Last Thanksgiving, Adam Besvinick, a Venture Capitalist in New York City, summed up the past 8 years of technology hype very eloquently (see right). Most interestingly, he capped his tweet with 2017’s front-page bubble, err, buzzword bitcoin.
For the uninitiated, bitcoin is the most famous application of the concept of Blockchain technology. While much of the current conversation around blockchains is on making ridiculous amounts of money, the conversation I find much more interesting is how blockchains will drive new advances in the technology world. Having spent the past three years working in education, I am naturally focused on the specific impact of blockchains in this field and their potential to change the ways students learn.
I don’t pretend to know all there is about either Blockchains or education. But, I am passionately curious about both and want to help build the conversation. As such, I’d like to start off by asking a key question Gen Z students are asking at bookstores around the world.
Can I buy this textbook in bitcoin?
Before we answer this question, let’s establish a simple definition of what bitcoin is. Bitcoin is a digital-only currency whose network is maintained by thousands of individual computers around the world and is not governed by any person, company, or government (i.e. there is no Bitcoin inc. or bitcoin.gov., but there is a bitcoin.org!). Bitcoin operates on what is called a “Blockchain” network, which, again, is NOT controlled by any singular entity, but which we can trust to accurately record a specific set of events that are dictated by the software on which the network runs.
There is much more to bitcoin than this, but it should be enough for the purposes of this article. For those who would like a more detailed description, I recommend this CB Insights deep dive as a starting point.
Now, with regard to buying a textbook with bitcoin; The short answer is Yes! …but it is unlikely to be a seamless experience. To understand why, imagine trying to buy a textbook using a 1-pound bar of gold. If you brought your gold bar to the checkout counter of your local bookstore, most cashiers would agree with you that a pound of gold is at least as valuable as the textbook (even at today’s textbook prices). A few might be willing to accept the pound of gold as payment (likely profiting handsomely in the process). Fewer still, if any, would have the tools to cut the bar up into appropriate portions so that you paid no more in gold than the book’s given selling price.
So, what’s the point of owning a bar of gold if you can’t buy the things you need with it? And how is this related to bitcoin? Well, bitcoin has some important similarities with gold. Most importantly, investors in both gold and bitcoin consider them a store of value. This means that these investors believe that gold and bitcoin will always have value to others, no matter what happens in the world. For example, if there were a nuclear apocalypse and you took that gold bar to a bookseller, they might even prefer the gold bar over fiat currency, such as the United States dollar. The long-term bitcoin “Hodler” believes bitcoin will be a similar long-term store of value.
To summarize, stores of value like gold and bitcoin are not always great for buying things like textbooks, but are part of many investors’ asset diversification strategies. Whether storing value in gold or bitcoin is a good idea or a bad idea is beyond the scope of the article. I am not a financial adviser and this should not be taken as financial advice!
OK, you say, so bitcoin probably isn’t the best way to buy a textbook right now. Why, then, is everyone so excited about a cryptocurrency you can’t even buy stuff with?
In a word – Blockchain. I alluded to it in my description of what bitcoin is, but did not cover what blockchain means in detail. To whet your appetite, Blockchain is one of the most exciting advances in technology today. This guy even argues it is the most important advance since the Medici family (you might remember the Medici from their famous bank, Machiavellii, and/or their having ruled the Italian state of Tuscany for a while) popularized double-entry accounting in the 1500s! The possibilities that will come with advances in blockchain could eventually bridge bitcoin (and other cryptocurrencies) from store of value to thing you can purchase a textbook with.
In my next post, we will cover what a blockchain is on a level similar to how we covered store of value here. I hope these will become the first of many articles exploring the topic of blockchains in education. Each article will remain short, covering a specific element of blockchain functionality and potential applications in education.
Even more importantly, I hope the comments section (and/or Twitter) can serve as a forum to take each discussion further and generate new ideas for writing topics!
Disclosure: I own several different cryptocurrencies, but, to my knowledge, their whitepaper use cases do not overlap with the work I do in the education industry and I do not stand to gain directly from writing this post. Views are my own and not Cengage’s and should not be construed as financial advice.