The Rise of ‘Ether’ Signals Change for Financial Education

By Dan Kadlec

June 20, 2017

Digital Money changes Financial Literacy

If you don’t believe technology is changing everything about personal finance consider the meteoric rise of Ether, a virtual currency that is about to surpass Bitcoin in market value.

That’s right, Ether, a computer-code coin that almost no one has heard about is poised to overtake the granddaddy of digital money, Bitcoin. Fanatics on this subject are calling the event “The flippening.”

Why does this matter for financial educators? Well, chances are you are scratching your head about now. Ether? Flippening? What is going on?

Technology is moving into personal finance at the speed of light. Individuals do not need to know about Ether or Bitcoin to pay for college, or save for a home or retirement. But think of virtual currencies as the canary in the coalmine. Their rise serves as a warning as to how much things are going to change.

The value of Bitcoin is near a record high, according to report in The New York Times. Yet the upstart Ether is now at $34 billion—roughly 80% of the value of Bitcoin. That is up from 5% of the value of Bitcoin at the start of the year. The Flippening could happen any day.

One reason for the excitement is that Ether lives on its own network, known as Ethereum, which is being embraced by the likes of JPMorgan and Deloitte. This network is raising money through “initial coin offerings,” a play on “initial public offerings” that are common in the stock market.

Read all about it, if you like. It’s not that individuals need to know how to use or invest in digital coins. In fact, what they need to know at this point is that these are still dicey experiments. What happens to the value of Bitcoin if Ether’s momentum goes unchecked?

The real point is that financial tech-driven change is coming fast. It’s not all good. It opens the door to new-age scams. But if we can master the gadgets in our hands the payoff will be enormous. Tech is giving us the ability to save almost without knowing it and file insurance claims through apps. We can ask Alexa to transfer funds and offer investment advice.

Individuals will always need to be financially literate. When it comes to money, it’s important to understand the principles behind the apps. But it’s also important to understand that tech can make things easier—and that there is no turning back.

More on Tech and Financial Literacy:

With ‘Chatbots’ Will We Need Financial Education?

How Venmo is Changing Personal Finance

Cardless Cash Part of Financial Literacy Landscape

Saving Through Apps Isn’t Enough

Fintech Conference Changes Financial Education

 

Posted in Gadgets & Apps on June, 2017