FINTECH AND CRYPTOVALUTES

FINTECH AND CRYPTOVALUTES

Nicola Borri, Fiorenzo Manganiello

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