The terms "bitcoin" and "blockchain" have new relevancy in colleges and universities today. Some are offering courses in blockchain technology. Others are even investing in bitcoin in hopes for more lucrative returns in their endowment fund portfolios.
On the other hand, as of late November 2018, the value of bitcoin has slipped somewhat. According to a piece in The Verge, the value of one bitcoin dropped from an all-time high of about $20,000 to just over $3,900 "refreshing old doubts about the soundness of bitcoin as an investment value." Like the Stock Market, the bitcoin drop in value wiped at virtually all of its 2018 gains.
Experts feel that the drop is likely the result of the equivalent of Wall Street stock splits (known in the bitcoin world as "forks") as well as competition from emerging versions of cryptocurrency among closed, private network users. Whatever the cause and notwithstanding cryptocurrency volatility, universities are already establishing a cyber version of their own "school of mines." The "miners," however would be of the bitcoin genre.
To mine bitcoins, i.e., to earn bitcoin revenue based on maintaining and operating the blockchain network, you have to know the technology and possess the hardware. That technology is called blockchain. The hardware must be able to do complex math solutions and to verify vast strings of user identification codes. Then there are the other vastly complicated grouping and problem-solving iterations that group related transactions in a block.
To get a general idea of how the adoption of blockchain, bitcoin and other cryptocurrencies are making inroads, read this piece with the counterintuitive title, Why Bitcoin and Crypto Have No Future. The article actually lists about 40 positive reasons why bitcoin actually has a future, and how people with lots of money are betting on the technology.
Think of bitcoins on blockchain as a virtual spreadsheet duplicated many times across a computer network. A blockchain works when the network can accept regular, secure and authenticated updates and everyone at once sees the changes. So, blockchain technology has been labeled "the new internet." This layman’s explanation of how blockchain works is as good as any: Blockchain technology allows digital information "to be distributed but not copied." It was originally invented to protect bitcoin. Again, "the tech community is now finding other potential uses for the technology."
Bitcoin is the first among other the so-called cryptocurrencies playing a role in international financial transactions. Bitcoin worth relies on the consensual value generated by users in a variety of platforms and trading schemes. And blockchain technology is the basis of a deeper, more specialized internet. Blockchain Revolution authors Don and Alex Tapscott described blockchain as "an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value."
The bitcoin blockchain has no centralized authority. Bitcoin volunteer miners maintain the network through special computers designed to do the complex math that allows the transactions to occur. As the transactions occur, they are grouped into a "block," and sent through the network where the miners compete to validate the transactions and be first on the network to do so. The "winner" receives the reward in bitcoin.
That potential use in other technologies is part of what is driving the training of a new generation of blockchain programming gurus in higher education. Universities and colleges appear to be taking a two-pronged approach: First, they are offering courses in blockchain technology. Second, universities are increasingly making investments into the cryptocurrency fund. The latter trend may slow somewhat given the recent drop in bitcoin value. However, adding blockchain technology to the higher education curriculum is a huge vote of confidence in the potential for blockchain potential.
In fact, Cornell, Stanford, and MIT now offer courses on blockchain technology. For example, Cornell's Emin Gun Sirer, an associate professor of Computer Science, was scheduled to teach blockchain technology at Cornell University. Prof. Sirer was surprised to see 88 students in his class, especially since the course was designed for advanced-level Ph.D. candidates. Several undergraduate students enrolled, which indicated a rising level of interest in blockchain among younger students.
The traditional audience for blockchain technology and cryptocurrency has been the Wall Street banking entities and finance firms. Now universities are joining the fold. Sirer added, "We are not teaching people how to use today's blockchains - tomorrow's blockchains will look nothing like today's."
Keven Werbach of the University of Pennsylvania joined the cheering section and explained how blockchain technology courses are effective and supplementary to other areas of study. According to Werbach studying and understanding blockchain technology provides insight into other disciplines.
Werbach elaborated: "In order to understand blockchain well, you actually need to learn a bunch of subjects that we already teach in the university, things like economics and finance and law and distributed systems in engineering. I think someone who is taking a bunch of related courses because they're interested in blockchain is going to get a well-rounded education that is going to serve them well and be useful even if this industry falls apart."
Sirer agreed: "What you want to avoid at all costs is overspecialization early on in your career. If you end up going to a program, dedicated to blockchain, I think … you're making a mistake. The right thing to do is establish a broad, strong base."
Bitcoin notwithstanding, the most fertile areas for blockchain technology lie in finance. Transferring money outside borders (over $430 billion in 2015 alone) in this era of globalization will continue to generate the high demand for blockchain developers.
Likewise, blockchain promotes secure, shared ledgers, eliminates or reduces intermediate costs for transactions, and lowers the cost of doing business. Cutting out or reducing all those transaction and overhead costs and speeding up the transfer of money - be they dollars, euros, or bitcoins - are where profits and reinvestments live and thrive.
The Future of Bitcoin Investments by Institutions of Higher Education
Whether or not traditionally conservative universities will take the riskier road of investment in Bitcoin remains to be seen. The future most likely depends on how bitcoin commerce becomes more mainstream and institutionalized.
Can Gulec, co-founder of Kambo Finance, points to an intersection between the new asset class and traditional technologies: "As the connection between disruptive and traditional technologies gets stronger, the rate of change and increase in complexity becomes faster…. As institutionalization increases, so does regulation and governmental guidance which is all good news for end customers."
Blockchain and Cryptocurrencies are quickly becoming more than just revolutionary ideas and it’ll be fascinating to see how traditional colleges and universities continue to approach them. It seems that Higher Ed would be the best space to adopt these new methods on a mass level.