Economics education

An Economics Education by Bitcoin – Part III

July 10th, 2017

There are a number of these Web-based Bitcoin wallets from which to choose, and they have different features, costs, and reputations to review and consider. Do you need merchant tools? Do you need currency exchange services? Do you need “cold” vault storage? Do you want multi-factor authentication? Whatever you need, there’s someone out there offering to provide it for you.

Once you’ve created an account and a wallet, how do you get Bitcoins? There are two obvious answers. First, if you already had money in one currency and wanted to convert it to a different currency, you could exchange it. Second, the same way that you sell goods or labor for your local currency, you can sell goods or labor for Bitcoin. I explored both of those options.

Bitcoin exchanges work similarly to traditional currency exchanges. There are competing firms with different appetites for various currencies, and they adjust their exchange rates accordingly. There are some with teller’s windows you can visit in person, and there are even automated ones, like ATMs, which accept currency, credit cards or Bitcoin, and dispense currency or Bitcoin. I prefer to perform my transactions online, so I researched the various online exchanges. At each, to buy Bitcoin, you must establish and fund an account and then place an order to buy or sell Bitcoin – and there’s a spread, just like securities. In these regards, it’s similar to a traditional brokerage account, but without the SIPC insurance. If the exchange gets hacked, shutters itself, or is otherwise compromised, your deposits could be temporarily inaccessible or permanently lost. This has already happened to a couple of Bitcoin exchanges, which reinforced my prior mental note to reevaluate my risks if my balances become significant.

Next I updated my business Websites to indicate that we accepted Bitcoin. I figured I could avoid the fees and the bid-ask spread if I could just get someone to pay for my goods or services at the spot price. Years later, having not earned a single Bitcoin, I returned to my study of exchanges.

If you’re not familiar with Level-II stock quotes or “depth” charts, it’s basically two lists. One list tallies and ranks in price order all the outstanding “buy” orders for a specified equity, showing the number demanded at various price levels; the other similarly ranks “sell” orders. When someone places a “market” order to buy ABC, the outstanding “sell” orders for ABC are matched in price order. Thus, if someone is selling 100 shares of ABC for $30 and someone else is selling 500 shares for $31, all 100 of the $30 shares will be consumed before a single $31 share will be sold on that exchange. Bitcoin exchanges work the same.

Mobile Education Is The Way Of The Future

July 2nd, 2017

For a nation to develop economically, education plays a very crucial role. The traditional means of providing education is where the students and teachers sit in the class and interact face-to-face with one another. The learning in this particular form takes the shape of group based learning wherein the teacher plays the crucial role. For students, their presence in the class and their participation in the group discussions are a part of the curriculum of the institution. The role of the teacher is not only of fulfilling the classroom schedules but also to assess and prepare the course materials.

Though there are many challenges, still the traditional means of offering education provides a unique opportunity to both teachers as well as students to communicate with their friends. As some of the children fail to go to the school because they are physically handicapped or live very far off from the school, they depend on other forms of education that reach a large target market. The challenges of the traditional methods are met by other teaching and learning forms like e-Learning and mobile learning.

Mobile education helps students gain knowledge and to attend the lectures at their own pace irrespective of their personal problems. In certain countries, mobile networks fail to offer adequate bandwidth and varied services can help in future mobile learning like transmission of high-quality graphics and live videoconferencing. The success of providing mobile education is entirely dependent on the growth of new generation networks and success of mobile devices that would be helpful in infiltrating the market in the near future.

There are many things that have to be improved in order to support mobile learning. The usability features like small size of the screen, higher expense to transfer data and bandwidth limitations are certain shortcomings of the mobile devices and due to these factors its usage is still very limited. The use of the mobile phones as a mobile learning tool is surrounded by these challenges. But these challenges are being taken care of gradually. The changes have been brought in the shape of the hybrid phones, PDA and smart phone technology that are aptly supporting the mobile learning today.

An Economics Education by Bitcoin – Part II

June 25th, 2017

The first Bitcoin wallets were integrated with the distributed systems which talked to each other to reach a consensus on transactions which had taken place. This consensus is called the “block chain.” Each transaction is recorded in the block chain, showing whose authority was used to transfer that value in Bitcoins, and which new authority controls them. Being distributed rather than centrally-controlled, the nodes hear about transactions through the proverbial grapevine and then compare notes, following a predetermined algorithm to settle discrepancies. As more nodes come to a consensus about the validity of a transfer, it becomes more indelibly recorded in the block chain. Since the block chain contains the entire recorded history of every transfer that was ever made of every Bitcoin that ever existed, it continues to grow, so streamlined wallets have been designed which store Bitcoin codes, but which are dependent upon third-party “full” nodes for verifying and recording transfers. These are ideal for mobile devices with limited resources, but are not limited to such devices. The choice between utilizing a full or a streamlined wallet is the first of many decisions a Bitcoin market participant has to face.

Full nodes consume more storage space, and they verify and record transactions for and from the network, which consumes bandwidth and processing power. Allocating these resources to Bitcoin functions reduces the efficiency of a computer for other purposes, but it is not without reward. Processing Bitcoin transactions, i.e., “mining,” can generate fees for the systems performing that processing, so given an efficient enough computer and an inexpensive source of electricity, it’s possible to actually earn a profit by operating a full node. There’s also the added reliability of being at the same tier as the other core systems in the Bitcoin network, rather than being one tier down, dependent upon another core system. While I initially thought that the advantages of running a core system outweighed the costs, I came to realize that there is a lot of competition in the field of mining, and that my value-line desktop computer was not going to make me rich by processing transactions. Ultimately, I also didn’t want to allocate its limited resources to running a core node.

Having come to that realization, the next thing I realized was that I might not want my Bitcoins tied to a wallet on my desktop computer. I mean, hey, I’m going to want to spend them wherever I am, right? Maybe a mobile app for my cell phone would be a good choice – I’d always have it with me. This, however, is where another weakness came into view. What if I lose or break my cell phone? Losing a cell phone with a mobile Bitcoin wallet is not like losing a credit card. You can’t simply obtain a prompt replacement – in this regard, it’s more like losing a wallet full of cash. If someone doesn’t return the “wallet,” your Bitcoins are gone.

As an interesting aside, there is a hard limit to the number of Bitcoins which will ever come into existence, so if a wallet is lost – or even if just the password to the wallet is lost – it’s possible for the Bitcoins contained therein to become permanently inaccessible. Since such accidents do happen, this means that Bitcoins will actually become more scarce, and thus, will experience long-run increases in purchasing power, unlike fiat currencies which are printed incessantly, and eternally buy less.

Anyway, not wanting to experience such loss and attendant disappointment, I needed a way to back up my mobile-based wallet. If I kept a copy on my home computer, it and my cell phone could both perish in the same house fire so I ultimately decided that a Web-based solution was the best choice for me. I can access it from my smartphone, from my desktop PC, or from an Internet cafĂ© wherever in the world I might find myself at any time. I trust a third-party to run a Bitcoin “core” installation, to perform backups, and to give me Web-based access to any number of Bitcoin wallets I might like to create. Some of the services they provide generate fees for them. In this regard, they’re something like a traditional bank account, holding your funds, executing transactions per your instructions, and possessing the ability to abscond with your money, but unlike a bank account, there is no FDIC insurance. Consequently, I’ve decided that this is a fine solution for storing small balances of Bitcoin, but I’ve made a mental note to reevaluate the risks should my balances become more significant.