MIT BITCOIN STUDY
Digital Currencies and Innovation on the MIT Campus
The objective of the study is to understand the process of diffusion of Bitcoin, a software-based, open-source, peer-to-peer payment system on the MIT campus. Bitcoin is an innovative payment network that allows for instant peer-to-peer transactions with zero or very low processing fees on a worldwide scale.
From the perspective of a user, Bitcoin is very similar to digital cash, with the additional benefit of being able to prove that a transaction actually took place because of the presence of a digital public ledger. The ledger tracks every transaction using digital wallet addresses that can be thought of as pseudonyms: when transacting with Bitcoin, a user is like a writer that publishes under a pseudonym, i.e. if her/his identity is ever linked to the pseudonym (the Bitcoin address), then all the work (transactions) can be linked back to her/him.
The technology has the potential of dramatically changing how we conduct transactions on a global scale, as it offers secure payments without the necessity of a costly and often slow intermediary. This could disproportionately help segments of the population that are currently underserved by financial intermediaries as well as countries with weak financial institutions.
With this research project the MIT community will have the opportunity not only to shape the evolution of digital currencies, but also to improve the lives of everyone who will use the follow-on inventions that our campus could deliver.
The Bitcoin ecosystem currently resembles the state of the Internet in the mid-90s, i.e. many of the applications that will be built on top of it have not been created. This offers a unique experience for the most inventive and entrepreneurial students at MIT, as they will have a chance to experiment and test their ideas within a campus where the diffusion of digital currencies will be years ahead of anywhere else. Essentially, participants will be the first ones to see the opportunities and possibilities the technology opens up.
In the same way that MIT gave students early access to computing resources through the Athena project in 1983, this project intends to give participants early access to a digital currency. The ultimate objective is to place the broader MIT community at the frontier of this new exciting wave of innovation.