wisely. Alisa looked at me and nodded, but it was written in her eyes, that she did not understand why I just can’t buy all of the barbies.

A minute later my daughter returned holding the latest high-tech doll robot, which cost 300$. I knew it was coming, therefore I reminded her that the toy must be at a REASONABLE price. I quickly realized, that explaining the boundaries of the word <> to a six-year-old girl seemed problematic. That is why I just opened my wallet and showed Alisa a 50$ note saying that any toy at 50$ or below would be a reasonable price for a toy. Such budget limitations caused little joy on Alisa’s face, however, she reluctantly agreed. Soon she came back with a yellow-blue teddy bear worth 45$, we bought it and came home. Once I came home from work the next day, I saw Alisa enthusiastically cutting something out with the scissors near our home printer. Once I came closer, I couldn’t believe my eyes. Alisa was cutting out freshly printed 50$ notes saying: <<Dad, I printed many-many money, so now we can buy all the toys I need.>> That was when I realised that my daughter could be drawn into big trouble if I did not explain the role of money to her. What is money or Chupa Chups barometer? I decided to start with the basics and illustrate to Alisa, what is money. I took two bananas and asked my daughter, whether I could buy Alisa’s white toy pony for that amount. Despite Alisa rarely playing with the pony, she refused to sell it to me for such a low <>. I decided to increase the bid, this time I proposed two Chupa Chups for the pony. Alisa was at a crossroads, I saw she was seriously considering the offer. Nevertheless, after some time she still refused. Nonetheless, it was evident, that Chupa Chups was a valuable asset in her eyes. She rated it much higher than bananas. For experiment purposes, I went all in and proposed 5 Chupa Chups for a pony. My daughter gladly accepted the offer. This is how I discovered that Alisa could perceive the value of things in Chupa Chups. This is an asset that she is willing to accept in exchange for a favour, good behaviour or anything else valuable. The more Alisa value something, the more Chupa Chups must be offered to make a deal with her. For example, going to bed early 3 days in a row equals one Chupa Chups, eating all vegetables is half Chupa Chups, etc. However, some things remain priceless. For instance, she will not give up her favourite Husky Toy for any amount of Chupa Chups, even for a million. So, what is money?* *In simple terms, money is the amount of Chupa Chups I am willing to offer and Alisa is willing to accept a product, service or a combination of both. Money Scarcity or why can’t we home-print money (unfortunately) Once I explained the concept of money through Chupa Chups to Alisa, the next task was to make her understand, why it is quite dangerous just to print money. One day we agreed with Alisa, that she would get 3 Chupa Chups for not playing any games on her mobile device. Despite it being a harsh challenge for her, through her natural willpower (she got it probably from her mother) Alisa managed to somehow cope with it successfully. Once payday arrived, I replaced 1 Chupa Chups with a local analogue, which looks at first glance quite similar to the original Chupa Chups. Alisa didn’t spot the difference and happily accepted all the Lollipops. But the idyll was short-lived. Quite soon Alisa realized, that one of the Lollipops was not the original Chupa Chups, and she became absolutely furious. She was screaming, crying and demanding a refund since I committed fraud. Off course, I admitted the mistake and gave Alisa a Chupa Chups in exchange for a fake one. << Probably cashiers in the toy shop by getting fake 50$ notes would be as furious as you with fake Chupa Chups. Right? >> — I asked Alisa. << Probably, Dad. Now, I understand >> — replied my daughter. Money could be the efficient medium of exchange only until it is scarce and difficult to obtain. Otherwise, like with the money printing at a home example, the value of money is diluted, and money could no longer effectively perform its main functions. Furthermore, such manipulation is a fraud, which may lead to a significant punishment.  Actually, kids can open a bank account. It is a piggy bank. I was happy, that Alisa gained an understanding of what money is and in how scarce it is. Nonetheless, there was a big part of the jigsaw still missing — dealing with money in practice. As a father, I believe that the most productive form of learning is putting it through practical activities. Consequently, I asked myself, how could I involve Alisa in dealing with money, so that she could establish her own learnings and experiences? After some consideration, I found the solution. Alisa must open a bank account. Yes, a bank account. A piggy bank account. Such an approach kills not two, but dozens of birds with one stone. First, it GameFies the whole process, which makes it much more fun to digest. Second, it encourages kids to save, store and somehow find all the coins in the house (I did not expect there was a fortune in our couch). Finally, we agreed with Alisa that she will write down all the coins and notes she put in a piggy bank so that there will be a bookkeeping and visual representation of her bank balance. Since a piggy bank must have a purpose, I asked Alisa, what did she want to buy with the saved money? << Naruto Roller Skates>> — she replied almost instantly. Those Roller Skates cost 60$ ( with a 50% discount), thus we make a deal with Alisa: once she will reach the 30$ amount in the Piggy Bank, I would add the remaining ones, so that she could purchase her favourite roller skates. I knew the skates were a great motivator for Alisa to make her think, plan and take care of money. The next day Alisa even asked my wife to borrow her 30$’’for a couple of days’’. I did not see that shortcut coming, however, I managed to identify this market manipulation quite early. End of Chapter 1. If you are here, you managed to read this first chapter of my fascinating adventures with Alisa on the topic of << MONEY>>. Despite we managed to clarify quite a few fundamental money questions: 1️⃣ What is money? 2️⃣ What is the main function of money? 3️⃣ Why can’t we just print money (some members of the federal reserve would disagree) 4️⃣ How could kids open their own bank accounts? (hello piggy 🐖) 5️⃣ The importance of money planning and accounting. There are still tons of questions that remain unanswered. What has been the evolution of money and why today we use paper & digital money? How to manage money wisely? How not to lose all the money? … etc. All that and much more you could read in the upcoming chapters of my money adventures with Alisa! Soon to come! 🔜💰✨