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team’s Olympic run — but they attract buyers with virtual stars in their eyes. “I have to be in an investing world where people are making dumb decisions,” Byrd said. Because of Byrd’s arbitrage practice, what matters to him is not the prices of altcoins but the momentary differences in prices. “The cryptocurrency exchanges I use release their coins at 9 a.m.,” he said. “The moment the coins are added is the time of the most volatility. There’s not a set price, so it’s more likely to have a scenario where someone’s price in Ethereum is very different from someone’s price in Bitcoin.” Although he estimates that 90 percent of these newly introduced coins crash and burn, he takes advantage of the initial confusion and turns a profit. Bryce Bjork ’20 and Tyler Caldwell ’18 think they’ve hit upon an equally fruitful cryptocurrency project. They are the CEO and chief financial officer, respectively, of Hexa Financial. The project is a startup funded by Tsai CITY ’s Startup Accelerator. Their big idea is an app called Splash, which they’re marketing as “Paypal for Bitcoin.” The app would convert Bitcoin into U.S. dollars, allowing users to make purchases with cryptocurrency. With an interface inspired by Venmo, Splash is hoping to provide a model for how cryptocurrencies might be treated not as speculative investments but as usable money, according to Bjork. Splash is still wooing seed investors, but Bjork and Caldwell are optimistic. They’ve already hired a product designer for the summer, and their posting for a summer internship garnered 35 applications in three days. They might even take a gap semester with the other co-founders, Tony Oliverio ’20 and Lukas Burger ’20, if Hexa continues to expand at its current pace. “Classes are far less pressing than the job I’m trying to create for myself,” Caldwell said. 6 | May 2018
THE BITCOIN BUBBLE Despite student optimism, Bitcoin’s future is anything but written in stone. The currency’s value plummeted from almost $20,000 to about $8,000 in the first four months of 2018. Roach, an economics professor, believes that Bitcoin’s erratic price might signal the existence of a bubble. Bubbles occur when an asset’s market price skyrockets above its usual value. “When lines go up, when security prices go up, in a short period of time you know it’s going to end in tears,” he said. Seen only on screens, Bitcoin can seem detached from our physical world. But the energy demanded by Bitcoin mining is so great that The Guardian called miners a “climate threat.” Bitcoin has resuscitated defunct coal mines: The Digiconomist Bitcoin Energy Consumption Index estimates that Bitcoin mining operations, most of them owned by large firms, expend more electricity per hour than the country of Ireland. For all the buzz surrounding Bitcoin’s capacity to emancipate its investors, they often remain at the mercy of existing power structures. Emmett Chen-Ran ’20 was thrust into the cryptocurrency world during his internship at Bloomberg last summer. He bought NEO, an altcoin, on his mother’s advice. “She said, ‘The Chinese government is intending on adopting it, I heard about it on my group chat,’” Chen-Ran remembered. “Put in a thousand and I’ll pay you back.” He bought in when one NEO was worth $40. Last month, it was worth $200. Then cryptocurrencies were banned in China and it dropped to $65. Chen-Ran is justifiably pessimistic. “It’s a long waiting game, and I’m going to be waiting a while. I’m just sad now. I keep losing money,” he said with a sheepish laugh. THE ALL-APPLICABLE BLOCKCHAIN Many Bitcoin skeptics share the sentiments behind Chen-Ran’s experiences. As Bitcoin prices have fluctuated and fallen, analysts and amateurs alike have refocused
their excitement on the blockchain itself. According to Martin Wainstein, an Open Innovation Fellow at Tsai CITY and an affiliate of the MIT Media Lab, “The fundamental blockchain technology is still in a research and exploration phase. What values can it bring for specific sectors of the economy, specific processes? What new business models can it enable?” To begin answering these questions, Wainstein helped to organize a campuswide blockchain conference. On March 2, 150 members of the Yale community attended “Blockchain for Sustainable Solutions.” Professor of economics and Nobel laureate Robert Shiller delivered the keynote, and three panels addressed the ways blockchain technology is being used to improve energy and water trading, bolster food and fashion supply chains, and improve systems of government. Presenters speculated that, in the future, national elections might be carried out with blockchain. We could vote from our phones, assured that the election could not be rigged because no authority could manipulate the vote ledger, and every ballot could be traced back to the citizen that cast it. Ideas like this are popping up around the world according to Shiller. “Everywhere I go they want to talk about blockchain,” he said. Yale is eager to integrate the blockchain into its fabric. Tsai CITY, Yale’s innovation hub, inaugurated two blockchain initiatives this semester. Liana Wang ’20, a staff columnist for the News, who participated in both, said that the initiatives have fostered her interest “in how blockchain might be used to facilitate sustainable development or address certain human rights problems.” This vision of radical empowerment undergirds much of the blockchain excitement. Then again, so does the prospect of getting rich quick. Like most technologies, the blockchain is neither good nor bad — it reflects and refracts people and ideologies. Byrd too believes the blockchain will outlast Bitcoin. But for now, he’s content to arbitrage away. He said he’s not going to stop until he hits seven digits.