TCNJ

20 The College of New Jersey Magazine TM: So then how do two individuals exchange crypto? JH: Let's say your wallet address is 12345TCNJ. Your friend's address is TSC12345. You'd type in your friend's wallet address and initiate a transaction to send one Bitcoin worth $38,000 from your wallet to your friend's wallet. The networks around the world would read the open blockchain request to see if 12345TCNJ had $38,000 worth of Bitcoin to send. It would take 6-10 computers to agree that your wallet owns that amount, and it would then update the block- chain. It would then reflect the new balances in both the TCNJ wallet and the TSC wallet. Once those computers agree that the ledger is still balanced, it would add that block of transactional information to the previous block. TM: How do I know my cryptocurrency is safe? DO: You have a key for your wallet. When you create an account, you're given three things: an address, a public key, and a private key. You are responsible for, and the only one who has, your private key, so it is secure. TM: How do cryptocurrencies get their value? JH: The gold example is pretty accurate here too. Gold's value fluctuates based on supply and demand, or what someone thinks owning an ounce of it is worth. There can only be so much gold dug out of the earth. Each type of cryptocurrency functions in its own way like other assets, but to use Bitcoin as an example, you can't create more of it. Bitcoin runs on a mathe- matical algorithm that limits its supply and purposely makes it a scarce commodity that is less likely to cause inflation like printed money. Bitcoin is created when a new block is validated and added to the blockchain. Crypto can also be bought and sold like gold, or stocks or bonds by investors. TM: OK, so now that I understand how it works, I want to acquire some crypto- currency. How do I go about doing that? JH: There are a number of ways to acquire cryptocurrency. The first is mining, which again is validating transactions and being rewarded with some crypto for your efforts. You can also buy cryptocurrency from an exchange like Coinbase, or you can open a wallet through various vendors online, give someone your wallet address, and they can send you cryptocurrency. CRYPTO has only been around for about 12 years and has quickly become part of everyday conversation. TM: It sounds like there's a chance in the future that we won't need banks to track transactions anymore. JH: That is a long way away, but yes, open public blockchains could replace the need for banks to maintain their own ledgers of bank transactions and balances. Right now we trust banks to track our transactions and every month, people balance their check- books against their records. With the blockchain, we'd rely on the consensus of networks all over the world to keep the ledger in balance. TM: Why is everyone talking about cryptocurrency right now? Does it have benefits over a government-issued currency? JH: Yes, a few. Governments today control the money supply. In the last three years, the government has printed more than 30% of all dollars ever printed in the U.S. so the market is flooded with cash now, which adds to inflation. With a cryptocurrency like Bitcoin, there is no authority that can do that, making Bitcoin a potential hedge against inflation. Also, there are millions of people in the world who don't have access to a traditional bank account, but they almost all have a cell

• Cover