22 ms·

Announcing the MIT Bitcoin Project

328 points by jordn 12y ago

chill1 12y ago
> "Two MIT students have raised half a million dollars for a project to distribute $100 in bitcoin to every undergraduate student at MIT this fall." > "The organizers admit they do not know how students will decide to use their bitcoin. However, they plan to use the time between now and when the bitcoin is distributed to build up the Bitcoin ecosystem at MIT." I've been waiting to hear about the next phase of bitcoin development; beyond exchanges and marketplaces. What would be the easiest way to keep tabs on the bitcoin projects at MIT? Is there a publicly accessible message board for this project? Edit: Reorganized this post a bit. Didn't mean to side track so much from the content of the article. Side note: Please stop hijacking the native browser scrolling. I don't know if it's because I ate guláš for lunch, but the custom scroll effect on this site makes me feel nauseous. Additionally, the site doesn't work at all without JavaScript. Why? The site could probably very easily be built to static HTML files for faster load times, decreased load on the server(s), and wouldn't require JavaScript to render views.
- marlin 12y ago
  Dont understand your issue. the only javascript served by this page should be <script type="text/javascript"> function byId(id) { return document.getElementById(id); } function vote(node) { var v = node.id.split(/_/); // {'up', '123'} var item = v[1]; // hide arrows byId('up_' + item).style.visibility = 'hidden'; byId('down_' + item).style.visibility = 'hidden'; // ping server var ping = new Image(); ping.src = node.href; return false; // cancel browser nav } </script> for the <a> links, as such: <a id=up_7666264 onclick="return vote(this)" href="vote?for=7666264&dir=up&xxxx"> and this makes it surely works correctly even without javascript.
  - nikentic 12y ago
    Did you make that up? There's like 10 jquery plugins loaded in the bottom of the body, including jquery.nicescroll
    - marlin 12y ago
      No, i misunderstood OP, thought he meant HN, due to his wording.
    - areagle 12y ago
      Removed most of these. Sorry about that.
  - joshstrange 12y ago
    Marlin, I believe he is talking about the linked page not the HN page.
    - marlin 12y ago
      Ah, i didnt realize that by the wording of OP. also, thx someone for downvoting a helpful attempt. i see the cancer found HN also
  - deleted 12y ago
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- deleted 12y ago
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- blueskin_ 12y ago
  >Please stop hijacking the native browser scrolling. I don't know if it's because I ate guláš for lunch, but the custom scroll effect on this site makes me feel nauseous. Additionally, the site doesn't work at all without JavaScript. Agreed. The custom scrollbars are awful too. I wish browsers had a way to prevent certain things from being overridden (scrolling, right click, scrollbars, keyboard shortcuts) on a user configurable basis.
  - unfamiliar 12y ago
    Plus it kills swipe-to-go-back in Safari.
  - areagle 12y ago
    Fixing this right now. Sorry about the annoyance!
- mhaymo 12y ago
  Addendum to sidenote: the site also overrides Ctrl+PgUp/PgDn, which is highly frustrating.
- rlpb 12y ago
  > Please stop hijacking the native browser scrolling. Or just stop hijacking my browser. Why do I need Javascript to read an announcement?
eliaskg 12y ago
This is great news for the community (and for the students)! I wonder if MIT is actively investing in coins or using pre-mined ones.
marlin 12y ago
Students get 100$ each for silk road shopping, damn!
- mootothemax 12y ago
  Students get 100$ each for silk road shopping They might also get a nasty lesson in the traceability of BTC, depending on how the BTC's distributed to them.
  - marlin 12y ago
    swap BTC for LTC. swap LTC for other BTC's, win.
    - ISL 12y ago
      Traceable through two blockchains, lose.
      - kylebrown 12y ago
        But only traceable by people who have access to the BTC/LTC exchange's database.
deleted 12y ago
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hessenwolf 12y ago
So, half a million dollars to raise the demand for bitcoin, while, as ever, the supply remains roughly the same. Gosh, I wonder why governments like to maintain a flexible money supply? I am not saying that that is the intention of the organisers. I am just postulating it as a thought experiment, on one of the downsides of having a fixed money supply. Not that there are not also upsides. But there are also downsides.
- jzwinck 12y ago
  If the supply of the currency were inflated to "print" money to give to MIT students, people would rightly protest. It would be a simple wealth transfer from the overall population of currency holders to a small group of students who are already some of the most highly advantaged people alive in the world today. One purpose of this project is clear: to promote Bitcoin (or cryptocurrencies generally). The value of Bitcoin is higher since this announcement was made, regardless of what the price is.
- baddox 12y ago
  That's a tired old criticism of Bitcoin. The creators of Bitcoin are well aware that they're basing the currency on financial principles not accepted in mainstream economics.
  - hessenwolf 12y ago
    It might be old, but money supply is far, far from a tired issue, whether with respect to bit coin, or to fiat currency.
downandout 12y ago
Perhaps I'm wrong but wouldn't it make more sense to actually just use the open source Bitcoin software to create their own altcoin......perhaps call them Mitcoins? They could give the initial, easily mined Mitcoins away to students, and spend the $500K on promoting it as a viable altcoin and getting the major exchanges to add it to their trading mix. With the credence lent to it by MIT, it would stand a far better chance of success than other altcoins, and the students that keep their initial coins would likely wind up with far more than $100. This just kind of seems like they are squandering the $500K, and are completely ignoring their greatest asset: their association with MIT. That name carries alot of weight with the type of people that buy these currencies.
- yincrash 12y ago
  Because this way they can trade each other bitcoins for goods. If they just gave everyone mitcoins, they would be worthless for a while, and most of the students wouldn't care to even use them.
  - kylec 12y ago
    When I went to college, we could use our ID cards to pay for printing, meals in the student union, etc. If MIT did something similar and accepted "Mitcoins" for transactions done on campus, they would give the currency an inherrent value.
    - jlev 12y ago
      There is already a TechCash system for making purchases with an MIT student ID. All the on-campus food vendors accept it, as well as the student bar. No need for crypto-currency, there's already a functioning local system.
      - hayksaakian 12y ago
        they could pin the value of the techcash currency to the USD/BTC rate
- 12y ago
jonrimmer 12y ago
Can't believe they didn't call this "MITcoin".
quantabytes 12y ago
It would be really interesting if the organizers recorded and tracked the Bitcoins that are distributed in this way using the block chain. It could be a financial parallel to the MIT Reality Mining dataset: http://realitycommons.media.mit.edu/realitymining.html http://realitycommons.media.mit.edu/realitymining.html
dlss 12y ago
This is very interesting. Having that many people all holding BTC will have a bootstrapping effect around MIT. The three obvious effects are: 1. stores near campus will (probably) start supporting it 2. the black market on campus will (surely) start accepting it 3. Some undergraduates will invent things using it I think #1 and #2 are more interesting by far than #3... I can't wait to see what happens when BTC and USD are even vaguely on the same footing in a geographic area.
- leorocky 12y ago
  > the black market on campus will (surely) start accepting it This made me guffaw. The black market on campus? Would that be the Hob where Katniss Everdeen sells her poached turkeys while the corrupt Capitol police look away? Are Jay and Silent Bob behind the campus bookstore selling blunts, stolen books and test answers? Is there a darknet on campus accessible only to Angelina Jolie style hackers? Maybe you meant some kind of informal marketplace on campus where people buy and sell drugs and stolen merchandise but I don't think such a place exists on MIT. It's mostly hard working students trying to make it through school. I think you've been watching too many movies. Edit: I'm totally ok with this comment being downvoted, I would have downvoted it myself, but I couldn't resist.
  - mcintyre1994 12y ago
    Ha, isn't alcohol illegal for under 21s, AKA most college students? I'd be stunned if there isn't a way to buy drugs on campus too.
    - leorocky 12y ago
      Yes it's probably a tiny minority who buy it through off campus drug dealers and friends. Such as there are drug dealing trends, they will happen across MA, New England and the general area and will happen regardless of bitcoin experiments at MIT. I'm rolling my eyes at this notion of a single purpose black market, hidden in the depths of the halls of MIT, the ire of faculty and administrators alike. It's such a silly idea. Might make a great young adult novel plot though.
ScottWhigham 12y ago
Two MIT students have raised half a million dollars for a project to distribute $100 in bitcoin to every undergraduate student at MIT this fall.... The bulk of funding for the project is being provided by MIT alumni with significant additional support from within the Bitcoin community. The total of over $500,000 already pledged will cover the distribution of bitcoin to all 4,528 undergraduates I guess I don't understand the "Why?". MIT kids are among the most elite already - why would people donate $100 to each student for that student to spend as he/she wishes? It's an honest question. As a company owner, why would you do this? What would be the benefits you would expect to see? I am clearly missing the "Why?" here. How would you feel if, after this first year, you found that 50% of the kids never did anything with the BTC? Or if 50% of the kids gave their BTC away to another student for nothing? An interesting thing to see at the end was how many students ever logged in to set up an account, or even check their balance. The funding covers less than $50,000 for anything else - $452,000+ will go directly to the students. That leaves less than $50,000 to cover the administration, the distribution, and the education (a big part). If they get the education part wrong, it will have wasted a huge chunk of the $452,000.
- roymurdock 12y ago
  The "people" who are donating are MIT alumni and the Bitcoin community. Both have clear incentives for Bitcoin adoption at MIT. MIT alumni - A degree from MIT is prestigious because of the amazing work the community does in creating and developing emerging technologies. Alums had the chance to work on similar projects in their day. They want to put the intelligence of the next generation to work. It's an investment in the future. Bitcoin Community - Bitcoin needs to be trusted in order to be widely adopted. If a prestigious institution is putting a lot of brainpower into developing the infrastructure of the payment network, it well lend credence to the entire scheme and provide a great test case for a USD-Bitcoin integrated economy. MIT students are smart; they will do something with the Bitcoin, even if they do just sell it for the $100. If you were given $100 would you give it away? I don't think so.
- lnanek2 12y ago
  I think Google similarly gives employees some amount of ad spend just to get them more knowledge and buy in of the system. Not unreasonable for large BTC exchanges to want to pay to bring in users like this. May even be more cost effective than ads for bringing in lifetime users worth quite a bit.
3pt14159 12y ago
When I first read the title I thought that MIT was going to set up a large mining project, partially as a research piece, and partially to counter balance the very large mining pools that are risking the 51% attack. Which I was very excited about. This is cool too though.
- roymurdock 12y ago
  "It is often asserted (for example, in the Bitcoin white paper [22]) that a cartel can double-spend Bitcoins. In a strict sense, this is true: a cartel can spend a Bitcoin by paying it to a player Alice, receiving goods or services, and then shifting the consensus choice of history to a branch where that coin is instead paid to a different player Bob. However, we argue that double-spending by a cartel has a limited payoff. Bitcoins have value because people are willing to trade them for goods and services. If players were unwilling to accept Bitcoins for trade or unwilling to spend Bitcoins for fear of having their payments nullified, the value of Bitcoins would diminish significantly as players lost confidence in the system. Worse, because players are encouraged to generate a new identity for each transaction and because identities are not linked to any side information, players cannot easily determine whether a proffered payment is coming from the double-spending cartel or an honest user. Thus, a rational player should refuse to accept any payments when there is a significant threat of double-spending. As a cartel must outmine the entire Bitcoin network and thus outspend the entire Bitcoin network for as long as it would remain a cartel, we believe it is very unlikely that a cartel could double-spend enough to recover the cost of the attack." - The Economics of Bitcoin Mining in the Presence of Adversaries (11-12)
  - dragonwriter 12y ago
    This presumes that the only reason a double-spend cartel would exist would be to make a direct profit from double spending, rather than, e.g., being sponsored by an entity whose financial or other interests were threatened by the viability of bitcoin and who thus wanted to undermine trust in bitcoin (to, perhaps, make a profit outside of bitcoin) rather than profiting directly through double spending. When you consider that motivation, the trust factor cited in that critique as making a cartel attack less viable based on how undermining trust in bitcoin also undermines the ability to make a direct profit by double spending is irrelevant (or, rather, illustrates exactly why a double-spending cartel may be attractive to a bitcoin-hostile entity that wants to undermine trust in the bitcoin system.)
netcan 12y ago
I once read some account or theory of akkadian proto-currency. Market officials would issue clay coins stamped with a pictogram in exchange for goods like cattle or wine. These coins could be exchanged in the market and then would be be cashed in for the goods at the exchange. At that point the coin would be smashed. I guess more durable goods like wine could be stored long term in the exchange and the coins could function as a medium of exchange. You could do something similar with bitcoins that might be fun on a campus. A trusted bank-like-thing issues clay coins that can be smashed to retrieve the private keys. It might be nice to be able to go from digital back to clay from time to time. It would be interesting to see if they trade at current bitcoin prices, how many get smashed, etc. It also adds a layer of anonymity that can be seen and understood by non tech savvy folks.
- moheeb 12y ago
  I'll give this idea away for free... Bitcoin Lottery. You buy fortune cookies.
uptown 12y ago
I've read the technical docs for bitcoin, but something I still don't comprehend. With a distributed network like Bitcoin, how does the initial network get started? How do the first 2 or 4 or 12 nodes of a network find one another?
- unreal37 12y ago
  Satoshi posts a link to the software to a cryptography forum, and gets 2-3 other people to download it and try it.... and then people begin to dream of the possibilities...
  - uptown 12y ago
    Right - but how do those first nodes "find" one another from a technical / networking / communication standpoint? Edit: I'll answer my own question. Apparently the current method is to use DNS seeds. Known relatively-permanent node addresses are hardcoded into the client software in order to enable initial connectivity to the network. Once they achieve this initial connection, they're able to obtain additional addresses from the nodes already operating on the network. After this initial network connectivity is achieved, the addresses are saved, so upon relaunch re-connect attempts are made to the database of previously found nodes. If these fail, then you fallback to the DNS seeds to start the process over. IRC used to previously be the communication network used to initiate the client connectivity, but this has been deprecated since the network is now more self-sufficient. https://en.bitcoin.it/wiki/Satoshi_Client_Node_Discovery https://en.bitcoin.it/wiki/Satoshi_Client_Node_Discovery http://stackoverflow.com/questions/19956088/how-do-two-bitcoin-clients-discover-each-other http://stackoverflow.com/questions/19956088/how-do-two-bitco...
    - nwh 12y ago
      That's completely correct. In order the node tries it's inbuilt knowledge of the network, the falls back to DNS seed nodes to discover peers, then falls back to hardcoded nodes if all of those fail. If no single peer can be contacted the node is dead in the water, and needs manual intervention to help get bootstrapped.
patcon 12y ago
I like the premise, but it's pretty evident that MIT will then have the highest concentration of naive Bitcoin users on the planet. Not sure what sort of folks might notice this and focus nefarious efforts there...
stevewilhelm 12y ago
> a project to distribute $100 in bitcoin to every undergraduate student at MIT this fall. They probably should have studied how habits are formed. $100 is not enough money to change people's shopping behavior. It will more likely provide the vast majority of the students a frustrating first impression of digital currencies.
- wyager 12y ago
  >$100 is not enough money to change people's shopping behavior. It's about getting them interested, not necessarily changing their behavior long-term.
twoodfin 12y ago
If you wanted to spend $500,000 to encourage the emergence of bitcoin in a "market" like MIT, I think it would be more productive to use the USD like a traditional subsidy: Pay MIT merchants to offer discounts on BTC-based sales. If I'm spending $40/week at LaVerde's, a 10% discount might be enough to get me to convert a few hundred dollars of my own money into BTC. As it is, the project will have to deal with getting merchants set up to accept BTC anyway, and my bet is that most students will be content to sit on their BTC hoping for another price spike rather than go through the trouble of learning how to use it for everyday transactions.
- dmix 12y ago
  That sounds just like a typical boring government subsidy. This is more akin to a large scale academic experiment. Economics should always be treated like experiments, rather than some attempts at top down market manipulation, ala subsidies.
  - hayksaakian 12y ago
    a bitcoin subsidy has the side effect of requiring to actually use and spend bitcoin. a USD subsidy is just a discount you might receive without even realizing it.
- patcon 12y ago
  Seeing whether the students sit on it is likely valuable data that is part of what they're trying to understand :)
  - pmorici 12y ago
    It would be beneficial to Bitcoin if more people were to buy some and sit on it. Right now the market cap is only around 5 Billion. If BTC is going to realize the promise of making transactions easy then the total market cap needs to be large enough to absorb large buys and sells w/o causing huge movements in the price.
    - 12y ago
platz 12y ago
Will they be able to avoid the same fate that happened to auroracoin?
- mcintyre1994 12y ago
  It seems harsh to downmod this, I don't think it's a troll? Auroracoin was a new coin technically independent of all the others, with its own blockchain. That was the problem - there wasn't enough mining power to secure its blockchain. In this case, these are just normal Bitcoins - secured by the enormous hashing power of that blockchain.
  - platz 12y ago
    Ah, I misunderstood - I thought they were getting their own coin. If it's just bitcoins then it's not an issue.
13throwaway 12y ago
This is a really good idea. Everyone knows everyone else has 100 more dollars in their pocket, and the smart kids will come up with business ideas to collet the bitcoins.
gesman 12y ago
I launched free Wordpress plugin allowing anyone to build online store that accepts bitcoins (along with dollars) for physical and digital goods: http://wordpress.org/plugins/bitcoin-payments-for-woocommerce/ http://wordpress.org/plugins/bitcoin-payments-for-woocommerc... Advantages: - 100% proceeds goes to you (no middleman service). - 100% secure and hack proof - impossible to lose bitcoins even if everything on your store is hacked. It utilizes Electrum Master Public Key logic that generates receive-only addresses without need of any private keys. - 100% free (wordpress + WooCommerce + bitcoin plugin - all free) With more people getting access to bitcoins - it's the right time to offer it as a payment method as well. Enjoy!
bdcravens 12y ago
I wonder how many will turn around and blow it in 5 minutes on just-dice?
jebblue 12y ago
MIT joins the Bitcoin Ponzi scheme.
- baddox 12y ago
  A Ponzi scheme is an investment operation where the founder pays returns to initial investors with the funds from new investors, and fraudulently keeps this fact from investors. So Bitcoin is not a Ponzi scheme.
  - patmcc 12y ago
    It may, however, be a pyramid scheme, where early adopters can only profit by getting others to invest at ever-higher prices. History will either record Bitcoin as a currency or a pyramid scheme, and anyone who says they're sure which one it'll be is either a fool or a liar.
    - baddox 12y ago
      Yes, but only in the same sense that every currency that has greater face value than the value of its physical ingredients is a pyramid scheme.
      - jebblue 12y ago
        The US dollar is backed by Americans. A bit coin is backed by who?
        BrokenPipe 12y ago
        Earthians, gaians, world citizens ;) Including me.
        vbuterin 12y ago
        Bitcoin users. Which is a larger population than that of many countries that have national currencies.
        12y ago
gojomo 12y ago
Part of me is hoping this is a Caltech prank, and when the MIT students try to redeem their "bitcoins" they just find some obscene taunt left for them inside the blockchain.
syntheticnature 12y ago
Both the announcement and the comments here focus on the amount in USD. When will (the majority of) that half-million USD be converted to BTC? (Via exchange? Via swap with an individual or entity holding a bunch of coins? Nice way to hedge liquidity if you've got the BTC.) What does it say that it isn't already done, and that it wasn't "each MIT student will receive 0.2 BTC" (or whatever a recent exchange would be for $100)? There is probably more information available without having to contact those organizing it, and the article was written for media press-release ingestion, but I'm surprised to see no comments on these facets here (at the time of writing, and HN seems to be acting up a touch so I've been trying to submit for a bit after I wrote this).
- nhaehnle 12y ago
  My bet is that the vast majority of those funds has been in the form of BTC for a long time, and a large part has always been in the form of BTC. Think about it: You're sitting on a large BTC mining fortune, and you've been watching the price of BTC slowly but surely decline over the last few months. What do you do? Pooling your BTC with others to fund something like this in the hope that it will cause the price to go back up again in the longer term sounds like a really good investment if you're in this situation.
kolev 12y ago
I have a lot more than $100 in BTC and the only good use so far is speculation. With $500K, they should've funded a Bitcoin project hackathon instead and get some fruit at the end.
panon 12y ago
Prediction: Students will a) Buy drugs on the internet. b) Exchange for $ asap. c) Sit on it and probably forget/lose it.
tmalsburg2 12y ago
This initiative reminds us painfully that Bitcoin still hasn't found its kill application (apart from Silk Road). If it had, they wouldn't have to give away BTC for free but these MIT students would queue up to buy BTC.
agalaria 12y ago
This will definitely help bitcoin to grow as more people get involved with it but it will also create lot of problems like black market will get attracted, stealing of coins will start. Yes, this move is required but everyone involved needs to careful.
ragis 12y ago
http://cryptocurrencylive.com/newest http://cryptocurrencylive.com/newest Crypto Currency Live is a social news and blog aggregator for Bitcoin, Altcoin and Crypto Currency Mining

328 points by jordn 12y ago

> "Two MIT students have raised half a million dollars for a project to distribute $100 in bitcoin to every undergraduate student at MIT this fall." > "The organizers admit they do not know how students will decide to use their bitcoin. However, they plan to use the time between now and when the bitcoin is distributed to build up the Bitcoin ecosystem at MIT." I've been waiting to hear about the next phase of bitcoin development; beyond exchanges and marketplaces. What would be the easiest way to keep tabs on the bitcoin projects at MIT? Is there a publicly accessible message board for this project? Edit: Reorganized this post a bit. Didn't mean to side track so much from the content of the article. Side note: Please stop hijacking the native browser scrolling. I don't know if it's because I ate guláš for lunch, but the custom scroll effect on this site makes me feel nauseous. Additionally, the site doesn't work at all without JavaScript. Why? The site could probably very easily be built to static HTML files for faster load times, decreased load on the server(s), and wouldn't require JavaScript to render views.

marlin 12y ago
Dont understand your issue. the only javascript served by this page should be <script type="text/javascript"> function byId(id) { return document.getElementById(id); } function vote(node) { var v = node.id.split(/_/); // {'up', '123'} var item = v[1]; // hide arrows byId('up_' + item).style.visibility = 'hidden'; byId('down_' + item).style.visibility = 'hidden'; // ping server var ping = new Image(); ping.src = node.href; return false; // cancel browser nav } </script> for the <a> links, as such: <a id=up_7666264 onclick="return vote(this)" href="vote?for=7666264&dir=up&xxxx"> and this makes it surely works correctly even without javascript.
- nikentic 12y ago
  Did you make that up? There's like 10 jquery plugins loaded in the bottom of the body, including jquery.nicescroll
  - marlin 12y ago
    No, i misunderstood OP, thought he meant HN, due to his wording.
  - areagle 12y ago
    Removed most of these. Sorry about that.
- joshstrange 12y ago
  Marlin, I believe he is talking about the linked page not the HN page.
  - marlin 12y ago
    Ah, i didnt realize that by the wording of OP. also, thx someone for downvoting a helpful attempt. i see the cancer found HN also
- deleted 12y ago
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deleted 12y ago
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blueskin_ 12y ago
>Please stop hijacking the native browser scrolling. I don't know if it's because I ate guláš for lunch, but the custom scroll effect on this site makes me feel nauseous. Additionally, the site doesn't work at all without JavaScript. Agreed. The custom scrollbars are awful too. I wish browsers had a way to prevent certain things from being overridden (scrolling, right click, scrollbars, keyboard shortcuts) on a user configurable basis.
- unfamiliar 12y ago
  Plus it kills swipe-to-go-back in Safari.
- areagle 12y ago
  Fixing this right now. Sorry about the annoyance!
mhaymo 12y ago
Addendum to sidenote: the site also overrides Ctrl+PgUp/PgDn, which is highly frustrating.
rlpb 12y ago
> Please stop hijacking the native browser scrolling. Or just stop hijacking my browser. Why do I need Javascript to read an announcement?

eliaskg 12y ago

This is great news for the community (and for the students)! I wonder if MIT is actively investing in coins or using pre-mined ones.

marlin 12y ago

Students get 100$ each for silk road shopping, damn!

mootothemax 12y ago
Students get 100$ each for silk road shopping They might also get a nasty lesson in the traceability of BTC, depending on how the BTC's distributed to them.
- marlin 12y ago
  swap BTC for LTC. swap LTC for other BTC's, win.
  - ISL 12y ago
    Traceable through two blockchains, lose.
    - kylebrown 12y ago
      But only traceable by people who have access to the BTC/LTC exchange's database.

deleted 12y ago

[deleted]

hessenwolf 12y ago

So, half a million dollars to raise the demand for bitcoin, while, as ever, the supply remains roughly the same. Gosh, I wonder why governments like to maintain a flexible money supply? I am not saying that that is the intention of the organisers. I am just postulating it as a thought experiment, on one of the downsides of having a fixed money supply. Not that there are not also upsides. But there are also downsides.

jzwinck 12y ago
If the supply of the currency were inflated to "print" money to give to MIT students, people would rightly protest. It would be a simple wealth transfer from the overall population of currency holders to a small group of students who are already some of the most highly advantaged people alive in the world today. One purpose of this project is clear: to promote Bitcoin (or cryptocurrencies generally). The value of Bitcoin is higher since this announcement was made, regardless of what the price is.
baddox 12y ago
That's a tired old criticism of Bitcoin. The creators of Bitcoin are well aware that they're basing the currency on financial principles not accepted in mainstream economics.
- hessenwolf 12y ago
  It might be old, but money supply is far, far from a tired issue, whether with respect to bit coin, or to fiat currency.

downandout 12y ago

Perhaps I'm wrong but wouldn't it make more sense to actually just use the open source Bitcoin software to create their own altcoin......perhaps call them Mitcoins? They could give the initial, easily mined Mitcoins away to students, and spend the $500K on promoting it as a viable altcoin and getting the major exchanges to add it to their trading mix. With the credence lent to it by MIT, it would stand a far better chance of success than other altcoins, and the students that keep their initial coins would likely wind up with far more than $100. This just kind of seems like they are squandering the $500K, and are completely ignoring their greatest asset: their association with MIT. That name carries alot of weight with the type of people that buy these currencies.

yincrash 12y ago
Because this way they can trade each other bitcoins for goods. If they just gave everyone mitcoins, they would be worthless for a while, and most of the students wouldn't care to even use them.
- kylec 12y ago
  When I went to college, we could use our ID cards to pay for printing, meals in the student union, etc. If MIT did something similar and accepted "Mitcoins" for transactions done on campus, they would give the currency an inherrent value.
  - jlev 12y ago
    There is already a TechCash system for making purchases with an MIT student ID. All the on-campus food vendors accept it, as well as the student bar. No need for crypto-currency, there's already a functioning local system.
    - hayksaakian 12y ago
      they could pin the value of the techcash currency to the USD/BTC rate
12y ago

jonrimmer 12y ago

Can't believe they didn't call this "MITcoin".

quantabytes 12y ago

It would be really interesting if the organizers recorded and tracked the Bitcoins that are distributed in this way using the block chain. It could be a financial parallel to the MIT Reality Mining dataset: http://realitycommons.media.mit.edu/realitymining.html http://realitycommons.media.mit.edu/realitymining.html

dlss 12y ago

This is very interesting. Having that many people all holding BTC will have a bootstrapping effect around MIT. The three obvious effects are: 1. stores near campus will (probably) start supporting it 2. the black market on campus will (surely) start accepting it 3. Some undergraduates will invent things using it I think #1 and #2 are more interesting by far than #3... I can't wait to see what happens when BTC and USD are even vaguely on the same footing in a geographic area.

leorocky 12y ago
> the black market on campus will (surely) start accepting it This made me guffaw. The black market on campus? Would that be the Hob where Katniss Everdeen sells her poached turkeys while the corrupt Capitol police look away? Are Jay and Silent Bob behind the campus bookstore selling blunts, stolen books and test answers? Is there a darknet on campus accessible only to Angelina Jolie style hackers? Maybe you meant some kind of informal marketplace on campus where people buy and sell drugs and stolen merchandise but I don't think such a place exists on MIT. It's mostly hard working students trying to make it through school. I think you've been watching too many movies. Edit: I'm totally ok with this comment being downvoted, I would have downvoted it myself, but I couldn't resist.
- mcintyre1994 12y ago
  Ha, isn't alcohol illegal for under 21s, AKA most college students? I'd be stunned if there isn't a way to buy drugs on campus too.
  - leorocky 12y ago
    Yes it's probably a tiny minority who buy it through off campus drug dealers and friends. Such as there are drug dealing trends, they will happen across MA, New England and the general area and will happen regardless of bitcoin experiments at MIT. I'm rolling my eyes at this notion of a single purpose black market, hidden in the depths of the halls of MIT, the ire of faculty and administrators alike. It's such a silly idea. Might make a great young adult novel plot though.

ScottWhigham 12y ago

Two MIT students have raised half a million dollars for a project to distribute $100 in bitcoin to every undergraduate student at MIT this fall.... The bulk of funding for the project is being provided by MIT alumni with significant additional support from within the Bitcoin community. The total of over $500,000 already pledged will cover the distribution of bitcoin to all 4,528 undergraduates I guess I don't understand the "Why?". MIT kids are among the most elite already - why would people donate $100 to each student for that student to spend as he/she wishes? It's an honest question. As a company owner, why would you do this? What would be the benefits you would expect to see? I am clearly missing the "Why?" here. How would you feel if, after this first year, you found that 50% of the kids never did anything with the BTC? Or if 50% of the kids gave their BTC away to another student for nothing? An interesting thing to see at the end was how many students ever logged in to set up an account, or even check their balance. The funding covers less than $50,000 for anything else - $452,000+ will go directly to the students. That leaves less than $50,000 to cover the administration, the distribution, and the education (a big part). If they get the education part wrong, it will have wasted a huge chunk of the $452,000.

roymurdock 12y ago
The "people" who are donating are MIT alumni and the Bitcoin community. Both have clear incentives for Bitcoin adoption at MIT. MIT alumni - A degree from MIT is prestigious because of the amazing work the community does in creating and developing emerging technologies. Alums had the chance to work on similar projects in their day. They want to put the intelligence of the next generation to work. It's an investment in the future. Bitcoin Community - Bitcoin needs to be trusted in order to be widely adopted. If a prestigious institution is putting a lot of brainpower into developing the infrastructure of the payment network, it well lend credence to the entire scheme and provide a great test case for a USD-Bitcoin integrated economy. MIT students are smart; they will do something with the Bitcoin, even if they do just sell it for the $100. If you were given $100 would you give it away? I don't think so.
lnanek2 12y ago
I think Google similarly gives employees some amount of ad spend just to get them more knowledge and buy in of the system. Not unreasonable for large BTC exchanges to want to pay to bring in users like this. May even be more cost effective than ads for bringing in lifetime users worth quite a bit.

3pt14159 12y ago

When I first read the title I thought that MIT was going to set up a large mining project, partially as a research piece, and partially to counter balance the very large mining pools that are risking the 51% attack. Which I was very excited about. This is cool too though.

roymurdock 12y ago
"It is often asserted (for example, in the Bitcoin white paper [22]) that a cartel can double-spend Bitcoins. In a strict sense, this is true: a cartel can spend a Bitcoin by paying it to a player Alice, receiving goods or services, and then shifting the consensus choice of history to a branch where that coin is instead paid to a different player Bob. However, we argue that double-spending by a cartel has a limited payoff. Bitcoins have value because people are willing to trade them for goods and services. If players were unwilling to accept Bitcoins for trade or unwilling to spend Bitcoins for fear of having their payments nullified, the value of Bitcoins would diminish significantly as players lost confidence in the system. Worse, because players are encouraged to generate a new identity for each transaction and because identities are not linked to any side information, players cannot easily determine whether a proffered payment is coming from the double-spending cartel or an honest user. Thus, a rational player should refuse to accept any payments when there is a significant threat of double-spending. As a cartel must outmine the entire Bitcoin network and thus outspend the entire Bitcoin network for as long as it would remain a cartel, we believe it is very unlikely that a cartel could double-spend enough to recover the cost of the attack." - The Economics of Bitcoin Mining in the Presence of Adversaries (11-12)
- dragonwriter 12y ago
  This presumes that the only reason a double-spend cartel would exist would be to make a direct profit from double spending, rather than, e.g., being sponsored by an entity whose financial or other interests were threatened by the viability of bitcoin and who thus wanted to undermine trust in bitcoin (to, perhaps, make a profit outside of bitcoin) rather than profiting directly through double spending. When you consider that motivation, the trust factor cited in that critique as making a cartel attack less viable based on how undermining trust in bitcoin also undermines the ability to make a direct profit by double spending is irrelevant (or, rather, illustrates exactly why a double-spending cartel may be attractive to a bitcoin-hostile entity that wants to undermine trust in the bitcoin system.)

netcan 12y ago

I once read some account or theory of akkadian proto-currency. Market officials would issue clay coins stamped with a pictogram in exchange for goods like cattle or wine. These coins could be exchanged in the market and then would be be cashed in for the goods at the exchange. At that point the coin would be smashed. I guess more durable goods like wine could be stored long term in the exchange and the coins could function as a medium of exchange. You could do something similar with bitcoins that might be fun on a campus. A trusted bank-like-thing issues clay coins that can be smashed to retrieve the private keys. It might be nice to be able to go from digital back to clay from time to time. It would be interesting to see if they trade at current bitcoin prices, how many get smashed, etc. It also adds a layer of anonymity that can be seen and understood by non tech savvy folks.

moheeb 12y ago
I'll give this idea away for free... Bitcoin Lottery. You buy fortune cookies.

uptown 12y ago

I've read the technical docs for bitcoin, but something I still don't comprehend. With a distributed network like Bitcoin, how does the initial network get started? How do the first 2 or 4 or 12 nodes of a network find one another?

unreal37 12y ago
Satoshi posts a link to the software to a cryptography forum, and gets 2-3 other people to download it and try it.... and then people begin to dream of the possibilities...
- uptown 12y ago
  Right - but how do those first nodes "find" one another from a technical / networking / communication standpoint? Edit: I'll answer my own question. Apparently the current method is to use DNS seeds. Known relatively-permanent node addresses are hardcoded into the client software in order to enable initial connectivity to the network. Once they achieve this initial connection, they're able to obtain additional addresses from the nodes already operating on the network. After this initial network connectivity is achieved, the addresses are saved, so upon relaunch re-connect attempts are made to the database of previously found nodes. If these fail, then you fallback to the DNS seeds to start the process over. IRC used to previously be the communication network used to initiate the client connectivity, but this has been deprecated since the network is now more self-sufficient. https://en.bitcoin.it/wiki/Satoshi_Client_Node_Discovery https://en.bitcoin.it/wiki/Satoshi_Client_Node_Discovery http://stackoverflow.com/questions/19956088/how-do-two-bitcoin-clients-discover-each-other http://stackoverflow.com/questions/19956088/how-do-two-bitco...
  - nwh 12y ago
    That's completely correct. In order the node tries it's inbuilt knowledge of the network, the falls back to DNS seed nodes to discover peers, then falls back to hardcoded nodes if all of those fail. If no single peer can be contacted the node is dead in the water, and needs manual intervention to help get bootstrapped.

patcon 12y ago

I like the premise, but it's pretty evident that MIT will then have the highest concentration of naive Bitcoin users on the planet. Not sure what sort of folks might notice this and focus nefarious efforts there...

stevewilhelm 12y ago

> a project to distribute $100 in bitcoin to every undergraduate student at MIT this fall. They probably should have studied how habits are formed. $100 is not enough money to change people's shopping behavior. It will more likely provide the vast majority of the students a frustrating first impression of digital currencies.

wyager 12y ago
>$100 is not enough money to change people's shopping behavior. It's about getting them interested, not necessarily changing their behavior long-term.

twoodfin 12y ago

If you wanted to spend $500,000 to encourage the emergence of bitcoin in a "market" like MIT, I think it would be more productive to use the USD like a traditional subsidy: Pay MIT merchants to offer discounts on BTC-based sales. If I'm spending $40/week at LaVerde's, a 10% discount might be enough to get me to convert a few hundred dollars of my own money into BTC. As it is, the project will have to deal with getting merchants set up to accept BTC anyway, and my bet is that most students will be content to sit on their BTC hoping for another price spike rather than go through the trouble of learning how to use it for everyday transactions.

dmix 12y ago
That sounds just like a typical boring government subsidy. This is more akin to a large scale academic experiment. Economics should always be treated like experiments, rather than some attempts at top down market manipulation, ala subsidies.
- hayksaakian 12y ago
  a bitcoin subsidy has the side effect of requiring to actually use and spend bitcoin. a USD subsidy is just a discount you might receive without even realizing it.
patcon 12y ago
Seeing whether the students sit on it is likely valuable data that is part of what they're trying to understand :)
- pmorici 12y ago
  It would be beneficial to Bitcoin if more people were to buy some and sit on it. Right now the market cap is only around 5 Billion. If BTC is going to realize the promise of making transactions easy then the total market cap needs to be large enough to absorb large buys and sells w/o causing huge movements in the price.
  - 12y ago

platz 12y ago

Will they be able to avoid the same fate that happened to auroracoin?

mcintyre1994 12y ago
It seems harsh to downmod this, I don't think it's a troll? Auroracoin was a new coin technically independent of all the others, with its own blockchain. That was the problem - there wasn't enough mining power to secure its blockchain. In this case, these are just normal Bitcoins - secured by the enormous hashing power of that blockchain.
- platz 12y ago
  Ah, I misunderstood - I thought they were getting their own coin. If it's just bitcoins then it's not an issue.

13throwaway 12y ago

This is a really good idea. Everyone knows everyone else has 100 more dollars in their pocket, and the smart kids will come up with business ideas to collet the bitcoins.

gesman 12y ago

I launched free Wordpress plugin allowing anyone to build online store that accepts bitcoins (along with dollars) for physical and digital goods: http://wordpress.org/plugins/bitcoin-payments-for-woocommerce/ http://wordpress.org/plugins/bitcoin-payments-for-woocommerc... Advantages: - 100% proceeds goes to you (no middleman service). - 100% secure and hack proof - impossible to lose bitcoins even if everything on your store is hacked. It utilizes Electrum Master Public Key logic that generates receive-only addresses without need of any private keys. - 100% free (wordpress + WooCommerce + bitcoin plugin - all free) With more people getting access to bitcoins - it's the right time to offer it as a payment method as well. Enjoy!

bdcravens 12y ago

I wonder how many will turn around and blow it in 5 minutes on just-dice?

jebblue 12y ago

MIT joins the Bitcoin Ponzi scheme.

baddox 12y ago
A Ponzi scheme is an investment operation where the founder pays returns to initial investors with the funds from new investors, and fraudulently keeps this fact from investors. So Bitcoin is not a Ponzi scheme.
- patmcc 12y ago
  It may, however, be a pyramid scheme, where early adopters can only profit by getting others to invest at ever-higher prices. History will either record Bitcoin as a currency or a pyramid scheme, and anyone who says they're sure which one it'll be is either a fool or a liar.
  - baddox 12y ago
    Yes, but only in the same sense that every currency that has greater face value than the value of its physical ingredients is a pyramid scheme.
    - jebblue 12y ago
      The US dollar is backed by Americans. A bit coin is backed by who?
      - BrokenPipe 12y ago
        Earthians, gaians, world citizens ;) Including me.
      - vbuterin 12y ago
        Bitcoin users. Which is a larger population than that of many countries that have national currencies.
      - 12y ago

gojomo 12y ago

Part of me is hoping this is a Caltech prank, and when the MIT students try to redeem their "bitcoins" they just find some obscene taunt left for them inside the blockchain.

syntheticnature 12y ago

Both the announcement and the comments here focus on the amount in USD. When will (the majority of) that half-million USD be converted to BTC? (Via exchange? Via swap with an individual or entity holding a bunch of coins? Nice way to hedge liquidity if you've got the BTC.) What does it say that it isn't already done, and that it wasn't "each MIT student will receive 0.2 BTC" (or whatever a recent exchange would be for $100)? There is probably more information available without having to contact those organizing it, and the article was written for media press-release ingestion, but I'm surprised to see no comments on these facets here (at the time of writing, and HN seems to be acting up a touch so I've been trying to submit for a bit after I wrote this).

nhaehnle 12y ago
My bet is that the vast majority of those funds has been in the form of BTC for a long time, and a large part has always been in the form of BTC. Think about it: You're sitting on a large BTC mining fortune, and you've been watching the price of BTC slowly but surely decline over the last few months. What do you do? Pooling your BTC with others to fund something like this in the hope that it will cause the price to go back up again in the longer term sounds like a really good investment if you're in this situation.

kolev 12y ago

I have a lot more than $100 in BTC and the only good use so far is speculation. With $500K, they should've funded a Bitcoin project hackathon instead and get some fruit at the end.

panon 12y ago

Prediction: Students will a) Buy drugs on the internet. b) Exchange for $ asap. c) Sit on it and probably forget/lose it.

tmalsburg2 12y ago

This initiative reminds us painfully that Bitcoin still hasn't found its kill application (apart from Silk Road). If it had, they wouldn't have to give away BTC for free but these MIT students would queue up to buy BTC.

agalaria 12y ago

This will definitely help bitcoin to grow as more people get involved with it but it will also create lot of problems like black market will get attracted, stealing of coins will start. Yes, this move is required but everyone involved needs to careful.

ragis 12y ago

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