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Bitcoin’s Rising Role in Higher Education

Education Background

The prominence of Bitcoin at higher education institutions suggests that college and university students are engaged and interested in cryptocurrency.  This post is largely in response to the claim that Bitcoin is unpopular with students, issued in article by cryptocoinnews.com and the Boston Globe.  In these articles, authors use an MIT study to support the theory that Bitcoin is not popular with students.  The study was conducted by two MIT students who raised $500,000 for research.  Using the funding, they issued $100 in Bitcoin to every undergraduate student on campus.  Over the course of the two-year study, shutterstock_196143734they monitored usage rates and foudn that 3/5 students stopped using Bitcoin and cashed in for $100 USD.  News outlets have taken this as an indicator that Bitcoin is unpopular with students in this demographic.  However, upon scrutiny, these findings are not robust.

To offer a personal opinion, an adoption rate of 40% for a currency that could revolutionize finance seems significant.  Ignoring opinions, college student expenses are high.  The opportunity cost of holding onto $100 in cryptocurrency for academic purposes deserves recognition.  These two considerations warrant a high level of skepticism in considering the headline conclusions from news sources.

Signals of Growth

Even if the study demonstrated low adoption rates of college students, Bitcoin’s presence in higher education has increased in tangible steps.  Elite educational institutions, such as Stanford and NYU, now offer Bitcoin development and litigation classes.  Princeton released its first draft of a Bitcoin textbook earlier this year.  The visible growth of Bitcoin is due to a growing demand from students.

An Important Demographic

The debate surrounding Bitcoin’s popularity begs the question: why should investors care?  As a succinct answer, college students today can help predict the future of the currency.  As classes develop to clarify the legal status of Bitcoin, or promote the development of Bitcoin and blockchain apps, usage will become increasingly widespread.  Positive usage rates positively impact Bitcoin value.

Bitcoin Exchange Gemini to Launch Daily Auctions

Bitcoin has seen a significant shift in price level going into the last week of September. Breaking the support at $600, the prices rammed into its support around $595 and rebounded back to higher level. While the support at $595 looks strong, whether the prices will bounce back above $600 again depends on the fundamentals. While currently there are no strong fundamentals to direct the price, let’s look into the latest developments in the market:

Winklevoss Bitcoin Exchange Gemini to Launch Daily Auctions:

Gemini Trading, the bitcoin and ethereum exchange, founded by Winklevoss brothers, is all set to host daily bitcoin auctions. Such auctions are common for New York Stock Exchange or Nasdaq to determine more accurate closing prices for the day. However Gemini is positioning the auction as more than a first for its exchange.

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Tyler Winklevoss stated:

“It’s the first ever end-of-day auction on a bitcoin exchange. It’s a pretty standard feature on traditional exchanges that didn’t exist on a bitcoin exchange until now.”

The launch represents the effort by the Winklevoss brothers to create investment mechanisms for mainstream investors. Beginning at 5pm ET every day, Gemini will begin accepting two-sided bids in BTC/USD for the next day’s auction.  By concentrating liquidity at a single moment each day, Winklevoss says the auction will increase liquidity. At the same time, this will minimize “slippage” that results from large investors who affect the price with their purchases. After 22 hours and 50 minutes of bidding, Gemini will begin publishing “indicative auction prices” every minute. This gives the bidders a chance to pull out their bids until 3:59pm ET, after which the final bid closes. The closing price is the price at which the greatest aggregate buy and sell demand meets.

Accenture and Microsoft reveal Blockchain plans:

Last week, an executive from Accenture described Bitcoin’s immutability as a weakness. Now, the company has designed a distributed ledger platform to address this alleged fault. Accenture says data is viable for edits on this blockchain, but only under “extraordinary circumstances.”  The prototype according to Accenture is immutable to its user base but, if necessary, designated administrators can “edit, rewrite, and remove blocks of information.” The company claims it enables this feature with a new function called “chameleon.”

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While Accenture is ready with a prototype, Microsoft announced the updates on “Bletchley Blockchain Project” during Blockchain week in Shangai. Project Bletchley aims to harness the power of consortium-based blockchains. Bletchley creates a template that enables customers to “spin up” a consortium network using a permissioned version of Ethereum. The Azure initiative also introduces Cryptlets, a primer for “next generation” blockchain applications. Similar to the Hyperledger Project, Bletchley aims to deliver a blockchain application fabric. Microsoft says this initiative will allow enterprises to collaborate with operations differently. With the template and Cryptlets, developers can get the foundations for building distributed ledger apps.