This is how parents should do it
My oldest son discovered his first loose tooth yesterday. He was ecstatic. It's another sign of another rite of passage. I hadn't seen him this excited since last year when we came back from three months in Japan and he flipped out because he could see the tops of the kitchen counters without a chair.
So my wife and I necessarily had to have the discussion re the tooth fairy. Like everything, this is a great opportunity for him to explore his world. I think Neil deGrasse Tyson nails it: