FINTECH AND CRYPTOVALUTES
Instructional goals
The aim of this class is to provide a practical understanding of the digital transformation in the financial industry. The course will cover topics such as the blockchain technology, digital assets, fintech and AI with finance and business applications.
Intended learning outcomes
The students will work on case studies and white papers to acquire the fundamental concepts of cryptocurrencies, will identify opportunities for disruption in the financial services sector and will understand how technology will build better financial services firms.
Additional in-class experiential learning will include interaction with startups, entrepreneurs and industry executives to allow you to experiment with this technology.
Course Contents
The technology
Bitcoin
Other cryptocurrencies and tokens
The finance of cryptocurrency
NFTs
Bitcoin mining and scale up technologies
Staking and lending
Venture capital investing
Reference Books
For background information:
The Basics of Bitcoins and Blockchains, A. Lewis
Papers distributed in class
Teaching Methods
The students will have to discuss a team-based project (teams of 5 students each). The project will be based on the development of a new layer one technology or an application of blockchain technology in the financial markets.
Assessment Method
For attending students, discussion of team-based project. For attending students, class participation is fundamental.
For non-attending students, written exam based on the reading list of the course.
This course has a pass/fail grading.
Thesis assignment criteria
Academic performance and quality of the proposal
Week 1
The technology
Blockchain
Proof-of-work
Hash
Bitcoin
Week 2
Other cryptocurrencies and tokens
Ethereum
Proof-of-stake
Solana
Meme coins
Week 3
A finance perspective on cryptocurrencies
Liu and Tsyvinski (RFS)
Liu, Tsyvinski and Wu (JF)
Week 4
Arbitrage and trading in cryptocurrency markets
Makarov and Schoar (JFE)
Borri and Shakhnov (RAPS)
Week 5
NFT and digital property rights
Borri, Liu, Tsyvinski and Wu
Week 6
Fintech and business cases
Week 7
AI in finance
Week 8
Bitcoin mining and scale up technologies
Overview of the main metrics: hash price, hardware type, energy efficiency, profitability metrics
Business Models: Hosting vs Self Mining.
Unit economics and financial modeling (IRR, Payback Period and Sensitivity Analysis).
Lightning Network, payment channels and decentralized node infrastructure.
Week 9
Staking and Lending
Staking as an alternative asset class
The risk-free rate, lockups, staking ratio and liquid staking
ROA and financial modeling
Building Fixed income strategies
Week 10
Venture capital investing
Blockchain investment landscape
Token vs Equity investment strategies
Major investment trends and key ecosystem players
Week 11
In-class presentations
Week 12
In-class presentations