The very beginnings of the most widely known digital currency, Bitcoin, are veiled in mystery. Conceptualized and launched as an immediate response to the worldwide financial crisis in 2008, Bitcoin was the brainchild of Satoshi Nakamoto. The rallying cry behind it attracted a following of the tech-savvy and the bank-disgruntled: “Remove third parties, like the very institutions that fueled the collapse, from our personal transactions and give financial power back to the people.”
But to most of us, the whole concept of digital currency is still more ethereal than substance. At its most basic level, you cannot hold a digital coin as you can a nickel or a gift card. There are between 1,800 and 3,000 types of cryptocurrencies in use (it depends who’s counting and what day of the week it is). The vast majority of everyday businesses wouldn’t know what to do with Bitcoin and its offshoots, and to this day no one is even sure if Satoshi Nakamoto is a person, a group, a robot or, as some coders have suggested, an alien.
“Right now the cryptocurrency world seems like the wild west to a lot of people,” saysDamon Bryant ’04PhD.
“Right now the cryptocurrency world seems like the wild west to a lot of people,” saysDamon Bryant ’04PhD, who was the first graduate of UCF’s doctoral program in industrial and organizational psychology. “There are a lot of misgivings and that’s what I want to help clear upbecause I firmly believe that very soon digital currency will become as much a part of our lives as the internet.”
Keep in mind, it took Bryant himself more than four years to give a second thought to digital currency and blockchain technology (the decentralized digital record of each transaction). He first overheard a conversation about it in 2013 while doing consulting work for a major corporation. It wasn’t until he heard about it again last fall that he started to research this new age of financial transacting and to take it seriously.
“We haven’t had a change in currency since the early 1900s,” he says. “Everything is lined up for it to happen. The technology is there. The networking is there. The financial mess is still fresh enough to incentivize people to want something different. But at the same time there are some fixes to be made.”
Bryant and a team of international developers recently created a currency called LightPay Coin. He says LightPay Coin addresses at least two concerns people have with Bitcoin and its close relatives: the speed of verifying transactions and maintaining the anonymity of people making those transactions. Two months after launch, LightPay Coin was being used internationally and, according to Bryant, had a market value of 8 million. If you wonder “8 million what?” that’s either the point or the problem, depending on your cryptocurrency acumen. The value isn’t determined in a common denomination like a dollar — it’s determined by whatever value the currency or coin has at that time.
“To me, the currency and coins out there now are more like securities than actual currency,” says Honghui Chen.
Amid all the fluctuations and complexities, most agree on one absolute: If change isn’t upon us, it’s very near. Honghui Chen leads the financial technology (fintech) program at UCF and has devoted significant time researching the realistic applications of digital currency.
“It’s expected that many traditional jobs in the financial services industry will be replaced by employees with fintech skills,” Chen says. That belief has led UCF’s College of Business and College of Engineering and Computer Science to jointly develop a 30-credit-hour Master of Science in financial technology — believed to be the first in the State University System of Florida. In a press release, UCF said, “With a pool of well-trained employable FinTech graduates, Orlando and the UCF Research Park can attract FinTech startups, which will be beneficial to the local economy.”
So where does that leave us with the existing wave of cryptocurrencies today?
“To me, the currency and coins out there now are more like securities than actual currency,” says Chen. “As attractive as it seems to remove the third party from a transaction, we will need a party like the Securities and Exchange Commission to regulate some of the volatility.”
Bryant knows more progress needs to be made if digital currency is to be used as he imagines it, where you could make direct transactions as big as a house payment to the previous homeowner or as small as a golf wager to a friend. The biggest component yet to be built is a mental bridge for people who are reluctant to enter a virtual world of personal finance. The department that can help with that bridge? The same UCF psychology department from which Bryant earned his degree.
“What in this world is notaffected by how we behave? Behavior and ease of use are usually the keys to how a new concept is accepted,” says Kristin Horan.
“People might be surprised at [the psychology department’s] role in this, given UCF’s top-ranked engineering department and the reputation for R&D,” says Kristin Horan, research associate in the psychology department. “But think about it, what in this world is notaffected by how we behave? Behavior and ease of use are usually the keys to how a new concept is accepted.”
Several graduate students have formed an applied research group called “Performance Solutions” to apply knowledge from industrial organizational psychology to the development of user-friendly cryptocurrencies. They’ll work across other disciplines to look at everything from the ergonomics of using cryptocurrency to the public’s perceptions of it all. Horan says the project is not an academic exercise, but an opportunity to be part of a once-in-a-generation breakthrough. And what’s in it for Bryant, the innovator with the military background and the Ph.D.?
“I get the advantage of working with students and faculty who are smarter than me. They can give me insight into interactions that I wouldn’t otherwise have.”
With that kind of analysis, Bryant says he can eventually conduct the ultimate test with his mother. “If I can send her cryptocurrency and she can send it back, without calling me for help, then we’re onto something.”
Mystery solved. One step into the future, taken.
A new podcast called Is This Really a Thing with Paul Jarley, dean of the College of Business, launches September 12. One of the first episodes will discuss more about bitcoin and blockchain. Be sure to look for it.
