Bitcoin doesn’t gain much currency at MIT
NEW YORK -- When two MIT students announced in 2014 that they would give away $500,000 in Bitcoin to undergraduates as a grand experiment of the renegade cryptocurrency, this being MIT, the usual thing happened: a college prankster tried to hack the system and grab all the money.
The hacker failed. But it may have also been the peak demand for Bitcoin on the Cambridge campus, according to results presented at an MIT Sloan School of Management financial technology conference on Friday in New York.
Two years after the MIT Bitcoin Project grabbed headlines across the globe with the goal of bringing the fringe currency into the mainstream, college students there are still sticking with cash and credit when they want to buy coffee, hit the bars, or pay their bills.
In the end, it turns out there are just too many other easy ways for students to pay, including cash, plastic, and mobile applications, such as Venmo, that can split bills among friends, said Christian Catalini, an assistant professor at MIT who oversaw the experiment.
And stores around campus haven’t jumped on the Bitcoin bandwagon, he said.
The cryptocurrency is facing a similar problem off-campus, failing to catch on with the public.
At MIT, 4,500-plus students were eligible to receive $100 in Bitcoin and about 3,110 students signed up. But two out of five students traded the currency in for cash, some within a month.
Those who stuck with it, used Bitcoin to shop, sent it overseas, or actively traded it, Catalini said.
Two years out, about 14 percent remain diehard Bitcoin users. The rest are just holding it, hoping it will increase in value. “They think of it as a lottery ticket,” Catalini said.
The Bitcoin project was the brainchild of Jeremy Rubin, who was studying computer science at MIT at the time, and Dan Elitzer, a Sloan graduate student.
In launching the project, Rubin said giving Bitcoins to students was, “analogous to providing them with Internet access at the dawn of the Internet era.”
Catalini said the founders of the experiment remain involved in the Bitcoin sector.
Even though it hasn’t caught on, MIT is still learning from the Bitcoin project and collecting data on how consumers adopt and use new technology, Catalina said.
And the Bitcoin project has also drawn attention to the technology behind the digital currency, with more MIT students now focusing their research on the blockchain technology that underlies Bitcoin.
“A lot has happened since then to our ecosystem,” he said.