MIT Project Indicates Bitcoin Unpopular Form of Payment with Students
If the student body at the Massachusetts Institute of Technology (MIT) is any indication, it will be some time before bitcoin becomes a common form of payment. A study that began more than two years ago indicates that students preferred to pay with cash, payment cards or mobile wallet apps over the decentralized virtual currency.
In the fall of 2014, two MIT students, Jeremy Rubin and Dan Elitzer, raised $500,000 and began the MIT Bitcoin Project, which entailed providing $100 in bitcoin to every undergraduate student at MIT who signed up for the project. The goal of Rubin and Elitzer was to create an “ecosystem for digital currencies at MIT,” according to a news release when the project was announced. The same year the MIT project started, bitcoin was one of the biggest topics on Paybefore.com in 2014.
More than 3,100 students took part in the project. Forty percent of them traded the bitcoins for cash within a month, and after two years approximately 14 percent are using the currency to shop, trade and send overseas. The remainder of students are holding onto their bitcoins, hoping the value will increase, Christian Catalini, an MIT assistant professor who oversaw the experiment, said in a report in The Boston Globe. Not only are students opting to pay with cash, cards and m-wallets, stores around campus haven’t been very accepting of bitcoin, Catalini noted.
Acceptance of the digital currency has been a mixed bag at various levels of government. For example, the New York Department of Financial Services last year issued its first BitLicense, enabling a mobile payments company to offer services involving digital currencies in the state. However, a Florida judge on July 22 concluded that bitcoin is not money. Globally, countries implementing regulations on how bitcoin can be used appears to run the spectrum. For example, Germany recognizes bitcoin as currency enough to declare that citizens are required to pay capital gains on bitcoin income, while some Russian lawmakers want to see the outright ban of bitcoin.
Whether bitcoin will ever catch on as a commonly used form of currency remains uncertain. However, the U.S. Postal Service, banks, companies and states have been exploring potential uses for blockchain technology, the underpinning for the decentralized currency, that might help reduce operational costs, improve product offerings, expedite new product development and decrease fraud.