Blockchain & Crytpo at USC

Its that time of year and this month we are kicking off my next course on Blockchain, Cryptocurrency, and Entrepreneurship in Information Sciences in the University of South Carolina College of Information and Communications at the University of South Carolina .

I have moved off our previous text of earlier years to Ric Edelman's, The Truth About Crypto.

Edelman, a renowned financial expert, and author, offers our students a practical guide to the newest frontier in investment strategy, crypto. Blockchain and bitcoin are expected to transform the global financial system, with PWC predicting a nearly $2 trillion addition to the world's $80 trillion economy by 2030.

However, the average business owner, individual person, and, more importantly, their investment advisors are often unaware of these incredible investment opportunities. Edelman's book, The Truth About Crypto, provides sound, practical advice for success in this new asset class. The book explains how blockchain works, and the difference between digital currency and digital assets and provides a comprehensive look at every aspect of the field. Edelman's book is a must-read for anyone looking to achieve investment success today.

It is also fairly up-to-date, with the opportunity for my students to research the evolution of the industry since 2022!

In this book, Edelman argues that while he may appear to be a fervent supporter of digital assets, he consistently advises readers to only put 1% of their portfolios in this new market.

As I tout regularly, blockchain technology has the potential to transform the world's economy, as it is based on distributed ledger technology, which makes each transaction visible to everyone and is recorded publicly. This quality has the potential to simplify previously challenging transactions, such as real estate deals. Transactions of most blockchain systems are transparent and auditable. For example, just today it was announced that the DOJ arrested two individuals in Manhattan for an alleged conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange. The present value of which is ~$4.5 billion. "Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, New York, are scheduled to make their initial appearances in federal court today at 3:00 p.m.

Blockchain technology will have a significant impact because it transforms businesses, reducing, if not eliminating, the need for lawyers, stockbrokers, insurance agents, ticket brokers, etc. This is because the blockchain is intended to be an impenetrable method of authenticating significant transactions. It is enduring, and a record cannot be deleted, replicated, or modified once it has been added to the blockchain.

The goal of bitcoin has always been to replace fiat money, with the number of bitcoins available capped at 21 million. However, there are several basic issues with bitcoin, such as its erratic nature and the time it takes for a transaction to be approved by the bitcoin ledger. Alternative cryptocurrencies such as Tether, Litecoin, and Ether have been developed to fix the original virtual currency's issues. The ecosystem for digital assets is intricate and constantly expanding, and skepticism persists despite bitcoin's rising popularity.

One argument against bitcoin is that it lacks a foundation of gold, silver, or anything else of value, making it impossible for it to function as money. Cryptocurrency is already a legitimate currency in El Salvadore, and despite its volatility and skepticism surrounding its legitimacy, several countries are experimenting with bitcoin or their own central bank digital currency (CBDCs), such as the "sand dollar" adopted by the Bahamas and FedCoin here in the US.

Investing in digital assets can benefit an individual's finances through various tactics. One option is to mine coins, invest in miners, purchase tokens or coins directly through digital asset exchanges like Binance, Coinbase, Gemini, Kraken, and Robinhood, and farm for yield through yield farming. Investing in blockchain infrastructure, such as Levi Strauss's California Gold Rush, can protect digital assets. Derivatives based on potential movements of digital assets, such as options, futures, forwards, or swaps, can be dangerous due to leverage and amplified gains and losses.

Exchange-traded funds that invest in bitcoin futures are an option as well, reducing your risk of investing directly in the futures market directly due to consumer safeguards. Examples include the ProShares Bitcoin Strategy ETF and the Global X Blockchain & Bitcoin Strategy ETF.

My belief is that blockchain and cryptocurrencies offer so many opportunities for investors to diversify their investments and protect their financial futures, that it is a fiduciary responsibility of all investment officers and advisers to educate and offer trading services to their clients.

If you want to learn more, get Edelman's book today. Read or listen to it.