Bitcoin this, litecoin that. It seems the days of nickels and dimes are over. Now, the only coins anyone ever talks about can’t be seen, held or, to be honest, spent on really anything.
In this age of technology, even cold, hard cash is going digital, and some expect cryptocurrencies to be the future of finance.
Cryptocurrencies, like bitcoin, litecoin and ethereum, are a digital currency that is unregulated. Investors can purchase units of cryptocurrencies, similar to stocks, in hopes that their prices will rise, letting them sell their coins for a profit in U.S. dollars.
Just last week, rapper 50 Cent discovered he “accidentally” made $8 million in bitcoin after letting fans use the cryptocurrency to buy his 2014 album.
With user-friendly apps like the widely popular Coinbase, buying and selling cryptocurrencies is easier than ever. Just a few clicks and users can be on their way to making millions.
But is the world of digital currencies simply a passing trend, or are UNC students buying into it?
Junior Daniel Wang is.
Wang, an economics and statistics double major, first heard of cryptocurrencies in September after a friend recommended he invest. Wang did his research and soon enough, he was sold.
“I was just like, ‘You know what, I’ll throw some money in where I’m not too worried if I lose it all,’” Wang said. “I started out slow and eventually got addicted, and now it’s basically my entire life savings.”
Now, four months later, Wang has seen his investment nearly triple. If he cashed out now, he’d make around $9,000.
“If I’m going to pretend like I’m some sort of crypto-genius, I’m not,” Wang said. “I just see what everyone else is buying and if it seems reasonable, like it’s not a pyramid scheme, I’ll invest. It’s turned out pretty well, and I’m going to keep throwing money in there and keeping money in there for a long time.”
But junior business administration major Thomas Brown hasn’t had quite the same luck.
Unlike Wang, Brown wasn’t looking for a long-term investment. Instead, he was just looking to make a quick buck and set himself up for a nice spring break trip.
In December, Brown saw his friends getting quick returns from cryptocurrencies and wanted to get in on the action.
“Seeing friends double their investments in a week was really attractive, so I decided to invest on a whim,” Brown said. “After those first few days, I realized it probably wasn’t the most sound thinking.”
Unfortunately for Brown, his $900 investment came at the peak of bitcoin, litecoin and ethereum, three of the most popular cryptocurrencies.
Within days, Brown found himself $250 in the hole.
If only Brown could have had Wang’s advice.
“You’ve got to be realistic,” Wang said. “If you’re expecting to be a millionaire after a week, it’s not going to happen. I think if you’re going to do that short-term, you might as well just start gambling.”
For now, Brown is in it for the long haul.
“At this point, it can’t get much worse,” Brown said. “There’s no point selling now and losing all that money. I’m optimistic and hoping for the best. It’d be nice just to get back and break even.”
But Brown isn’t the only one who’s optimistic.
Nir Kshetri, a professor in the Bryan School of Business and Economics at the University of North Carolina at Greensboro, has studied cryptocurrencies for nearly two and a half years.
“In general, I’m in favor of cryptocurrencies and blockchains, which are really, really powerful things,” Kshetri said. “Blockchain is going to transform the future of all the economic transactions we do, maybe in five years or 10 years.”
Blockchain serves as a ledger to keep track of transactions made via cryptocurrencies.
Kshetri projects that in the not-too-distant-future, the cryptocurrency market will correct itself and begin to replace more traditional investments such as stocks and bonds.
Beyond college students looking to invest, Kshetri said that one of the largest potential impacts cryptocurrencies could have on the world is providing people without bank accounts access to currencies, particularly in developing countries.
“It’s just something for those poorer countries in the world, where about (1.1 billion) people don’t have any form of ID and 2.5 billion people in the world don’t have any type of formal (bank) account," Kshetri said. "In developing countries where there are no banks, no ATMs, all these cryptocurrencies could transform their lives.”
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