Bitcoin gained international attention in early December when it experienced a meteoric rise in value, quickly followed by a nearly 50 percent drop. While one UTD professor has written the currency off as a speculative bubble waiting to burst, a UTD organization is capitalizing off the cryptocurrency boom.
Computer science senior Michael Lewellen is president of Blockchain and Cryptographic Systems, an organization formed in August 2017 that hosts workshops and events to help students learn more about the growing field of blockchain development, as well as trains them on how to use cryptocurrency and develop applications facilitating its use.
“We had a Hackathon last semester where we got to bring people in, and six teams finished out, so it went really well,” Lewellen said. “Our plan is to keep up momentum this semester and get people jobs in this industry by summer.”
Students in the club also learn how to trade cryptocurrencies including bitcoin. According to IBM, blockchain technology was released along with bitcoin so transactions made with the cryptocurrency could be verified while fraudulent transactions would be removed.
“It’s like a bank where everyone can see the accounts,” Lewellen said. “We just don’t know who owns the account because the addresses are anonymous.”
Miners verify the transactions by using advanced computers to confirm that the transactions are valid. These miners are paid in transaction fees charged to bitcoin users in order to have their transactions confirmed.
“There’s so many people trying to push transactions through bitcoin’s network that they kind of have to bribe miners,” he said. “Only so many transactions can go through every 10 minutes, so if your transaction’s going to be one of them, you have to pay a certain fee.”
Miners verify transactions in groups known as blocks, and add non-fraudulent transactions to a chain of previously verified transactions. The process, called mining, results in the release of new bitcoins, that the miners collect.
“It’s getting to the point where there’s a massive lack of talent for people that understand this technology and anyone that’s involved in this space is trying to hire these people,” Lewellen said.
Companies such as IBM and Maersk, who teamed up mid-January to launch a blockchain-based supply chain company, are adapting to blockchain technology. Lewellen said that as large companies begin to adapt to blockchain, he hopes to get students involved in the new field through his club.
“If we can bring in students and get them familiar with this in even a semester, by the end of that semester they can have projects such as making simple front-end applications interfaced with (blockchain), and could potentially get an internship or even a full-time job with a company,” he said.
While blockchain technology has become increasingly popular, cryptocurrencies haven’t been able to become as popular, Lewellen said. Daniel Arce, the economics program head, said online currency may not be as common because of bitcoin’s volatility.
“There’s not much, if any, consumer interest in bitcoin, and that has something to do with the surging prices of bitcoin,” Arce said. “But it also has to do with the transaction fees, which have really jumped, and the whole reason for a peer-to-peer network was for it to be an alternative form of banking.”
Lewellen, who freelances as a blockchain developer and cryptocurrency consultant, explained that these fees, which usually average between $20-$30, are driving the currency’s popularity down.
“Bitcoin is getting cumbersome to use because it was originally supposed to be almost free to transact, so bitcoin and other cryptocurrencies are currently trying to solve that problem, but it’s very slow to update,” Lewellen said.
According to an article by The Verge, bitcoin’s unpredictability can be seen in instances of market manipulation which led to the currency’s crash in mid-January. Because of this, Arce warns students against investing.
“You’ve got to be prepared to lose much more money than you would think about investing, because the market is so volatile,” Arce said. “You’ve got to be prepared to lose big.”
For now, the Blockchain and Cryptographic Systems club is focusing on blockchain and its applications in various industries.
“More companies are doing blockchain initiatives where they’re looking into this and how they can adapt it to their business,” Lewellen said. “We’d like our students to be the people that fill those positions.”
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