Bitcoins and blockchains are the new buzzwords in today’s fintech world and no finance student should be oblivious to them. Blockchain is the new underlying technology to bitcoin and various other alternative currencies and has landscape changing, alternative uses. It has become essential to know atleast working understanding of these areas and be able to relate to different functions in finance. As estimated by PwC on a report on blockchains, the insurance industry can save between US$5 billion and $10 billion.
Bitcoin and Blockchain
Crytocurrencies are riding the wave of curiosity and novelty and seeking to make hay in this shining sun, many altcoins (alternative currencies) such as Litecoin, Ethereum, Zcash and few others have made a splash. There are over 865 types of Cryptocurrencies, 224 assets across 5329 markets already. Let’s explore the various crytocurrencies and how they differ from each other so that when you are looking at your next buy, you can make an informed decision. Each of them will have different uses, fungibility, liquidity risks involved that should be kept in mind while purchasing or accepting them.
The first digital currency and payment system based on mathematical logical reasoning such that there can be only twenty one million bitcoins as per that reasoning. Which is why this becomes even more interesting as an asset as well. From being used to pay for online gaming and purchase of illegal drugs, the currency has come a long way to being respected as a dependable currency such as its maximum trading happens out of Japan and China is rumoured to be the largest miner of the currency. Merchants accepting bitcoins pay a fees less than the regular 2 percent of a credit card. It has become reliable as an alternate asset to store value, like the Cypriot Financial Crisis on 2012-13 when people feared their savings to be confiscated. Like a Coinbase estimation which said that $10,000 worth of bitcoins invested 7 years ago would be worth $500 million today. This and the increasing price of Bitcoin which is hovering above $4363 levels gives a major confidence to investors.
It’s distributed ledger which can be used safely thanks to its cryptography protected network, smart minds have come up various applications of this technology. The blockchain ledger, open to all, operable by authorized parties will help create a transparency in the operational maintenance as any changes done on one node are visible to others across the chain. This makes it fraud and hack proof and can become a coveted manner of operations that will automatically meet the standards of quality and checks as required by central banks.
Embracing by the Financial Industry
J.P. Morgan has tied up with Digital Asset Holdings to look into the “liquidity mismatch” problem using blockchain. In 2016, it aimed at investing $9 billion in new technologies including blockchain, big data and robotics.
Big banks like Goldman Sachs, J.P. Morgan, and few others came together in 2015 to form a collaborative approach on blockchain called R3. However, as recently as May, 2017, Goldman and Santander walked out of this consortium and Intel, Bank of America Merrill Lynch, HSBC and dozen others have jumped into the fray. There are about 40 investors in the fray and have collectively raised about $107 million for R3 which is a group developing blockchain technologies for financial companies. This is part of the first two tranches of funding for R3 and the third round will be raised later this year. The first tier investment was open to all, the second round was funding with governance rights and responsibilities of sitting on certain committees for future decision making. The third tier will be for investors putting in large sums looking for a board seat.
Job Prospects in Blockchain and Cryptocurrency
Blockchain development and applications are the new areas of career orientation due to its wide ranging use in finance to retail. From using it to track food supplies, processing financial transactions, tracking shipments, recording data, it will be applicable everywhere. New innovations are expected to rise multiple folds in few years’ time. As of now technology and finance are the main job providers. Programming skills along with cryptography are the basic skills required to learn these. As per IBM, the best blockchain engineers can earn a salary above $250,000 per annum.
Top BSchools for Bitcoin and Blockchain
From classroom to online, blockchain and crytocurrency related courses are being offered across universities.
- New York University (NYU) started its course in 2014 “The Law and Business of Bitcoin and Other Cryptocurrencies.” The course deals with bitcoins and alterative payments mechanisms. NYU also offers “Digital Currency: Revolution in Money and Payments?” as an introductory course to digital currencies and emerging mobile payments. The second program is a short duration course with a tuition fees of $3,800.
- Duke University , NC, US has also been offering “Innovation, Disruption and Cryptoventures” which understands disruptive technology, explore bitcoins and tries to address the implications of future business.
- University of California, Berkeley’s Haas School of Business has been exploring the need to include crowd-funding, payments, and currencies in its MBA course.
- MIT has started offering a course called “Fintech Ventures”.
- Princeton University is offering an online course called “Bitcoin and Cryptocurrency Technologies.”
- Similarly Stanford University is offering “Bitcoin Engineering” which is a seven months course on bitcoin enabled applications. It is focused on teaching how to rewire internet services on the basis of bitcoins and requires prior knowledge of Python with a Unix environment.
There is no dearth of courses across universities. Choosing course with a good exposure of theory and practical working introduction is necessary to be well-equipped to be useful to your future employer. Technology is going to form a large of part of these courses and anyone taking these ill have to be ready to understand and grasp few concepts for a working knowledge of crypto-world. After all, technology has been running the world since the 20th century.