New Money

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The first recorded purchase with Bitcoin, a cryptocurrency, used 10,000 tokens to buy two pizzas in 2010. But today, the same 10,000 digital coins would buy hundreds of Lamborghinis.

Even though millions of people now use cryptocurrencies, there’s still much unknown — and much feared — about the volatile assets, says Brad Chandler, director of the business school’s Nicholas Center for Corporate Finance and Investment Banking. That’s one reason he’s launching a one-credit cryptocurrencies class this fall.

“I think cryptocurrency use has really rattled traditional financial institutions,” he says. “I came to the conclusion that our students needed to have some exposure to this to be ready for the workforce.”

One way that cryptocurrencies differ from traditional assets is how they’re traded. Dollar transactions are facilitated and tracked by centralized financial institutions, such as credit card companies or banks.

Cryptocurrencies instead work through a decentralized system. When a Bitcoin transaction occurs, the record is shared with everyone in the digital network and is added to a list of transactions called a block. New blocks are verified every 10 minutes by the first person in the network whose computer can solve the block’s equation. After verification, it’s added to the list of verified blocks called a blockchain.

This is what corporations are most interested in, according to Chandler: “blockchain, not Bitcoin.”

Chandler’s class will explore more than how cryptocurrency works. He wants students to examine different enterprise solutions companies could use to harness blockchain technology. For example, how could Walmart use blockchain to track product deliveries from factories to stores across the country?

“There’s no textbook on this subject. My biggest goal for the class, actually, is to engage [students] with new technologies that are undefined,” Chandler says. “If we wait until it’s all figured out, we will be left behind.”

Published in the Fall 2018 issue