The Massachusetts Institute of Technology’s Bitcoin Club plans to distribute US$100 worth of bitcoin to each of its 4,528 incoming undergraduates this fall, in an attempt to create an ecosystem for digital currencies at the institution.
Club founder and president Dan Elitzer and sophomore Jeremy Rubin have raised more than $500,000 for the MIT Bitcoin Project from MIT alumni, as well as the Bitcoin community.
Neither Rubin nor Elitzer has any connection to Bitcoin in any way. “Our investment is simply in our time, and belief in the benefits cryptocurrencies could bring to society,” Rubin told the E-Commerce Times.
They will work with professors and researchers across MIT to study how students will use the bitcoins they receive. The project will seek to spur academic and entrepreneurial activity within MIT in the field of virtual currency.
“We think Bitcoin and [other] cryptocurrencies have a place on the global stage, and MIT is the institute to show the world what can be done,” Rubin said.
“The MIT project will raise the profile of Bitcoin in an already digitally informed MIT student class,” Jeffrey Garzik, Bitcoin core developer and open source evangelist at BitPay. “Bitcoin is a natural fit for teenagers who have for years been connecting with their peers via smartphone and tablet.”
Although several other cryptocurrencies are available, Bitcoin was selected because “we … think that the network effects of Bitcoin are critical,” Rubin said.
Further, research currently is being conducted on how to augment the features of other current cryptocurrencies into Bitcoin directly, “as they are mostly modifications into the core Bitcoin code, with a few notable exceptions,” he pointed out.
Alternate cryptocurrencies “are interesting,” BitPay’s Garzik remarked. “The barrier to entry is low … . Many alt-coin creators do not fully understand the technology they are using, and do not treat their software as mission-critical financial software securing millions of dollars.”
Bitcoin exchanges have been hacked, most notably the now-bankrupt Mt. Gox, but “the network security of Bitcoin is quite literally 1 million times greater than any other alt-coin,” Garzik pointed out.
More on the MIT Bitcoin Project
To promote the project, Rubin and Elitzer, along with several partners, will present the MIT Bitcoin Expo on May 3. These are HackMIT, the MIT Society of Women Engineers, the MIT Bitcoin Club, and the College Cryptocurrency Network.
The expo will feature presentations and technical workshops involving prominent Bitcoin community figures.
Various MIT faculty and staff support the project.
Rubin and Elitzer are working out details of the academic studies and logistics for disbursing the bitcoins. MIT’s Big Data Living Lab will be involved in the research.
“The details are still being figured out, but almost everything will be opt-in,” Rubin said.
Bitcoin’s price, as listed on Coindesk, currently is around $450. At that rate, each MIT undergrad would get roughly a quarter of a bitcoin — but that may change as the currency’s exchange rate against the dollar fluctuates.
Might Privacy Be a Concern?
“Bitcoin and related cryptocurrencies pave the way for personal data to be recognized as a new digital asset class. The MIT Bitcoin Project is a truly exciting venture that will provide the foundation for research into other classes of digital assets,” said Thomas Hardiono, executive director of the MIT Kerberos & Internet Trust Consortium.
That could raise some privacy concerns over how the MIT experiment is conducted.
Governments already are leveraging Big Data to spy on their citizens, and Google, Facebook and online advertisers see personal data as a digital asset to be exploited. Could the MIT Bitcoin Project formalize this view and open the door to further degradation of online privacy?
“We are currently thinking about this [privacy issue] and have not yet reached any conclusions,” Rubin remarked.
“The privacy issues here depend on the extent to which MIT is tracking the use of the students’ bitcoins,” said Gautam Hans, consumer privacy fellow at the Center for Democracy & Technology.
“They say that they’re going to be monitoring the ecosystem that develops as a result of the project, but that could create privacy issues if MIT plans to track on the individual transaction level,” he told the E-Commerce Times.
“If they are going to be researching the broader set of products and services that develop, that would be less of an issue,” said Hans. “In either event, steps should be taken to anonymize personal data that’s collected for research, to the extent possible, and to ensure that the data is secure and that unauthorized parties can’t get access to it.”