PEORIA MAGAZINE October 2022

ECON CORNER

W elcome back to Peoria Magazine’s Econ Corner, a recurr ing feature in which we pose questions to experts about various economic issues and how they affect our lives and careers here in central Illinois. Doing this month’s Q&A is Jake Kinsey , director of the Illinois Business Consulting program at the University of Illinois’ Gies College of Business, the nation’s largest professionallymanaged, student-run consulting organization. He has longworked in the realmof emerging technologies. This conversation has been edited for length. Peoria Magazine (PM): Many people are familiar with the term "cryptocur rency" but aren't precisely sure what it is or how it works. Can you explain cryptocurrency, the blockchain tech nology behind it, and what gives this particular currency value? Can you buy things with cryptocurrency? Jake Kinsey (JK): Cryptocurrency is a technology that can be described as a form of digital money that does not require bank or government backing. The “crypto” refers to cryptography, a form of encryption that uses “value/

key pairs” to communicate. Other examples of value/key pairs we use in everyday life include usernames and passwords, and bank account numbers and signatures. In cryptocurrency, the value/key pair is called a “public key” and “private key.” The public key is like a … routing number that helps others transfer money to an account. The private key is an internal string of characters that acts as a digital signature, like on a check. When the public key and private key are encrypted together and sent to the blockchain, the blockchain can validate the transaction is authentic, kind of like a banker validating a check based on the signature … Blockchain is a decentralized digital ledger that records all account balances and transactions of cryptocurrencies and digital assets. The decentralization of the digital ledger means that a copy of the ledger is kept on each computer that participates in the blockchain network. To participate in the network, each computer must follow a set of rules that helps to ensure transactions added to the network are legitimate …

A Q&A with Jake Kinsey, Director of the Illinois Business Consulting Program at the University of Illinois’ Gies College of Business

INTERVIEW BY MIKE BAILEY

90 OCTOBER 2022 PEORIA MAGAZINE