Cryptocurrency Researcher
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A Kummer College newsletter addressing current events of economic, technological, geopolitical, risk and regulatory affairs of goods and services.
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Welcome to the first Price Points newsletter with the Kummer College! This month, Dean Jim Sterling interviewed Dr. David Enke, interim associate dean of the Kummer College and Curators’ Distinguished Teaching Professor of Engineering Management and Systems Engineering. Enke’s research focuses on the use of AI and machine learning to predict the price and volatility of traded assets, including Bitcoin.
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What exactly are cryptocurrencies and blockchains?
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A cryptocurrency is a digital currency that uses cryptography for security. Unlike the US dollar, cryptocurrencies are typically decentralized, meaning all transactions are verified on a "blockchain."
The blockchain is a decentralized and distributed digital ledger that records transactions across multiple computers, preventing it from being altered by a centralized authority. The distributed blockchain ledger is what prevents counterfeiting, copying or double-spending of cryptocurrency.
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What makes Bitcoin unique?
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Bitcoin was designed as an alternative to fiat currencies, serving as a store of value and medium of exchange. Some investors see it as "digital gold" for maintaining value and purchasing power over time.
The amount of new Bitcoin mined or produced is designed to decrease over time, becoming more scarce than physical gold. Only 21 million Bitcoins will ever be mined, with over 19.8 million already in circulation. Other cryptocurrencies such as Ethereum and Solana have different approaches for growth and validating their blockchain ledger that can give them more functionality and speed of transaction, but potentially at the cost of security and being a good store of value.
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How is Bitcoin impacting investing and the economy right now?
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As a result of being scarce, Bitcoin can provide protection against inflation and serve as a store of value. With the introduction of new Bitcoin Exchange Traded Funds, Bitcoin is growing as a new asset class that can help diversity existing portfolios beyond traditional assets.
Since 2011, Bitcoin has been the top performing asset in 11 of the last 14 years when compared to broad asset classes or stock indexes. However in the three years it underperformed, it was the worst asset largely due to its volatility. While not ideal for going "all in," Bitcoin is increasingly seen as part of a diversified portfolio. Some companies and countries are exploring it as a reserve asset to balance holdings beyond traditional currencies. The United States government also just established a Strategic Bitcoin Reserve.
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How might Bitcoin and other cryptocurrencies affect the economy in the future?
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Bitcoin and cryptocurrencies have been instrumental in the rise of decentralized finance, leading to new ways to lend and borrow money, trade assets, value non-fungible tokens (NFTs) and support innovation in financial technology. While NFTs have been used to place value and authenticate ownership of digital assets, they can also utilize smart contract technology, allowing a creator to earn a percentage of all future asset sales.
If a previously sold artist's painting gains value and is later sold again at a higher price, the original artist could get a percent of this new value. As such, cryptocurrencies and NFTs could impact royalty rights, ticket prices to sporting events, the selling of stocks and bonds or even digital land. The potential to transfer existing financial transactions and processes on the blockchain is tremendous.
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What advice do you have for investors?
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If you're thinking about buying a cryptocurrency, do your research and be careful. There are numerous cryptocurrencies that are available for purchase, with new ones being created every day. Most will end up worthless, and even those that have a real use-case and seem to have staying power will be volatile in price. In fact, purchasing most cryptocurrencies is more akin to gambling than investing. But some will survive as investments, and will no doubt have an impact how we think about the way finance, investing and commerce is conducted in the future.
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As of this publication date, the price of Bitcoin is around $83,000.
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Join us for Giving Days at S&T!
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Celebrate 1870 minutes of giving
Join us for S&T Giving Days on April 10-11! In honor of our founding year, we’re aiming to raise support over 1,870 minutes of giving — a tribute to our rich history and an investment in the future. A gift of just $18.70 is all it takes to make a meaningful difference for the students and leaders of tomorrow.
Here’s how you can make an impact:
Every gift makes a difference. Whether large or small, your donation plays a crucial role in building a brighter future for Missouri S&T.
Support the Kummer College. As a vital unit on campus, your support for the Kummer College helps ensure continued growth and success for students in this college.
Help spread the word. Encourage others to join in to unlock challenge gifts and help Kummer College reach its fundraising goals.
How to get involved:
Between 10 a.m. Thursday, April 10, and 5:10 p.m. Friday, April 11, visit our Giving Days website when it goes live to make your gift. Whether you’re giving $18.70 or $1,870, your participation is part of the collective effort that will shape the future of Missouri S&T.
Ready to be a Giving Days ambassador for Kummer College?
Email Megan Fowler at roarkme@mst.edu.
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Kummer College of Innovation, Entrepreneurship, and Economic Development
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Missouri University of Science and Technology
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