As they theorize the pitfalls of time travel, smooth out the kinks in artificial intelligence, and scan the heavens for signs of life on other planets, this fall’s crop of MIT students will also have a chance to spend a $100 windfall in bitcoins.
It’s an experiment that would make spendthrift economist John Maynard Keynes proud. The MIT Bitcoin Club announced Tuesday it has raised $500,000 from alumni and other well-heeled techies to see what happens when you give a C-note’s worth of the virtual currency to each undergraduate at the elite engineering school at once.
Club President Dan Elitzer, an MBA student at MIT’s Sloan School of Management, didn’t know whether the approximately 4,500 undergraduates would cash in the bitcoins for conventional American currency, blow them all in one night on a lavish meal at Thelonious Monkfish (a sushi joint in Cambridge, Mass. that accepts bitcoins), or ignore the gift completely.
Ideally, he said, MIT’s youthful brainiacs would invent and test new uses for the virtual currency among their peers. Think smart phone apps, new-fangled cash machines, and other gizmos. The approximately $50,000 left over after the giveaway will fund advertising and the other club activities to promote such innovation.
“If digital currency is going to succeed in the world, it makes sense it would succeed at MIT,” Elitzer told VICE News. “What might society look like a few years down the road when Bitcoin is more widely used? Hopefully we’ll provide a little microcosm of that.”
Students will be asked to opt in to the study as the club looks at different patterns of spending, activity, or lack thereof in different ways. The club has yet to formulate how they plan to track the spending, Elitzer said, and they are figuring out how they'll approach using the pile of data they expect from students' behavior, which could lead to lots of different inquiries, studies, and projects.
Elizter dismissed concerns about the shadier side of bitcoins — like black market peddlers who’ve used them to sell illegal drugs, or the recent collapse of Mt. Gox, a Japan-based Bitcoin exchange that filed for bankruptcy after claiming that hackers stole 850,000 bitcoins worth $400 million from customers.
Bitcoin technology, which runs a public ledger of transactions that keeps track of who owns how much of the currency, has only been around for five years, said Elizter. And only a minority of users are abusing it — just as criminals have been using paper money, pieces of silver, and other filthy lucre since the dawn of time. Elizter thought it was more compelling to consider how Mt. Gox attracted so much money in the first place.
“It speaks to the power that this technology has and how much it is inspiring people,” he said.
The MIT Bitcoin Club is one of a handful similar college groups around the world, according to Jeremy Gardner, a University of Michigan undergrad who co-founded the College Cryptocurrency Network. MIT and the Network have organized a Saturday, May 3 conference in Cambridge to discuss the upcoming experiment. In a sign of Bitcoin’s burgeoning legitimacy, tech firm executives, attorneys, and others are slated to speak at the conference.
“They really see us not just as a gateway to future employees, but as a gateway for Bitcoin to the mainstream,” Gardner told VICE News. “If you can create campuses where there is widespread acceptance of bitcoins, all of sudden you’ve opened the floodgates. They are going home and telling their parents and friends about it. There’s no one better way to start a trend than college students.”
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