Beyond Bitcoin: Why Interest in Blockchain is Growing at BU | BU today

Interest in blockchain, the technology on which Bitcoin and other cryptocurrencies are based, has surged at Boston University among students and faculty — even amid financial questions about security, risk factors and value.

CoinDesk, a leading online media platform covering the cryptocurrency space, recently named BU on its global list of Best Universities for Blockchain 2022, writing: “The private research university in the heart of the Massachusetts capital offers 12 blockchain-related courses, including blockchain and Social Impact and Crypto for Data Science. At the graduate level, there is a Master of Science in Mathematical Finance and Financial Technology, and a Master of Science in Computer Science with a specialization in Cybersecurity. The university also offers two graduate certificate programs in Financial Technology and Advanced Financial Technology. Student interest in blockchain is keen enough to have launched three student clubs, including Cryptocurrency Club, Fintech Club and BU Bitcoin Club.“

All this action raises a number of questions, starting with . . .

What is blockchain, by the way?

“Blockchain is essentially a distributed database technology that is maintained and used by many individuals simultaneously,” says Gerry Tsoukalas, an associate professor at the Questrom School of Business in information systems. “Think of it like Google Docs, where multiple people can read and edit a document at the same time, except without a central entity like Google owning it.”

Mark Williams, a Questrom Master’s Lecturer in Finance and faculty advisor for the BU Fintech Club (“fintech” is financial technology), emphasizes that blockchain “allows for the secure recording of digital transactions through a decentralized, trustless system, potentially eliminating the need for traditional intermediaries, which banks and brokers.”

Williams created the first graduate-level fintech course at BU, and he sees blockchain as “a proofreading process where decentralized transactions are approved, and then added to a digital ledger, which is both secure and immutable.” blockchain is also an open source system (as opposed to a closed platform owned by a company). That means anyone can write programs for it, “thereby allowing room for creativity and innovation,” says Williams.

This leads to a natural follow-up question:

How is blockchain used?

Besides cryptocurrencies, blockchain has brought us NFTs or “non-fungible tokens.” NFTs are unique digital identifiers registered on a blockchain that certify ownership of an asset. As Tsoukalas explains, NFTs or “tokenization provide the ability to share asset ownership between multiple people.”

For example, he says, several investors can own a house that generates income for all of them. Their ownership would be represented by tokens, and that would give them profit sharing and voting rights.

Williams explains that NFTs “have become a multi-billion dollar industry that has swept the art world, solving the problem of ensuring there is no forgery and also making sure royalties go to the artists who actually created the digital representation.” He adds that even Major League Baseball and the NBA have jumped on the popularity of NFTs to create digital sports cards.

And while NFTs have become a high-profile use of blockchain, the technology has many other applications. “I’m very interested in how blockchain can replace financial institutions in a trustless environment,” says Williams. “When you think about why a JP Morgan [investment bank] exists, it is because you have two parties to a transaction who may not know each other, but they both trust the intermediary. If you create an environment where trust is not necessary, a third-party intermediary does not need to be paid on both ends, which eliminates what we call the frictional costs of transactions.”

Blockchain can potentially expand access to lending. “They underpaid [or unbanked] represents about 15 percent of the Greater Boston community, Williams says. “If you can give this marginalized group direct access to finance with blockchain, you create accruals instead of barriers, and you actually improve people’s living standards.”

Are students showing more interest in blockchain?

Without question. BU senior Jasmine Fanchu Zhou, majoring in economics and mathematics, heard about blockchain for the first time during her senior year of high school. “My cousin was a crypto trader and said I should look into blockchain,” she says. After his second year at BU, Zhou worked as a summer intern at a cryptocurrency company called Binance.

“It was during that summer internship that I realized what a big world blockchain is, with so many applications beyond just cryptocurrency,” Zhou says. She later joined the BU Blockchain Club, and began attending events in Boston and New York City. “Right now I’m looking at token economics, which is closely related to my economics studies,” she says.

Zhou has noticed an increase in students’ interest in blockchain. “About a year ago, I started hearing more students talking about it. The BU Blockchain Club does a really good job of bringing people together and inviting great guest speakers to educate our community about blockchain, she says.

Henry Willis, a sophomore majoring in computer science and a member of the BU Fintech Club, went to his first meeting of the club last year and was surprised that “there were so many members at the meeting that half of us had to stand up.”

Questrom’s Williams sees interest in blockchain pivoting away from cryptocurrency and toward other applications, such as NFTs and smart contracts. “What I’m seeing now, probably because of the big drop in the value of cryptocurrency, is more student focus on the underlying technology of the blockchain itself. The momentum is moving toward creating stable tokens that can be used on the blockchain.”

So, is BU increasing its course offerings in blockchain?

Blockchain and its applications cut across multiple disciplines, including computer science, finance, economics, business, engineering, and others. And as CoinDesk noted, BU offers 12 blockchain-related courses, such as Blockchain and Social Impact and Crypto for Data Science.

Steven Kou, a Questrom Professor of Management and Finance, teaches a graduate-level course called Economics of FinTech that covers blockchain and blockchain programming. “Many, many students have signed up for this class, which is a testament to the value students see in it,” says Kou. “Blockchain is an important fintech trend. There are jobs available for students, and other universities offer graduate programs related to blockchain.”

And what about beyond BU – is a blockchain ecosystem emerging?

Could a thriving blockchain ecosystem develop in Greater Boston, just like we’ve seen in the life sciences? Zhou thinks so: “Boston is a big city with academic giants like Harvard and MIT in the same area as BU. You have opportunities for blockchain collaboration, as well as space for teachers, students and startups to interact and be exposed to all these amazing blockchain applications.”

Willis offers a personal example: “I just participated in the Hack Boston event hosted by Harvard and MIT and got third place in one of the prizes. In addition to winning a few thousand dollars, I connected with two of the event’s sponsors who want to privately fund our project.”

The project will use blockchain to reduce the effects of climate change. “We’re using blockchain to replicate and then improve the cap-and-trade system currently in place to limit emissions in thirteen US states,” says Willis. “Due to corruption, and sheer accident, carbon permits are often double-counted or hoarded by companies with significant resources to manipulate the market.”

Zhou offers a final thought: “BU is such a massive and diverse educational community. There is so much collaboration and energy happening here, and now around blockchain, that is really valuable for all of us.”