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What is Bitcoin and How Does Cryptocurrency Work? (A Primer)

Recently, Bitcoin, the most famous of the cryptocurrencies, has soared to all-time highs (Fortune, May 2017), increasing the amount of press attention and internet searches (Google Trends, May 2017) surrounding the little-known digital currency.  We’ve also heard this question from many of our users, “what is Bitcoin and what do my students need to know about cryptocurrencies”?  You are not alone!  83% of respondents in a 2015 survey conducted by PwC were “slightly familiar/not at all familiar” with cryptocurrencies (PwC, August 2015).

Image result for knowledge of cryptocurrencies remains limited

Although a complex topic, we will attempt to shed some light through this brief primer:

Cryptocurrency Explained in One Paragraph:  Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto.  Bitcoins [and other cryptocurrencies] can be used to buy merchandise anonymously.  Transactions are made with no middle men – meaning, no banks! There are no transaction fees and no need to give your real name. More merchants are beginning to accept them.  In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in value.” (CNN Money

What is Bitcoin (and how is it different from traditional currency)? Bitcoin and other cryptocurrencies, such as Litecoin, Ethereum, Zcash (Investopedia, 2017),  are digital, de-centralized, and verified currencies.

NGPF Podcast: Tim Talks To Teacher-Innovator Tara Kelley of Harwood Union HS (Vermont)

I had a great conversation recently with NGPF Teacher Innovator Award winner, Tara Kelley, a math teacher from Harwood Union High School in Duxbury, Vermont. Tara created a Spring Break Project (who doesn’t want to plan a spring break vacation?) which allowed her students to explore the cost of using a credit card to pay for their Spring Break vacation. They learned through this activity the impact that changing their monthly credit card payments has on the total interest paid as well as the importance of paying off a credit card balance in full every month. Enjoy!

Details:

What Is the Most Common Form of Non-Cash Payments?

Answer: Debit cards (by a long shot)

From Federal Reserve (hat tip to Big Picture Blog):

By |May 29th, 2017|Debit Cards, Payment Types|

Chart of the Week: What Are Your Two Favorite Platforms for Watching “Television?”

 

The answer to this question has budgetary implications given how the cost differential between the platforms. If you are a millennial, your top four platforms, based on a recent survey, are:

  • Netflix
  • Cable TV
  • Hulu
  • Amazon Prime

Hat tip to VisualCapitalist for this infographic: 

What Are We Watching? Three Of Our Latest Curated Videos

The NGPF Team is always scouring the web for videos to add to our Video Library. Here are the latest that the team has uncovered:

Pay Day 101: Direct Deposit (from Young Illinois Saves), duration of 3:48, provides a good description of how direct deposit works from the perspective of young adults:

What Percentage of IPhone Users Have Tried Apple Pay?

Answer (from WSJ): 13%

Back in 2014 (eons ago in the tech industry), we marked the launch of Apple Pay with a post that included several news summaries and the potential that Apple saw in the product. We had students analyze the stories and then answer that personal question “Would you use Apple Pay?” Apparently the answer for most IPhone users two years later is a resounding “No.”

Jessica also wrote a post in early 2015 asking the question “Can Teenagers Use Apple Pay?” Find out the answer here.

The article enumerates the reasons why the rate of adoption has not been faster:

Resource Lists for Financial Educators (courtesy of Barbara O’Neill of Rutgers Cooperative Extension)

What does a distinguished professor do during her sabbatical? Curate personal finance resources, of course! In this blog post, Barbara O’Neill shares the fruits of her hundreds of hours of labor in putting together three awesome resource lists (see bottom of post for links to her lists), including what what she considered the “best of the best” from the NGPF library. As she describes below, the purpose of her odyssey was to replenish her “well” of creative learning activities. I hope that your “well” overflows as you find resources that will work in your classroom. Thank you Barbara for this tremendous gift to the community! Your commitment and dedication to improving financial literacy in this country inspires us.

Chart: How Do Credit Card Companies Make Money?

Students need to understand the business models behind credit card companies as well as other financial service companies. Why? It provides a roadmap for consumers as to how they should use the financial product to AVOID becoming a profitable part of that business model. NerdWallet has a report out about credit card trends, which included this chart showing how credit card companies make money: