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Posts Tagged ‘Finance’

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What is blockchain technology?

For the past several weeks, you’ve likely heard some of the following terms if you’ve paid attention to the world of finance: Cryptocurrency, Blockchain, Bitcoin, Bitcoin Cash, and Ethereum. But what do they mean? And why is cryptocurrency suddenly so hot?Bitcoin and Blockchain Financing Trend

First, we’ll explain the blockchain basics.

As society become increasingly digital, financial services providers are looking to offer customers the same services to which they’re accustomed, but in a more efficient, secure, and cost effective way.

Enter blockchain technology.

The origins of blockchain are a bit nebulous. A person or group of people known by the pseudonym Satoshi Nakomoto invented and released the tech in 2009 as a way to digitally and anonymously send payments between two parties without needing a third party to verify the transaction. It was initially designed to facilitate, authorize, and log the transfer of bitcoins and other cryptocurrencies.

How does blockchain technology work?

Blockchain tech is actually rather easy to understand at its core. Essentially, it’s a shared database populated with entries that must be confirmed and encrypted. Think of it as a kind of highly encrypted and verified shared Google Document, in which each entry in the sheet depends on a logical relationship to all its predecessors. Blockchain tech offers a way to securely and efficiently create a tamper-proof log of sensitive activity (anything from international money transfers to shareholder records).

Blockchain’s conceptual framework and underlying code is useful for a variety of financial processes because of the potential it has to give companies a secure, digital alternative to banking processes that are typically bureaucratic, time-consuming, paper-heavy, and expensive.

 

FILE PHOTO: Bitcoin (virtual currency) coins are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015. REUTERS/Benoit Tessier/File Photo

What are cryptocurrencies?

Cryptocurrencies are essentially just digital money, digital tools of exchange that use cryptography and the aforementioned blockchain technology to facilitate secure and anonymous transactions. There had been several iterations of cryptocurrency over the years, but Bitcoin truly thrust cryptocurrencies forward in the late 2000s. There are thousands of cryptocurrencies floating out on the market now, but Bitcoin is far and away the most popular.

How do you mine cryptocurrency?

Bitcoin, Litecoin, Ethereum, and other cryptocurrencies don’t just fall out of the sky. Like any other form of money, it takes work to produce them. And that work comes in the form of mining.

But let’s take a step back. Satoshi Nakamoto, the founder of Bitcoin, ensured that there would ever only be 21 million Bitcoins in existence. He (or they) reached that figure by calculating that people would discover, or “mine,” a certain number of blocks of transactions each day.

Every four years, the number of Bitcoins released in relation to the previous cycle gets reduced by 50%, along with the reward to miners for discovering new blocks. At the moment, that reward is 12.5 Bitcoins. Therefore, the total number of Bitcoins in circulation will approach 21 million but never actually reach that figure. This means Bitcoin will never experience inflation. The downside here is that a hack or cyberattack could be a disaster because it could erase Bitcoin wallets with little hope of getting the value back.

As for mining Bitcoins, the process requires electrical energy. Miners solve complex mathematical problems, and the reward is more Bitcoins generated and awarded to them. Miners also verify transactions and prevent fraud, so more miners equals faster, more reliable, and more secure transactions.

Thanks to Satoshi Nakamoto’s designs, Bitcoin mining becomes more difficult as more miners join the fray. In 2009, a miner could mine 200 Bitcoin in a matter of days. In 2014, it would take approximately 98 years to mine just one, according to 99Bitcoins.

Super powerful computers called Application Specific Integrated Circuit, or ASIC, were developed specifically to mine Bitcoins. But because so many miners have joined in the last few years, it remains difficult to mine loads. The solution is mining pools, groups of miners who band together and are paid relative to their share of the work.

Blockchains in Commercial Production at Scale

Current & future uses of blockchain technology & cryptocurrency

Since its inception, Bitcoin has been rather volatile. But based on its recent boom — and a forecast by Snapchat’s first investor, Jeremy Liew, that it would hit $500,000 by 2030 — and the prospect of grabbing a slice of the Bitcoin pie becomes far more attractive.

Bitcoin users expect 94% of all bitcoins to be released by 2024. As the number moves toward the ceiling of 21 million, many expect the profits miners once made from the creation of new blocks to become so low that they will become negligible. But as more bitcoins enter circulation, transaction fees could rise and offset this.

As for blockchain technology itself, it has numerous applications, from banking to the Internet of Things. In the next few years, BI Intelligence expects companies to flesh out their blockchain IoT solutions. Blockchain is a promising tool that will transform parts of the IoT and enable solutions that provide greater insight into assets, operations, and supply chains. It will also transform how health records and connected medical devices store and transmit data.

Blockchain won’t be usable everywhere, but in many cases, it will be a part of the solution that makes the best use of the tools in the IoT arsenal. Blockchain can help to address particular problems, improve workflows, and reduce costs, which are the ultimate goals of any IoT project.

 

 

Written By: Andrew Meola

 

alumni-notre-dame

alumni notre dameAlumni Couple makes $20 million gift to establish the Notre Dame Institute for global investing.

James Parsons and Dr. Carrie Quinn of New York City have made a $20 million gift to the University of Notre Dame to endow a new Institute for Global Investing in their alma mater’s Mendoza College of Business.

“This magnanimous gift will allow a cadre of superb finance faculty members at Notre Dame to advance their teaching and research to new levels,” said Rev. John I. Jenkins, C.S.C., the University’s president. “Jim and Carrie are distinguished graduates of the University, and we are most grateful for their wonderful generosity.”

The Notre Dame Institute for Global Investing is poised to advance investment-management research and educational outreach on a worldwide scale, according to Roger D. Huang, Martin J. Gillen Dean of the Mendoza College of Business.

“The Notre Dame Institute for Global Investing provides that vital nexus for research, the classroom, our alumni and other partners so that we can leverage all of it for a greater impact than the sum of its parts,” he said. “I’m confident that the institute will enable us to expand opportunities for our stakeholders — especially for our students — and become a significant thought leader in the global investment community.”

Scott Malpass, vice president, chief investment officer and a professor in Notre Dame’s Applied Investment Management (AIM) course, added: “I have known Jim since he was a junior at Notre Dame and have watched him become one of the finest money managers in the nation today. Jim and Carrie’s tremendous generosity will allow us to train the next generation of top-tier money managers imbued with the strong business ethics and principle-centered leadership that come from a Notre Dame education.”

The institute will leverage three key strengths of Notre Dame — top-rated finance faculty, an innovative finance curriculum and extensive strategic partnerships — to form a platform for both learning and influencing the way investment managers the world over think about global finance.

The institute’s goals include expanding internship and career placement opportunities; leveraging key partnerships among the college, the Notre Dame Investment Office and the University’s extensive alumni network; furthering faculty research and thought leadership; attracting prospective finance faculty; and adding depth and breadth to Mendoza’s already strong finance curriculum.

Shane Corwin, associate professor of finance, has been named as the inaugural director of the institute. A member of the Notre Dame faculty since 2000, he teaches and researches in the areas of security market design and investment banking. He has published articles in numerous finance journals, most recently studying the role of limited attention in securities trading, the measurement of transaction costs and conflicts of interest related to maker-taker fees on U.S. stock exchanges.

Corwin has served as a member of the Nasdaq Economic Advisory Board and has been awarded research grants from the Notre Dame Deloitte Center for Ethical Leadership, Morgan Stanley and the Q-Group. He earned a doctorate in finance from Ohio State University and bachelor’s and master of business administration (MBA) degrees from Mankato State University.

Parsons earned his bachelor’s degree in finance from Notre Dame and an MBA from Harvard University. He is founder and portfolio manager for Junto Capital Management in New York City and previously served as a portfolio manager for Viking Global Investors in New York.

Quinn is a graduate of both Notre Dame and Tufts University Medical School. She completed her pediatric residency at Boston Children’s Hospital. After working in private practice in Queens, New York, for six years, she is now an assistant clinical professor of pediatrics at Mount Sinai Hospital. In addition to seeing patients and teaching medical students, she is the executive director of the Mount Sinai Parenting Center, a not-for-profit entity created to support and educate parents in evidence-based parenting practices designed to help improve the health, resilience and well-being of children and families. The couple has three children.

“There has never been a greater need for outstanding leadership in the investment management industry,” Parsons said. “It has been a privilege to work together with the Mendoza College of Business, Scott Malpass, the Investment Office and other University leaders to form an institute that should enable the University to adequately address the need to educate the investment management leaders of tomorrow. The University is uniquely positioned to assist in the formation of leaders around the globe, and Carrie and I are delighted that our gift will help address this critical need.”

Quinn and Parsons made a $5 million gift in 2010 to endow the directorship of Notre Dame’s Boler-Parseghian Center for Rare and Neglected Diseases. They also have made gifts to their alma mater for a Donor Advised Fund, scholarship, the Applied Investment Management Alumni Endowment Fund and the President’s Circle.

 

Philanthropy Story ~ By Dennis Brown