MIT Bitcoin Project To Create Cryptocurrency Ecosystem, Give $100 Per Student 107
rjmarvin (3001897) writes "Two MIT students have raised $500,000 to turn the campus into a cryptocurrency ecoystem, giving each MIT undergrad $100 in Bitcoin (or about 0.22 Bitcoins) starting next Fall. The MIT Bitcoin Project will make MIT the first physical location worldwide with widespread access to the digital currency. As of yet, there are no regulations governing how the students can use it."
This is MIT (Score:5, Interesting)
More like they'll pool their money, buy components for and build a dedicated bitcoin harvester, invest their gains in more equipment, and virtuously circle their way to enough bitcoins to buy free weed for everyone, including the staff.
Re:This is MIT (Score:5, Interesting)
Yea, but they will run their mining operations in their dorm rooms and MIT lab computers which will increase the university's electric bill by thousands of dollars a month. In the end, the University will have paid for one HUGE pot party and the further decline of their student's potential. Then when they try to clamp down on the parasite electricity drain, it will be time to break out the riot gear.
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Who knows... I'm just foreseeing the future..
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er...the Pursuit of Happiness?
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That would be a fantastic idea...in 2012. The ship sailed on bitcoin mining a while ago.
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I stopped in 2010 due to excessive power use. I used so much power that I wasn't even breaking even with the bill. Then the final decision was made to stop when cops showed up to my house expecting to find me growing pot. I showed them my setup and explained what I was really doing.
I only see it viable if multiple people doing it at different locations and then pooling it. Later they'll kill each other until the last one gets all the gold.
Also in the budget: (Score:5, Funny)
Giving every student a fedora and trench-coat.
Unfortunately there was no money left for the "enough razors to shave neck-beards" initiative
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It was intended as a joke. I'm not sure how it's insightful, nor am I sure how it's off topic.
Re:To the moon! (Score:4, Insightful)
But you need to get out before the price goes down...
The simple fact that you are comparing BitCoin to its price, indicates to me that it is a poor imitation of an investment. If BitCoin is a currency, who cares what it costs... The question is what can you GET for them... Right now? Not much. So it doesn't really matter how many of them there are.
Re:To the moon! (Score:5, Informative)
The question is what can you GET for them... Right now? Not much.
You really need to update your anti-Bitcoin propaganda. Between Bitcoinstore [bitcoinstore.com], Overstock.com [overstock.com], TigerDirect [tigerdirect.com], Fancy [tumblr.com], eGifter [egifter.com], and Gyft [gyft.com] you can get quite a bit for a bitcoin these days, and that's not counting all these other merchants:
Trade page at the Bitcoin Wiki [bitcoin.it]
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Who cares? The question was whether you could spend bitcoins for goods and/or services, not whether the prices are fixed in stone. Stores change their prices all the time, even prices given in USD. What matters is the price at the time you place your order.
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From a user-friendliness point of view, it doesn't matter at all. However, from an economic point of view (which is the context in which this discussion originated), it make all the difference in the world. What these stores really do is sell their stuff for USD, only they allow for instant conversion of bitcoins to USD upon checkout. And the difference there is that this neither testifies of nor contributes to the stability of bitcoin's value, which, as pointed out earlier in this thread is an essential at
Don't think of bitcoin as a currency ... (Score:2)
Merchants already have the option to assume zero risk when using bitcoins. An exchange like Coinbase lets merchants do all their accounting, pricing and billing in US Dollars. If a customer wants to use bitcoins the merchant sends the transaction info in USD to Coinbase, Coinbase translates that to Bitcoins and provides a Coinbase paymen
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Usage (Score:5, Insightful)
The issue with BitCoin isn't the acquisition, its the storage and spending. Giving each student easy access to a university-run "bank" with safe backed-up storage and good access would be a big step in the right direction. Having everywhere in MIT that accepts dollars also accept BitCoin would do far more.
The reason that the dollar works - that all currency works, really - is that people need it to interact with the government. Make BitCoin the easiest way to interact with MIT (for daily use stuff even) and people will use it, which will force them to acquire it, which will entice more people to take it, etc.
Re:Usage (Score:5, Insightful)
Sure, but why deal in bitcoin at all unless it's to buy prohibited items from black markets via the Internet or smuggle money across borders? For any other transaction, the local currency offers much more stability and much faster transactions.
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Well... dollars do suck from a security standpoint. There's the paper bits, which are inconvenient in large amounts. And there's the usual electronic methods, whose security is practically criminal: the idea that somebody could find my wallet and use it to drain my bank account, or incur five-figure debts with the onus of disproof on me, is utterly absurd.
Not that Bitcoin is automatically all that much better: it's still rather inconvenient and its security apparently rather doubtful. Rolling out chip-and-P
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So your labor isn't stolen by a central bank (inflation), and so your completely legal transactions aren't censored (Wikileaks).
In 2014, Inflation had decreased the value of the US dollar by about 0.5%. The value of bitcoin has dropped by more than 50%.
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Normal, usable, currencies don't halve in value over any 4 month time period.
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You're assuming (probably correctly) that the experiment will be a failure. I was stating some things that would help make the adoption experiment more likely to succeed. If people are to start using bit coin, they'll need a safe way of doing so.
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> The reason that the dollar works - that all currency works,
> really - is that people need it to interact with the government.
No, governement needs it to interact with people. People tell government to create a stable currency and keep its value. If these are no longer issues, well...
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Actually the Fed is charged with two roles - managing the currency to balance low inflation with low unemployment. The fact that in recent years they've focussed on one to the exclusion of the other is a relatively recent occurrence that has much to do with our current wealth concentration issues.
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The issue with BitCoin isn't the acquisition, its the storage and spending. Giving each student easy access to a university-run "bank" with safe backed-up storage and good access would be a big step in the right direction.
So you know, something functionally identical to the role currently played by regular US dollars?
If Bitcoins advocates were a little more self-aware, the whole thing would have value as a giant educational exercise into why the modern financial system is structured the way it is. Unfortunately...
Hmmm ... (Score:3)
So, how does this work? Every time I see reference to fractional bitcoins I get confused.
Is a bitcoin an atomic or a divisible unit? I'd thought it was an atomic unit, and there wouldn't be things like 0.22 Bitcoins. How do you spend a fraction of a bitcoin?
Are there bitpennies? I don't think I understand this new fangled stuff well enough yet.
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Mathemagic.
The blockchain records the coin split. It can also record coin fractions being rejoined to conserve space. The bitcoin is just a fundamental unit, like the dollar. It can still be divided.
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> So, how does this work?
Internally, the bitcoin software and the Block Chain ledger track integer numbers of "satoshi", the smallest unit in the system. One bitcoin is equal to 100 million satoshi, in the same way USD $1 million is equal to 100 million pennies. Back when one bitcoin was worth a few dollars, it was convenient to use that unit. Now the developers are considering jumping to a coin unit that is 100 satoshi (a millionth of a bitcoin), since dealing with fractions appears to be hard for peo
What about taxes? (Score:2)
What does the IRS think about this little financial transaction?
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What does the IRS think about this little financial transaction?
Never fear, the IRS will get their cut. Just remember that they will never accept BitCoin, only DOLLARS.
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There are specific rules about corporate gifts - they're not taxed as income to you, but outside of a very few well-stated regulations they're also not deductible as expenses to the company they way regular payments to you would be... and now we've once again achieved tax parity.
Nice try though.
IRS released a notice on virtual currencies ... (Score:2)
What does the IRS think about this little financial transaction?
The IRS recently released a notice regarding virtual currencies.
http://www.irs.gov/pub/irs-dro... [irs.gov]
I am not an accountant or tax advisor, but my understanding is that bitcoins are considered a property and not a currency so users must keep track of their basis and gains or losses like with stock purchases.
For incoming coins the new coins have a value based on the time they were received. The old coins returning to you based on when they were new. For outgoing coins (not including those coming back)
A Tax Professional's Dream (Score:2)
Well just make sure to save all your receipts for that $3 latte or whatever else you buy for 7 years along with hire a tax professional to figure everything out since you are paying with property that will have capitol gains/losses.
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Everyone is going to claim the $100 of educational research they bought.
There; fixed that for you :)
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Who buys porn?
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And why would you need to do this when any other currency you might add has capital gains and losses, but you do not need to recognize them on the tax form?
In the US, the tax code says so.... (Score:1)
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Actually, you are liable to pay capital gains (or deduct capital losses) on currency trading: http://www.fxop.com/Forex%20Ta... [fxop.com] is but one of sites that will explain in more detail. Or go straight to the horses mouth: https://en.bitcoin.it/wiki/Tax... [bitcoin.it]
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And why would you need to do this when any other currency you might add has capital gains and losses, but you do not need to recognize them on the tax form?
Why indeed? The problem is with that last assumption. Gains from foreign currency exchange are taxable if they exceed $200:
Any currency gains in excess of $200 per transaction (per trip or per purchase) are treated as a capital gain. ... The primary source of information on the tax treatment of currency gains or losses is IRC Section 988.
-- U.S. Taxation of Foreign Currency Gains or Losses [maximadvisors.com]
IRC Section 988 [cornell.edu]
Bitcoin doesn't get the exception for gains under $200, but otherwise the treatment is very similar.
Campus money... (Score:3)
Like casinos in Nevada that mint their own silver dollar size tokens
and gaming chips it may make sense for closed electronic transaction
systems.
Parents and scholarships might make deposits to the account of a student.
Time payments to ensure a meal ticket or rent budget not be blown in a weekend
might be facilitated.
Interesting.....
Why? (Score:3, Insightful)
Really the main question is why? What was the supposed problem that this is solving? Or is this yet another solution in search of a problem.
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There's a widespread distrust of the conventional finance system, as it's reached the point where there are so many levels of abstraction that few people can understand how it actually works any more. Bitcoin has serious flaws, but it's part of an effort to find a technological solution.
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It's solving the "Byzantine Generals" problem ( https://research.microsoft.com... [microsoft.com] ), which in simple terms is how to reach consensus without trust. In the context of a payment network like Bitcoin, the consensus to be reached is which transactions have occurred, and therefore what account balance each user has. Prior to the Bitcoin network, the only known method was a trusted third party, such as a bank, who keeps a central ledger of transactions and balances. The problem with a middleman is they can ext
The idea behind it.... (Score:1)
Is to legitimize virtual currencies and get people primed for the move away from cash, because what gives those in power even more power?
Complete and utter control over your finances.
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Better idea (Score:1)
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http://www.fastcoin.ca/specifi... [fastcoin.ca]
Next fall? (Score:5, Insightful)
By next fall, 100$ in Bitcoin might be 0.0022BTC or 22BTC.
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The money they raised was in dollars, and will stay in dollars until fall. So the students will get $100 worth of bitcoins at the time they get it, although we don't know the number of BTC that will be yet.
New MIT "Service" (Score:2)
I foresee some young enterprising student to institute a "Beer for BitCoin" service. ... and since the BitCoins are being given free, I guess it falls under "Free as in Beer".
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Once there was a gnarled and crooked tree in a forest of stoat oaks. The oaks made fun of him because he was completely useless and served no purpose.
Now there stands a gnarled and crooked tree on a meadow where there once was a forest of stout oaks, free to all the carbon dioxide and nitrogen he could ever want, because being useless is immensely useful.
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Thank you - I now have a very amusing picture in my head of a stoat oak. Possibly some kind of bizarre animal-vegetable hybrid formed by those self-same ex-MIT students who all got rich promoting the currency of our new distributed overloads?
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Thank you for that, I foresee my gaming group encountering a pack of stoatoaks in the near future.
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I assume 'Gelatinous Cubes' were invented when someone's mom brought down snacks to the basement during a miniatures session.
Pretzel Golems didn't make the cut.
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How is owlbear used in a political context here? A google search wasn't very enlightening.