By Darina Keshtova
We live in a rapidly changing world where new technology dramatically alters the course of people’s lives. Today, the ability to receive timely information about the emergence of new revolutionary technologies, the ability to anticipate the changes that they will cause, and to be among the people who apply, promote, and develop innovations is becoming a prerequisite for success. This knowledge can also protect us from spending limited, dead-end resources (in an evolutionary sense). It is essential to stay up-to-date with the latest inventions to avoid getting involved in disappearing fields of work and lifestyles. Most importantly, it is crucial for college students to be aware of the changes happening around them, such that they can base their future on what lies ahead of them.
One such groundbreaking technology, which has piqued the interest not only of financiers and economists, but also of scholars in political economy and law, is blockchain: the code that enables the secure existence of cryptocurrencies (more precisely, information about transactions with cryptocurrency). Blockchain is responsible for the surging popularity of cryptocurrencies because it facilitates the transfer of digital money from person to person, without the need for intermediaries like financial institutions. It likewise provides much greater security of the owners’ funds compared to earlier technologies. Some predict that the era of physical money is coming to an end, and that we are approaching a new era that will reshape banking systems, the financial sphere, and even societal and government structures… the era of digital money. That’s why cryptocurrencies and blockchain are rapidly developing and penetrating into new areas of society, especially with famous and wealthy individuals investing in them. This thereby fosters their development and further enhances their popularity.
Some famous members of the “pro-crypto” movement include Elon Musk, Roger Ver, Michael Saylor, Barry Silbert, Messi, Ashton Kutcher, Mike Tyson, Jamie Fox, DJ Khaled, and Nikita Kucherov. Musk, one of the most prominent business magnates and investors of our time, is a particularly outspoken advocate for cryptocurrency. His company Tesla at one point held close to 2 billion dollars worth of Bitcoin before subsequently divesting a significant portion.
Leading universities—as structures whose main mission is to study these phenomena, participate in innovations, and train competitive professionals—have begun to actively introduce their students to the world of blockchain. The opportunities that this technology provides involves students in new developments and the search for applications beyond just finance. I strongly believe that it is important for Binghamton University, as one of the leading higher educational state institutions in the US, to better engage with research and education in blockchain technologies. This initiative will not only enhance the prestige of our school, but also increase the quality, interest, and reach of our research. Furthermore, this initiative will position our university as one of the foremost institutions contributing to the development of a revolutionary financial technology—one which represents the transition of humanity to the next stage of development.
So how does blockchain work? What are its main features and advantages? Blockchain is a database with transactions consisting of a sequentially built “chain” of digital “blocks.” Each “block” stores information about the transactions that came before and after it. The sequence of these “blocks” forms the “chain.” The entries of this database remain unchanged due to the “hashing” mechanism: a unique mix of alphabetic and numeric characters, where a change in one character leads to a change in all other parts. The standout advantage of the blockchain is its transparency: everyone can see the information inside the blocks, but no one can change or destroy it, thanks to the hashing mechanism. Unlike traditional centralized systems, blockchain operates as a decentralized ledger system available to every member of this network. This means transactions can occur directly between parties without the need for intermediaries such as a government, financial institution, or lawyer. Blockchain still allows transactions to be registered in financial and government institutions, which is potentially faster and more cost-effective. Moreover, the process of adding new blocks to the chain—known as mining—rewards participants, forming the financial foundation of the system. After the first transaction is made, it must be confirmed by several network participants (this is how it operates without specific intermediaries). Blockchain operates 24/7, distinguishing it from conventional banks that adhere to business hours in providing particular services and are subject to central bank regulations.
Now imagine a world where not only financial transactions can be securely and independently processed without external interference, but individuals can also exchange ownership rights without the involvement of notaries and legal organizations. This becomes a reality with Ethereum, a cryptocurrency and blockchain platform that acts as a unique digital realm where value can be exchanged, and rights can be secured using blockchain. This allows Ethereum to provide a comprehensive infrastructure, which can create and execute smart contracts and decentralized apps. The true innovation of Ethereum lies in its ability to redefine how “value” is transferred and rights are guaranteed in a decentralized, programmable, and autonomous manner.
The advantages of cryptocurrencies mentioned above have the potential to significantly reduce the level of white-collar crime, as they eliminate the possibility of fraud, data and monetary theft. Furthermore, cryptocurrency may lead to the gradual disappearance of many expensive, often ineffective components of our current financial systems and legal structures, making transactions and their financial aspects autonomous, safe, quick and low cost. For instance, the opportunity to facilitate international transactions in cryptocurrencies without intermediaries will be lower in cost than through traditional banking systems or payment processors, as there will be no processing fee added.
Cryptocurrency investments have already had some positive impact on society. Let’s return to the example of Elon Musk. Because of his interest in this technology, Musk was able to make substantial donations in Dogecoin (another kind of crypto) to fund a moon mission. This shows the potential for these digital currencies to facilitate large-scale donations and support philanthropic efforts. Since cryptocurrencies are accessible to anyone with an internet connection, enabling mass-donations to those in need from underserved areas.The fast processing-period of cryptocurrency transactions allows immediate responses to emergency situations to provide humanitarian assistance. However, the same technology challenges us posing the need to develop new methods to combat the negatives of blockchain, such as hiding income, tax evasion, illegal financial transactions among others.
Despite the fact that blockchain’s primary purpose was to record transactions, it has already given rise to many crypto-financial services. These include instant purchases in buying and trading cryptocurrencies, and more complex functions like decentralized loans. In recent years, blockchain technology has found applications not only in the sphere of finance but also in many other aspects of our everyday life. For instance, blockchain games aim to address problems in the industry, such as manipulation by gaming companies, payment difficulties, and game balance, while also providing new solutions such as player asset ownership, assigning real-life financial value to digital goods and assets. This enables their trade on blockchain-based game marketplaces such as “Axie Infinity,” which gives you the opportunity to gain cryptocurrency from playing. Blockchain games are managed by decentralized autonomous organizations instead of centralized entities. This means that players have the opportunity to influence certain decision-making processes in the virtual world, such as adding new features or changing game policies, rather than relying solely on the decisions of the company owners. Additionally, blockchain records all virtual transactions on transparent ledgers, helping to prevent hidden fees imposed on gamers by game owners. For instance, in Alien Worlds, one of the most popular blockchain games, players explore virtual planets and appropriate their resources, such as native cryptocurrency in tokens, while completing in-game tasks, with the purpose of earning passive rewards and consequently trading and exchanging them. Moreover, players are enabled to be a part of the game’s governance mechanisms by voting on game-related decisions.
Also, this technology has helped improve service levels in the real estate industry, addressing issues like slow transactions and mistrust between sellers and intermediaries. has introduced innovative business models, such as fractional ownership of assets that were previously challenging or impossible to divide, such as buildings, works of art and intellectual property that can not be physically split into smaller pieces. Blockchain represents the right of ownership of the asset in tokens, which, in turn, are a part of the right to a property, enabling the division of the asset into as many and as small fractions as necessary. This makes it possible for countless investors to be co-owners of an asset, democratizing investment opportunities and making them more affordable, and providing them with the right to influence decision-making related to it. Also, the development of fractional ownership will significantly reduce the risk of investing into an asset, as the cost of possible loss from investment is shared with your co-owners, and will allow you to allocate your capital in more and diverse ways.
There are some other industries that also benefited from blockchain. In the insurance sector, this technology enhances fraud prevention, streamlines document circulation and reinsurance processes. Also, this technology is advantageous in data protection, enabling companies to establish distributed document management, which helps prevent denial of service attacks from hackers and reduces the vulnerability of website hosting services. Most pertinently, blockchain is also taking over education: fostering academic engagement, applying unchaining ledgers to store academic records and data among many other innovations.
Because of these benefits, countries such as Australia, China, and Malta have already embraced blockchain to enhance security.
The fact that some countries, including one of the world’s largest economies, China, are implementing blockchain technology in their policies, and it is now finding application in the forefront of people’s social and professional lives, emphasizes the significance and scale of this technology. This should serve as an encouragement for us to delve deeper into its multiplicities, stimulating further research in this field. It’s crucial to raise awareness about blockchain and the cryptocurrencies it serves as a foundation for among our generation. We must implement initiatives for the education and use of this technology at our university.
Leading universities have already shown that we can engage in the development of the global economy and positively influence society by contributing to the blockchain and cryptocurrency movement. The Massachusetts Institute of Technology conducted groundbreaking research on blockchain that has resulted in the development of new. “consensus mechanisms” (programs which carry out the mission of achieving the highest possible liability and security in a decentralized blockchain network), and other security solutions. These advancements have the potential to revolutionize the financial and technological sectors. The University of California, Berkeley initiated the Interledger Protocol project, with the goal of facilitating cross-border micropayments and enhancing global financial accessibility. Furthermore, their research into the application of blockchain in various fields, such as supply-chain management and healthcare, is drawing global attention. The universities are preparing individuals and organizations from diverse regions of the world to harness the potential of blockchain technology for not only economic but also social advancement.
For these reasons, our university should also engage in education and research on cryptocurrencies and blockchain, positioning itself as a leading force in the transition to a new era among higher educational institutions. Given Binghamton University’s R1 research status, we can make significant contributions to addressing the challenges associated with the adoption of cryptocurrencies. We can work towards enhancing and refining blockchain technology, making it even more advantageous while mitigating its drawbacks.To initiate the movement within our school, we must begin by establishing student organizations dedicated to digital currencies and the technologies behind them. We should also host seminars, discussions, and workshops to introduce this technology to university students and encourage faculty and academic departments to integrate blockchain topics into existing courses.