By Aislinn Keely
A growing interest in cryptocurrency has led to a sharp increase in the financial technology (FinTech)market, with currencies like Bitcoin and its counterparts seeing significant peaks and valleys each week. At Fordham there is a growing number of students to match the growing market interested in FinTech.
With the marriage of two disciplines, computer science and finance, students across colleges have shown interest in learning more about the market, joining Fordham’s new FinTech Network as well as pursuing FinTech projects through the Fordham Foundry and personal ventures.
Benjamin Cole, associate professor of strategy and statistics and William J. Loschert endowed chair in Entrepreneurship, has been a resource for students taking an interest in the market. However, his interest is primarily personal, conducting his research outside of Fordham.
Cole explained that in order to understand the world of cryptocurrency, it is important to understand the basics of blockchain, the building blocks of cryptocurrencies. Blockchain acts as an ongoing document that anyone can view and add to, but no one can delete from. It is an ongoing ledger, proving transactions between buyers and sellers as well as creating the building blocks for currencies, according to Cole.
The transactions are facilitated through mining, a process done by highly-effective computers rigged to cycle through algorithms that can prove the buyer has currency to pay with, prove the seller has a way to accept the currency and then move the currency from buyer to seller.
Miners, people who have ‘rigs’ to facilitate these transactions, are incentivized to do so by receiving ‘mined’ currency for their work. Cole used the analogy of miners racing one another to find a code that can facilitate a transaction, thus winning a payout of the currency.
“The coins are being generated by the system ready to reward people waiting to do work,” said Cole. “It’s really quite an elegant solution.”
Miners need only set up a rig to begin their work and join in. Marcin Walski, GSB ’18, is the holder of a six-figure crypto fund, but his next venture is building a mining rig with his friend, Adam Leesman, FCRH ’18. Leesman, a computer science major, is helping Walski build the hardware necessary to complete the transactions.
While some undertake building a mining rig for the potential payout, Leesman said he joined the project because he had always enjoyed computer hardware, and the opportunity to set up a mining rig seemed fun.
“It’s kind of a challenge,” he said.
However, mining does not generate new currency. In the case of bitcoin, there are a finite number that can be mined, about 21 million, according to Cole. Cole explained that with every 210,000 bitcoins mined, the payout for mining halves beginning at 50 bitcoin. Over 16 million bitcoin have already been mined.
“It’s built in that it’s supposed to be deflationary by nature,” said Cole.
Eventually, when the 21 million bitcoins allocated to mining are exhausted, miners will receive a payout from those engaging in the transaction, much like a transaction unrelated to cryptocurrency.
This type of system is revolutionary for financial industries, according to Walski.
“I believe this will replace a lot of redundancies,” he said. “This basically automates financial service industry.”
Walski got in on the ground floor of the cryptocurrency market, getting involved in all aspects the market had to offer. In addition to his fund and plans to mine, Walski is also developing his own whitepaper, or paper explaining how to build his own currency on blockchain. He has holdings in over 15 cryptocurrencies.
“I guess we’re the whole package, we do everything you can possibly do within crypto,” said Walski.
However, some students are involved in cryptocurrency to a lesser degree. Daniel Joseph, FCRH ’20, bought bitcoin in December, when it started to see a rise.
“I decided to say why not, I felt like there was enough real capital and real organizations that I wasn’t going to get my money stolen instantly, which didn’t happen,” he said.
Since then, Joseph has increased his holdings in crypto.
“I think it will change the world eventually, like block-chain technology has the potential to disrupt everything and change the way the world works,” he said.
The Fordham FinTech Network is preparing for these changes by creating a support system between Fordham campuses on the undergraduate and graduate level, as well as with professionals and faculty, according to Carina Oriel, GSB ’20, president of the network.
“It’s a completely full blown network that works together in all aspects and ages,” said Oriel.
The group puts together events and panels to educate people on the nature and direction of cryptocurrency, according to Oriel. She said interest is growing – she usually receives 15 emails a week asking to be added to the group’s email list.
The Network’s next project is creating a research team to collect data on cryptocurrency and its direction.
“Because the FinTech industry is happening now, we don’t have a lot of research about that past,” said Oriel. She said FinTech hopes to fill that gap of knowledge.
Walski cited the danger of investing in crypto without sufficient knowledge of the system. He said investments made due to the current craze could lead to losing it all.
“That’s actually a scary thought because a lot of people are investing in something they don’t understand,” he said. “If you’re investing in something, you should know everything about it.”
FinTech will also serve as an educational network as industries turn towards crypto, which Cole said is the trajectory businesses will take.
“There are a lot of industries that are going to change because of this technology, even in the next five years,” said Cole.