I have a family friend with two kids. When the kids were 1 I bought them shares of stock that were transferred into a UTMA for them, figuring they had enough toys and wouldn't remember another, and 20 years of appreciation would make this a really cool gift as they grew towards adulthood. This was a bigger hit with the kids as they grew than I expected (probably owing partly to their first gift being shares of TSLA that I bought for $35ish), and turned into a bit of a tradition.
I usually swing back and forth between high risk 'fun' stuff and lower risk 'investment' stocks. This is not just to give them big swings to be excited about, and possibly big gains to enjoy, but also to help them internalize the concept of risk and understand its role in investing (and why you can't just load up on high-risk stuff). This year is a high risk year, and I decided to buy them GBTC; a bitcoin trust.
Tesla was easy. They knew what a car was and could easily understand a car that doesn't need gas. Then it led into a fun conversation about tradeoffs (cost, can't fill up at a station, etc), environment, green energy, etc. This was helped by the fact that I followed Tesla from the start and understood their product and technology very well.
They're inquisitive kids. They will ask what this stock is, I'm sure.
Bitcoin is something I have a tentative grasp of, but I'm not going to pretend I understand it well, and it's always hard to explain something that your understanding is limited in. I also need to put this in terms that an 8 year old and an 10 year old will understand.
My first thought was to talk about the history of 'money'. Talk about how long ago people would often barter, and the problems with valuation and exchanges within groups. Then talk about how gold/food became a standardized medium of exchange in ancient civilizations owing their use-value to scarcity. Then talk about our modern fiat money and how it's backed not so much by an object of value anymore but by a promise from a governing body. Then lead into digital currencies.
This feels too verbose; we can certainly dive into things after they have a basic understanding but I think they need something more succinct to dig their teeth into at first. Also, I'm also not sure what the important differences are with cryptocurrency and what really gives it value. I understand some technical details, but I don't think they will be of much value in this sort of conversation.
I want to explain in as interesting and fun a way what Bitcoin is, while also communicating what important attributes make it different than traditional currencies, in a way easily digestible to a curious and intelligent 8/10 year old.