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Cryptocurrency and blockchain
Published on November 30, 2017 42 min
Hello, my name is Garrick Hileman, and I am a Research Fellow at the Cambridge Center for Alternative Finance, which is attached to the Judge Business School at the University of Cambridge. The center has been around for a little over two years and covers any new instrument, channel, or system that emerges outside of traditional financial services. So, this includes peer-to-peer lending, crowdfunding, and my area of research in what we are here to talk about today, "Cryptocurrency and Blockchain Technology".
Four areas of the presentation today are; first, it is important to understand some basics about money and currency, I think to have a grasp on what is Bitcoin and what are cryptocurrencies and what's likely to happen to them. So, we will go through some of the basics around money and currency first. We'll then go into a high level discussion of how Bitcoin and blockchain technology works. There is not enough time to do an in-depth dive, but I want to at least provide some of the basics around the mechanics of the technology, or then talking about the current state of cryptocurrency, what is happening today? Why is this sector attracting so much interest? And then last, we will wrap up with some thoughts about what the future may hold for cryptocurrency in the months and years to come.
So first an introduction and overview of money and currency.
Question I often like to start my presentations with is, "Where does the money come from?" It's been quite interesting over the last four years giving presentations on Bitcoin and blockchain technology. To ask this question and to see how many people very highly educated, very intelligent people do not actually know the answer to this question. That's not their fault. It's actually something that is not widely taught in secondary education or even in many Economics 101 classes. Most people understand that some portion of money, the banknotes and coins in our pockets, come from central banks in some way related to something the government is doing, but what they do not typically know is that banknote and coin represent less than five percent of the total money supply. So, where does the other 95 percent of the money come from? And the answer to that question is, it comes from banks.