Students invest in Bitcoin as price tops $10,000 December 1, 2017 0 Comments Share tweet Evani Radiya-Dixit By: Evani Radiya-Dixit Over the past year, many Stanford students have utilized Bitcoin, a popular virtual currency, as a means of making financial investments and conducting under-the-table transactions over the deep web. Bitcoin is a digital global currency system which allows people to anonymously transfer money over the Internet. It is currently the 30th-largest currency by market cap in the world and has a market valuation of $170 billion, according to CoinDesk, a news site which reports on Bitcoin and other digital currencies. The price of a single Bitcoin surpassed $10,000 on Monday, reaching an all-time high in its almost nine-year history of existence. This past summer, one sophomore, who asked to remain anonymous to protect the privacy of his financial information, began looking into cryptocurrencies – also known more simply as “crypto” – and researching their market fluctuations. “Because you hear this buzzword so much, you’re like, what does crypto actually mean, and what does it mean to invest in crypto? It all seems fake because it has no real backing value,” he said. The student said he first overheard several people talking about crypto during his summer internship at a venture capital firm. Interested in making money off the virtual currency, he and two of his friends decided to each invest $20 in May for a total $60 investment in Bitcoin when they saw the rates drop to $1,800, a low at the time. He and another sophomore friend later decided to invest a couple thousand dollars into Iota, a cryptocurrency similar to Bitcoin, because they were looking for a more long-term investment. He added that while Bitcoin can produce lucrative returns for some individuals, the investment can be risky for others. “There may be this huge hype, but you can lose all your money in less than a week,” he said. “When you invest, you want to invest at the right time. But no one knows when the right time is.” He also explained that the markets for cryptocurrency are largely dependent on public opinion and that its value fluctuates accordingly. “You might want to put 20 percent into crypto and see where it goes, and invest other parts in stocks that are more stable,” he said. “Having less risk can increase your value over time.” Other students use Bitcoin not to make money but to keep certain transactions private. Riley Simpson ’20 has invested in solar stocks, Disney, Apple and smaller company stocks for which she said “the payoff can be a lot greater” than for Bitcoin. She has also used Bitcoin to transfer money over the Internet to purchase a fake identification card. Another sophomore student who asked to remain anonymous for privacy reasons also purchased four fake identification cards at a rate of $70 per person. “It wasn’t so much a calculated financial decision for me,” she explained. “The only reason I used Bitcoin is [because] I wanted to get some fake IDs and the website I was using required Bitcoin. I exchanged the exact amount of dollars that I needed to pay for the IDs.” She added that she’s reluctant to invest financially in Bitcoin since its market tends to be volatile. “I think Bitcoin has a lot of fluctuation,” she said. “It is hard to tell what the government is going to decide to do about it.” Bitcoin is an implementation of blockchain technology, a growing distributed database with sets of linked records called blocks. These blocks are encrypted such that only a user with a specific key can add a new record, making blockchain secure and transparent. Many developers and engineers view blockchain as a technological improvement since it is decentralized and thus at low risk for being hacked. The blockchain component of Bitcoin has also made it a very fast-growing asset that many companies are trying to leverage to cut trading costs. At the same time, crypto has faced some skepticism from powerful industry leaders such as JP Morgan CEO Jamie Dimon, who criticized Bitcoin as a fraud. In an investor conference in New York this September, he was quoted stating that if a JP Morgan trader were to use Bitcoin, he would “fire them in a second” since he believes the digital currency is “dangerous,” according to Bloomberg. The surge in the price of cryptocurrencies this past year has sparked worldwide interest in Bitcoin as more and more people look toward unconventional means of investing their money. “The privatization of money makes a lot of sense for the modern world,” said Simpson. Contact Evani Radiya-Dixit at evanir ‘at’ stanford.edu. bitcoin crypto cryptocurrencyt dark web Finance Internet investment Technology 2017-12-01 Evani Radiya-Dixit December 1, 2017 0 Comments Share tweet Subscribe Click here to subscribe to our daily newsletter of top headlines.