What Students Should Know About Cryptocurrencies

If you haven’t heard about Bitcoin and other cryptocurrencies yet, odds are you’ve been living in an underground bunker. Why? Because buzz about the rise and rise and rise (and occasional fall) of digital cash is everywhere you turn these days with a variety of experts and insiders weighing in on the trend, how high it will climb, and if/when the bubble will burst.

However, while most people have heard of cryptocurrency and Bitcoin by now, many of them have no idea what it’s all about. Here’s a closer look at all things Bitcoin, along with what the cryptocurrency craze may mean for students.

The 411 on Cryptocurrencies

According to Wealth Daily, “Cryptocurrencies are a form of currency, similar to the Euro or U.S. dollar, but they are created and used digitally. They can be used to make purchases at retailers, websites, and businesses that accept the cryptocurrencies you use.”

Created in 2008 by Satoshi Nakamoto, bitcoin was the first cryptocurrency and has become the world’s most widely used digital currency. It experienced a massive price increase in 2017 with many early investors becoming millionaires and some insiders predicting that it's at the mere beginning of a meteoric rise.

At the same time, other experts have warned of its volatility -- a reality underscored earlier this week by a fall in the price of bitcoin following the news that South Korea is considering banning all cryptocurrency trading. Billionaire investor Warren Buffett, for example, has declared, “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending.”

All of which begs the question: What’s the big deal about Bitcoin anyway? Explains technology research and analysis firm Gigaom, “Users get to send money anywhere in the world for minimal fees, and to protect that money from the political considerations that influence central banks.”

Three Things to Know About Cryptocurrencies

A lot has been written about cryptocurrencies, but by all accounts we’re still in the early pages of the book -- and no one knows the ending yet. So what do you need to know at this point about the phenomenon? Start with these three pieces of information.

1. Bitcoin is still an experiment.

Bitcoin started with the publication of a proof of concept by the pseudonymous Nakamoto. When he left the project, others developers continued where he left off. Wrote Deep Code editor Jordan Greenhall in Medium, “Bitcoin is a self-organizing collective intelligence. As such, what it becomes is entirely a function of what it can do — that is, it is a function of the capacity of its collective intelligence to overcome the challenges that it encounters in its environment.”

In other words, we are still learning what Bitcoin -- and cryptocurrencies at large -- are capable of doing.

2. Cryptocurrencies are creating new jobs.

The cryptocurrency explosion has led to an explosion of new jobs. Says Forbes, “From crypto startups to established companies, the job market has never looked so good for blockchain enthusiasts.”

And these opportunities aren’t limited to the tech sphere. Continues Forbes, “Some of the companies searching for these skills may surprise you. Uber, eBay, Capital One, Match.com, and GEICO number among the ranks of companies that have searched for and/or contacted candidates who have listed "bitcoin" or "blockchain" in their skillset. Whether this indicates that more widespread adoption of cryptocurrency is on its way or not remains to be seen--but the interest is certainly there.”

And even if Bitcoin doesn’t survive the emergence of the next generation of cryptocurrencies, experts say digital currency is here to stay, and may even eventually replace hard currency (albeit not in the near future). For those looking for secure, sought-after and exciting work on the cutting edge of cryptocurrency, studies in this area, along with an understanding of blockchain, the technology that drives it, will give you an invaluable inside edge.

3. Some students are choosing Bitcoin over a degree, but this comes with significant risk.

Business Insider tells the tale of Erik Finman, who invested a $1,000 gift from his grandmother at age 12 into $1,000 worth of Bitcoin. Three years later, Finman made a deal with his parents: He’d drop out of high school and sell his now-$100,000 worth of bitcoin to start an edtech company; If he wasn’t a millionaire by the age of 18, he’d give up on the plan and go to college. It’s a long story with much more to it than that, but you can guess how it ends: As of June of 2017 when bitcoin’s value reached $4,300, Finman’s net worth was around $1.7 million. And with its value upwards of $10,000 now, let’s just say Finman is a very, very rich man.

According to a report from Forbes, meanwhile, many contemporary college students are now opting out of college in the hopes of striking it richer (and quicker) in cryptocurrency. Said one college student-turned-bitcoin trader, “I’m not opposed to trying to finish school and I’d love to have my degree at some point and come back and get it. But I couldn’t let this market happen again without my full attention on it.”

But while the value of a college degree is likely to hold its value over time, will bitcoin? Another college student who reduced his course load instead of dropping out cautioned, “For those that have not stepped in yet, the window is closing. Wall Street and the big money has begun to enter. They are moving very, very fast.”

The takeaway? While Bitcoin is deserving of the brouhaha surrounding it, its future is uncertain and will continue to unfold over the next weeks, months and years. So whether you get in on the action -- either as a trader or an employer in the field -- is up to you, while just how much you stand to gain from that decision remains yet to be seen.

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