Our table talk with Ty — and a larger group of people than I was expecting — was filled with interesting discussion on the state and future of this interesting new monetary concept: the virtual currency.

Starting with the basics, it was a nice refresher to learn about the underlying technology behind Bitcoin (a type of cryptocurrency), blockchain: a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly. Discussion was centered around Bitcoin’s recent increase in value and whether the hype is to last. Thankfully, most didn’t have much confidence in the cryptocurrency to serve as a reliable and stable investment or way to hold savings. Some, however, did put some money into Bitcoin as a sort of fun experiment to see where ti would go. For now, it seems to be paying off! In my view, I don’t believe the rise and excitement will last.

This is not without dozens of other cryptocurrencies popping up, such as Litecoin or Etherium to Bananacoin which is backed in value by bananas (1). Interesting to say the least. I was rather pleased with the discussion. An excellent way to spend the evening.

(1) (http://www.latimes.com/food/sns-dailymeal-1868202-eat-bananacoin-latest-crazy-cryptocurrency-youve-never-heard-about-20180125-story.html)

A few years ago my grandmother came over to my apartment and as we were talking she handed me an article and asked if I knew anything about something called Bitcoin. That was the first time I’d heard of it, so I simply shook my head. After what my grandmother could describe and a brief Google search, I learned that Bitcoin was a cryptocurrency that people obtained by having their computers “mine” data for them. It certainly sounded interesting, and it caught my curiosity, but I was already busy with high school and knew I wouldn’t have time to really look any further into the matter, so I just put it aside and forgot about it. Now, years later, I probably should have put more time into understanding an obtaining this cryptocurrency.

That sentiment is probably one many share or did share up until a few weeks ago. Almost everyone at this point has at least heard of Bitcoin. Even if they know next to nothing about current or recent technology, its impossible to escape the news and not have at least heard of buzzwords such as “cryptocurrency” and “blockchain”. But, many probably don’t know much beyond that. Using Bitcoin as a prime example, a cryptocurrency is simply that, digital currency with no physical form. In the simplest terms a cryptocurrency such as Bitcoin is created by having your computer solve a large amount of extremely complicated math problems, which is called “mining”. Then, whenever a transaction with bitcoin occurs, that transaction is recorded in a blockchain, which can be compared to a massive ledger that records all transactions.

Ignoring the technical aspect, everyone seems to know how valuable Bitcoins were by the end of 2017. Nearing almost 20k a coin, it seemed almost like a miracle. However, very recently the bitcoin has seen a tremendously steep decline in value, proving that it’s not the miracle money maker everyone thought it was. In the end, the currency is akin to a stock, except without a company to back it up. So if a large amount of people decide it’s losing value and start to sell, it’s going to drop, and continue to do so. This is mainly what kept me out of investing the past few months. I knew that it would be too big a gamble considering the limited amount of knowledge I had. In the end, Bitcoin, and other cryptocurrencies like it such as Ethereum, are simply a very volatile gamble that have the potential to earn a profit, but are just as likely not to.

Last week’s table talk was about blockchain and cryptocurrency. I went into this conversation not knowing anything about this other than the words bitcoin and an awareness of the excitement that the value had increased a lot suddenly. I have a few friends who were into buying bitcoin, so I also knew that they transactions would take a significant amount of time to occur.

The first thing we talked about was blockchain. I did not know what blockchain was. I learned it was essentially no different from a register, where each transaction was added to secure list. These are open ledgers, whose data cannot be altered in any way without affecting numerous other blocks as well. Each block of data also contains the timestamp of the transaction, the transaction data and a cryptographic hash of the previous blocks data.

We also spent a little time talking about bitcoin and ethereum, and other types of cryptocurrencies. I think it is interesting that people have invested in a, what I think seems to be a stock, whose value is only based upon how many people are invested into it. While if you play the timing correctly, you can make a good profit, you can just as easily lose money without much notice.

One thing I found interesting about bitcoin, and other cryptocurrencies is that no one really owns it. [This was confusing to me at first, well it still is, because how did it start if no one owns it? How is it promoted? Who ‘mines’ for the bitcoin or gets value from the worth increasing?] This means that it cannot be regulated like usual. Rather than regulating a company, the consumers would have to be regulated.

This was an interesting talk, and it definitely sparked some interest and numerous questions about cryptocurrency, but I probably will avoid investing in it still.

I decided to attend the dinner about Bitcoin and other cryptocurrencies after having seen so much about them in the news and on social media and yet still being in a position of confusion about what the actual underlying technologies are and why there is so much hype. I walked out with still a crude understanding of these so called currencies. To me, this seems like a strange Silicon Valley brain child that was cooked up in some basement and subsequently released and deified by the public–most of whom seem to be prospectors. The original concept was largely utopian–to create a currency that was decentralized and thus free from the constraints of banking corporations and the mettling of governments. I honestly don’t see something like Bitcoin ever coming near to such a reality in the foreseeable future as the coin itself can best be described as volatile. I can see the intrigue of purchasing some of the commodity (which is literally nothing but some 1s and 0s believed to have value–arguable somewhat in the same boat as any other currency not backed with another commodity like gold), but I would only do so in the same way I would purchase a lottery day or place a bet at a casino. Cryptocurrency seems to be the “in thing” right now–something novel and cryptic from the depths of Silicon Valley–but I wouldn’t bat an eye if the entire experiment implodes as prospectors realize they are buying nothing more than an idea believed to have some tangible value. The currencies have all grown at unsustainable rates, and a correction is bound to happen in the near future. Despite this, the promise of a decentralized currency is bound to attract interest for years to come. Will the idea prevail? Only time will tell.

After understanding almost nothing about Bitcoin and admittedly scrolling past the many articles that I kept stumbling across after reading the headlines to avoid having to try to figure out what function cryptocurrency serves and why half the world seems incredibly excited about it while the other half seems sufficiently afraid of it, I found the discussion about Bitcoin, Blockchain, and all things cryptocurrency really fascinating. What really struck me as profoundly interesting and actually peculiar was the extent of the technological and business innovation that this digital currency advance has spurred. Specifically, I find this cryptocurrency bandwagon that a considerable portion of the public and far more companies than I realized seem to be joining peculiar because I never before thought that society would add a revolution in the way that people exchange goods, invest their money, or perhaps even understand what money is to the list of technological changes and advancements with which society is currently learning to grapple. Honestly, while I know society has successfully adjusted to many, many advances that seemed revolutionary in its time, I do question whether the world, at a time when we are adjusting to and preparing for the rapidly occurring advances in automation and artificial intelligence that will likely transform our current economy, is ready to deal with concerns about the reliability and stability of digital currency.

Also, one student pointed out that cryptocurrency mining uses concerning amounts of energy, and I found this immensely problematic. At the United Nations Conference of Parties in Paris in 2015, nearly every leader of every nation signed an agreement recognizing that the world needs to be carbon neutral by 2050 to stabilize human civilization. Meeting this very daunting but necessary goal requires cutting back energy use wherever possible. Expanding mining efforts that currently require using an amount energy equivalent to that used by a small country could pose a serious challenge to the goal of becoming carbon neutral by 2050. In this way, monetary yields for some might jeopardize the quality of life of future generations.

Last semester, I took a lecture series taught by students in Cornell Blockchain every Monday afternoon from 4-5. Last semester, every Monday afternoon from 4-5 was probably the best nap I got every lecture. It’s safe to say, I didn’t retain any concrete information while snoozing away my financial accounting sorrows from the hour before. Surprisingly, I gained some knowledge (shocking, I know). So, during this table talk about cryptocurrency, I was able to clear up the foggy facts that were covered during my rem-sleep naps.

One thing I learned is that cryptocurrency is kinda bubbly material. Low-key bubbly. For instance, Long Island Ice Tea recently renamed their BEVERAGE company to Long Chain and consequently tripled their stock price. Sneaky move by a TEA company. People look at bitcoin and blockchain and don’t really understand that the underlying technology behind it, blockchain technology, is simply brilliant!! Unfortunately, this lack of knowledge in such areas spread amongst the masses is the main contributor to the bubbly component of the blockchain movement. The technology is revolutionary for its decentralized currency and transparent ledger. Of course, not many people seem to understand this!! To be honest, I am still sort of confused:

What is the value that is being created that is increasing the market value of the cryptocurrency? And, also omg, this talk made me realize the catastrophic effects of blockchain mining on the environment. All rumors have a hint of truth to it, so I am going to make the assumption that the statement that was thrown around, “one block requires the energy that a small country uses in a day,” is true. Based on this fact, what are we, as a society, doing?!?!?! How is this legal?

I am not sure if this talk gave me straight forward answers, but I guess that’s the point. Cryptocurrency in it’s currently volatile state can go either way. Whether or not to invest or divest is a question of whether there is hope in blockchain technology, and I think there is…

I attended this week’s Table Talk about cryptocurrency and the bitcoin because I had heard it covered extensively by the news media but I didn’t really understand how it worked. For me, it was difficult to wrap my mind around how something intangible could have any value. When a person invests in the stock market, he/she is putting faith in a company’s ability to manufacture goods or services but investing in cryptocurrency has no such guarantee. From my very surface understanding on the topic, I’m really not in a position to come to any conclusion about whether the bitcoin is a bubble waiting to burst or the future of all currency. I would rather watch this play out from the sidelines than actively get involved.

One aspect that I had never considered was the environmental impact of the system of bitcoin. Individuals or groups can use computers to solve complex mathematical problems in exchange for bitcoins in a process called ‘mining.’ Countries like China and Russia are major players in this. According to this CNN article, the bitcoin uses about 32 terawatts of energy every year which is enough power to run 3 million American households. Experts forecast this energy usage will increase in the coming years. Obviously, this seems to counter the efforts to decrease energy consumption to fight climate change. It is true that there is a limit to the quantity of bitcoin so energy use won’t go on uncapped, but I found this to be an interesting consideration often overlooked when discussing cryptocurrency and the bitcoin in particular.

At today’s Table Talk, we discussed cryptocurrencies and blockchain technology with Ty. Cryptocurrencies such as Bitcoin have been all over the news recently, so it was nice to get a better idea of what they actually are. An especially important takeaway from this session was the difference between Bitcoin (a cryptocurrency) and blockchain (the technological setup moderating and securing cryptocurrencies). The blockchain model of data storage/transfer is potentially applicable to many other fields, while Bitcoin and its fellow cryptocurrencies are less flexible. Even if Bitcoin proves to be a bubble, which seems very possible given its lack of actual buying power to lend credibility to its supposed value, the blockchain schema may survive to form the basis of some other new technology.

What does everyone think? Is Bitcoin a bubble? What about other cryptocurrencies like Ethereum?