Last semester Bitcoin quadrupled in value and reached heights experts never thought possible. During that surge, UT students took notice and started groups where they could discuss, analyze and invest in the Bitcoin boom.
“A lot of us (in the group) are computer science or math students,” said Ian Macalinao, Texas Crypto founder and math senior. “We talk a lot about the underlying technology, but honestly the biggest thing we do right now in the chat is trade because it’s very profitable and really exciting.”
Texas Crypto is an online discussion group where Macalinao said members have made tens of thousands of dollars in a matter of weeks by trading various cryptocurrencies, a digital form of payment built on cryptography.
“I think 10, 15 years down the line, cryptocurrency will definitely be mainstream,” Macalinao said. “I think cryptocurrency will have a huge impact on the world, the same way the separation of church and state had an impact on the world back when the U.S. was founded.”
In September, computer science sophomore Alan Orwick co-founded Texas Blockchain, a group that helps students learn about blockchain, the technology behind cryptocurrency.
“Yeah, it’s fun to make a lot of money in the short term, but ultimately this is a long-term thing,” Orwick said. “My ideal situation is for all of these (cryptocurrencies) to replace our current financial system, but the way it’s playing out right now, cryptocurrencies are kind of creating their own thing rather than tying into what we have now.”
Orwick said the Texas Blockchain website has resources for learning about cryptocurrencies, but he also suggested having a basic understanding of general investing before diving into cryptocurrency.
“You don’t want to throw someone into the crypto market that doesn’t have a whole lot of understanding of investing in general, because that tends to lead to bad financial advice,” Orwick said.
While there are no professors listed on UT-Austin’s website as studying cryptocurrency, David Yermack, a professor at New York University, teaches classes in Bitcoin and cryptocurrencies.
“To me, one of the most interesting developments is that central banks are thinking of using the technology to issue the national currency,” Yermack said. “The Bank of England, the People’s Bank of China and some others are taking a long look at whether societies wouldn’t be better off having cryptographic money instead of paper money.”
Yermack said although governments are showing interest in the technology, this is not the same as governments using Bitcoin.
“I wouldn’t exaggerate the role of cryptocurrency in the economy,” Yermack said. “I think it’s introduced a technology that has huge appeal to industry and government, but as standalone products, cryptocurrencies are still at the curiosity stage.”
Yermack said the technology is filled with deep ironies.
“It’s a technology that was developed by people with extremely conservative right-wing views, but most of the user community are the left-wing grunge crowd,” Yermack said. “Neither group understands or expected to be dealing with the other.”
Yermack also said he does not know of any professors at UT studying this technology, but expects that to change soon.
“If there are no professors studying this at Texas right now, there almost certainly will be within a year or two,” Yermack said. “This has gotten way too big for anybody to ignore.”
