FinTech Job Market Remains Hot Despite Cryptocurrency’s Fluctuations

Last year’s Bitcoin boom thrust cryptocurrency into mainstream financial conversations. The buzz isn’t limited to banking, either. Blockchain, the underlying technology that makes anonymous money transfers possible, has potential to disrupt healthcare, supply chain and procurement, energy markets, real estate, and manufacturing. It has an application in literally every major industry vertical in the economy.

Mainstreaming a disruptive technology in the financial sector

It should not be unstated the breadth of blockchain development currently underway in fintech. As we’ve previously examined, fintech startups are burgeoning.

● The near-term challenge for software developers is linking legacy banking systems to cloud-based P2P networks. Technological inertia in the financial sector looms large, but there’s enough investment in cryptocurrency integration to move the needle.

● NYC and the Bay Area companies are duking it out for talent, which makes sense seeing as the former is the financial hub of North America, and the latter the capital region for tech innovation.

● High stakes mean high salaries. Companies are vying to create technologies that incorporate blockchain transactions in familiar places for consumers, and see the payoff as something only top talent can bring them. That, and many are flush with VC support. An engineer or developer with just a few years working with blockchain fetches well over $100K.

Different coins, different ledgers, same blockchain

Bitcoin is the first manifestation blockchain technology to approach mainstream. It’s not the only coin on the block, though. Etherium, Litecoin, and dozens of smaller currencies comprise the crypto space. A new buzzword in the community emerged in early 2018, The Flippening, which refers to unseating Bitcoin as the top cryptocurrency of record.

A few signs point to Ethereum as the next big cryptocurrency. One important factor is speed, specifically how fast Ethereum confirms ledger transactions compared to Bitcoin. Decrypting Ethereum—or “forging” as they say in crypto circles—takes about 14 seconds per confirmation, compared to 10 minutes or longer to confirm a Bitcoin transaction. When markets are volatile, a slow speeds costs investors value.

Another place where Bitcoin pulls up short, for now, is in micro-transactional payments. Moving Bitcoin costs money even when small values change hands. A $25 transaction might have $10 worth of fees—that’s good for miners, not so much for coin holders. This puts something like buying a coffee with Bitcoin off the table until the exchange develops technology that makes confirmation less resource-intensive.

Speed and transactional costs give the Ethereum platform a competitive advantage. The exchange uses blockchain validation, but operates the ledger system in a manner called state transitions. Here, account information and balances are not coded and unpacked on the blockchain; instead Ethereum uses a trie data structure for encryption. This is different from the block hashing algorithms that are present in Bitcoin transaction confirmations.

Proof of work vs. proof of stake

The security protocols are different. Bitcoin uses a “proof of work” (PoW) system, whereas Ethereum’s is a “proof of stake” (PoS) system. Without getting deep in the weeds comparing PoW with PoS algorithms, know that both are decentralized leger systems that involve distributed systems of verification—you don’t need a bank or third party to keep track of the accounting. A PoW system ‘rewards’ Bitcoin miners, who ‘solve’ blockchain transactions with power-hungry computer farms. There are no block rewards in a PoS system; instead “forgers” with the highest stakes in the currency do the computation to confirm it.

PoS is potentially a much greener, much faster method of running a distributed ledger. Profit doesn’t hinge on computational horsepower. A PoS system secures itself because those with the highest stake in the currency validate transactions; should they compromise the exchange, they stand to lose the most value. The math and programming—and human moral component intrinsic to it —are so new that the narrative is still shaking out.

It’s still unknown whether Ethereum and Bitcoin are competing or complementary technologies. Some propose that Bitcoin will remain the choice of politically and economically-conscious investors with an aversion to financial centralized power. Bitcoin would remain in place to counter central banking systems. The focus of the Ethereum community tends towards the technology’s future in business and financial applications.

Hot jobs in FinTech working with blockchain technology

At this point, labor demands of companies hungry for blockchain talent tend not to differentiate between PoS and PoW skill sets. Blockchain development hasn’t reached that level of nuance quite yet, and it’s unclear that it will insofar as development needs.

Jobs in blockchain development require a solid open source foundation, plus experience with distributed token systems Ethereum/Solidity, Stellar, Ripple, and Hyperledger. Distributed systems engineers remain one of the most sought-after technical roles in the fintech space. With a few years of experience working with Golang and C/C++, and consensus protocols and algos like Paxos, Raft, and ZooKeeper, a distributed systems professional can expect to start at around $150,000 annually.