Exploring how crypto could change the world of money

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The familiar Bitcoin, above, is a fun token, but it won’t buy you a latte. Like all cryptocurrencies, Bitcoins have no physical form. Instructor Professor Phil Snyders, class Current Issues in Digital Media, now in his second year, will return next fall to examine the rapidly changing world of digital currency. First topic: What is a Bitcoin and what it is not. Photo courtesy of Phil Snyder

Unless you are in hibernation, you have come across news reports that mention bitcoin, blockchain, cryptocurrency, FTX, or hardware wallet. Or maybe you’re already an investor in digital currency, the new monetary concept that dates back to a 2008 white paper credited to Satoshi Nakamoto.

Here is the first curiosity: Satoshi Nakamoto – he, she, maybe them – maybe doesn’t exist, maybe he never existed. Don’t let that distract you because Bitcoins themselves aren’t real things, at least not in the tangible form of money in your hand. It is a digital concept.

Confused? You have company.

A University of Houston College of Technology class is in its second year of demystifying the concepts and processes inside digital money and the brave new financial world they inhabit.

“By taking this course, my students are opening up to a new kind of economic literacy, a system that is likely to be crucial in the near future for international trade, global finance, technology, and even individual life,” said Phil Snyder, UH College of Technology Education Associate Professor who teaches the course Current Issues in Digital Media.

The course covers the history and economics of digital currency, as well as how blockchains and bitcoin miners work, and the important role Texas plays within the industry. It also studies the people, groups and events that built or guided the movement.

Included is the dramatic Nov. 11 fall into chaotic disrepute of FTX, a cryptocurrency exchange that had spent lavishly on building a philanthropic image, celebrity endorsements and political favors for much of its short existence, according to Snyder.

Many supporters of Bitcoin envision its growth into a new decentralized global currency transferred peer-to-peer over a network that transcends borders. With no banks involved, no national currency exchange, and no government exercising full control over transactions, such a peer-to-peer digital money transfer system has the potential to become the primary means of financial payment in global commerce, Snyder explained.

That’s how the theory goes, anyway. The concept has its champions and its skeptics. But within the borders of the Central American country of El Salvador, the matter has already been decided.

On September 7, 2021, El Salvador became the first country to recognize Bitcoin as an official form of legal tender. Students in Snyder’s class join bitcoin watchers from around the world to observe El Salvador as a test case.

To even begin to understand the world of digital currency and its mining systems, students first cover some basic information:

Its (very brief) history – The current digital currency trend started in 2009 with Bitcoin (note the capital “B”), which remains the leader. “Bitcoin is the only one that is truly fully viable as a stored value, as a medium of exchange, and as a unit of account,” Snyder said. Other forms have also gained ground in the world of digital currency. Some of them quickly disappeared. The story behind names – ‘Crypto’ descriptors – as in cryptocurrency – is beginning to fall out of favor, Snyder said, with bitcoin (lowercase ‘b’) beginning to appear as a generic term as well as (uppercase ‘B’) a reference to a specific form of digital currency. All those “B” discs – Being 100% digital, Bitcoin has never had a tangible form, not even in those familiar coin-shaped discs with the “B” symbol. “It’s a worthless token, a novelty with no buying power,” Snyder said. The class enters its third year in the fall of 2023 with new territory to cover, including recent rises and falls in the fortunes of Bitcoin investors.

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