Top Stories
Top Stories

How business schools teach cryptocurrencies

Martin Arnold
Bitcoin web trading screen
Luis Tato | Bloomberg | Getty Images

David Yermack is a man in great demand. In 2014, the professor of finance at the NYU Stern School of Business helped it become the first major university to launch a course in the nascent field of blockchain and cryptocurrencies.

Since then the course has taken off and as well as teaching it in New York, Prof Yermack now travels the world as a visiting professor to lecture on the fast-moving field of cryptocurrencies at universities in Amsterdam, Rotterdam, Basel and Stockholm.

"I attended some events in New York and there was huge demand for people trained in the compliance and tax aspects of cryptocurrencies and blockchain, so we set up the course in 2014, the first of its kind," he says. "Since then it has taken on a life of its own."

Receive 4 weeks of unlimited digital access to the Financial Times for just $1.

Blockchain is a shared ledger technology that powers cryptocurrencies such as bitcoin, the value of which recently rose above $10,000, up almost 13 times in the past year.

The technology allows encrypted data on anything, from money to medical records, to be shared between many companies, people and institutions. This protects data from fraud while instantly updating all parties concerned. Experts say the demand for expertise is coming from all sectors — from financial services to retail — and it is far outstripping supply.

"It is a fast-moving topic with tokenomics and cryptocurrencies changing whole industries," says Oliver Bussmann, former chief information officer at the Swiss bank UBS who now advises blockchain start-ups. "The more people can learn about it and what potential it has, the more understanding they will have of what financial services will look like in five years."

Big companies have steered clear of bitcoin, fearing its links to fraud and criminality. But now they see vast potential in the underlying technology to improve the efficiency of everything from tracking food products to processing financial transactions.

Jamie Dimon, chief executive of JPMorgan Chase, summed up the mood of big business last month by describing bitcoin as "a fraud", while also saying: "Blockchain is a technology that is a good technology. We actually use it. It will be useful in a lot of different things."

Prof Yermack at NYU Stern says blockchain technology "is really changing every industry". Describing its potential as "probably as important as the introduction of double-entry bookkeeping", he says there is "enormous student interest for this, for the jobs it offers".

The NYU Stern cryptocurrencies course had a few dozen students when it started out. That has now grown to more than 100 students this year, with a waiting list, and as many as 300 expected next year. "We are moving it to our largest auditorium, with capacity for 350 students," he says.

The subject matter is so fast-moving that it is hard for academics to keep up. Prof Yermack says the advent of "initial coin offerings", which have allowed blockchain-based companies to raise more than $2bn this year, forced him to rewrite much of the syllabus this year."

Year over year we'll change well over half the course material," he says. "It keeps you young to be reading half the night just to keep up with the latest innovations."

NYU Stern, which charges MBA students more than $70,000 a year and undergraduates more than $50,000, is planning to launch an undergraduate course in blockchain and cryptocurrencies. But like many universities it is running into a shortage of teachers. "Our biggest challenge is finding enough people to teach the courses," says Prof Yermack.

Stanford University launched a bitcoin and cryptocurrencies course two years ago, but it stopped this year after losing some key staff. Joseph Bonneau left Stanford to join NYU Courant, where he teaches a blockchain course as part of its computer sciences faculty."

I'm pretty sure that every university will have a blockchain course in five years," he says. "More institutions would like to teach it now, but it's a question of having a professor around to do it."

The rapid spread of blockchain courses is being driven by the red-hot jobs market in the sector, with the best engineers in the field commanding a starting salary above $250,000.

Jens Martin, programme director at the University of Amsterdam, says that after its new blockchain and cryptocurrencies course became the most popular module on its international finance masters this year it plans to add a second, more practical, course on the subject next year.

Chris Knoll left a job as an equity analyst in South Africa to take the course in Amsterdam and soon after graduating this year he got a job at a private equity group in the Dutch city.

"I don't have the computer programming background to make it in fintech, but I'm really interested in it and if ever an opportunity came up in that area I'd take it with both hands," says the 28-year-old. "Blockchain is going to change the world."

"There is a big demand for computer science students that have a good understanding of blockchain right now," says Aggelos Kiayias, chair in cyber security and privacy and director of the blockchain technology laboratory at the University of Edinburgh, which launched a cryptocurrency course this year. "It serves as a very nice use case that the students can apply in a lot of other domains, like cyber security."

There are already scores of internet tutorials, many of them available free as massive open online courses (Moocs). Coursera, an education-focused tech company, has joined with Princeton University to offer an 11-week online cryptocurrency technologies course.

At the other end of the spectrum is B9lab, a fee-charging institution based in London and Hamburg offering a 40-hour online course in blockchain for technical executives and analysts spread over nine weeks at a cost of €2,350.

Elias Haase, co-founder of B9lab, says demand for the course has been steady, if unspectacular, with about 40 people expected to take part this year. But he expects interest to grow, saying: "There is definitely a disconnect between the willingness of companies to invest in talent and the amount of money being raised in the system, which will eventually have to be rectified."

More from the Financial Times:

Bitcoin passes $11,000
Drivers and risks of the cryptocurrency boom

Pound and gilt yields rise on hopes of Brexit breakthrough

Related Tags