By Seth Fitzgerald / CIO Today. Updated April 30, 2014.
Two students at the Massachusetts Institute of Technology (MIT) have announced a plan that will hopefully create a small bitcoin economy around the school. Recently, Jeremy Rubin and Daniel Elitzer, who are involved with the university's bitcoin club, began to raise money for their cause. To date they've amassed more than $500,000.
With the money they've collected, Rubin and Elitzer have decided to give each of MIT's 4,500 undergraduates $100 worth of bitcoin in the fall. The pair hope that by doing this, the students will not only become interested in the cryptocurrency but that some of them will create businesses centered around it.
The Donor List
According to Rubin, just 25 donors were involved in the process and half of the $500,000 came from Alexander Morcos, an MIT alum who co-founded the New York-based high-frequency trading firm Hudson River Trading.
It took just a matter of weeks for Rubin and Elitzer to court the 25 donors and raise the money necessary to jumpstart what could end up being a bitcoin economy. If it takes off, the economy could encompass MIT and the many surrounding businesses that frequently interact with the university's students.
Getting People Involved
Bitcoin has only been around for five years, but for much of its life the cryptocurrency was only used among small groups of individuals. However, a lot has changed over the past two years, and now even large businesses like Overstock.com accept bitcoin as a valid form of payment.
Though some companies are getting on board with digital currencies like bitcoin, it is still rare for a business to accept it and even more so for someone to actually use bitcoin to pay for something. Bringing bitcoin into the mainstream seems to be the primary goal of Rubin and Elitzer.
By announcing their plan months ahead of time, the pair hope that businesses located near MIT will begin to implement bitcoin payment systems. Additionally, students will have a few months to design innovative applications for bitcoin.
Handing out units of a cryptocurrency for free is not as crazy as it sounds and it has happened in the past. Last year, someone known as the Bitcoin Billionare decided to give away $13,000 worth of the currency on Reddit. More recently, alternatives to bitcoin that are not worth as much have been used to "tip" people.
Whether it is the $500,000 that will be handed out at MIT or the small tips given to people on Reddit, the goal is the same. Enthusiasts in the cryptocurrency community have continued to find that if people are enticed into using bitcoin with the help of donations, more people will become interested in alternatives to fiat currency.