Announcing the MIT Bitcoin Project
bitcoin.mit.edu
bitcoin.mit.edu
As it is, the project will have to deal with getting merchants set up to accept BTC anyway, and my bet is that most students will be content to sit on their BTC hoping for another price spike rather than go through the trouble of learning how to use it for everyday transactions.
Economics should always be treated like experiments, rather than some attempts at top down market manipulation, ala subsidies.
a USD subsidy is just a discount you might receive without even realizing it.
Generally, a market where there are lots of transactions going on is going to have a bigger set of bids and asks right near the most recent transaction price. If a market is thin, than a large sale, for example, might have to chew through a lot of bids and push the price way down to get done.
The three obvious effects are:
1. stores near campus will (probably) start supporting it
2. the black market on campus will (surely) start accepting it
3. Some undergraduates will invent things using it
I think #1 and #2 are more interesting by far than #3... I can't wait to see what happens when BTC and USD are even vaguely on the same footing in a geographic area.
I know that's not even the proper way to store your coins. But only security experts knew better.
Hint: It was https://electrum.org/. It's amazing.
No wallet software can keep your coins safe if it has to store your keys in the same machine you use for your internet activities. You have to use either an air-gapped machine (also called offline or cold storage) or multi-signature.
Then there's also the issue about trusting what you have downloaded. Even if you run the software in an offline machine, if it's meant to steal your coins it certainly can do it. Do you trust Electrum's developers or whoever reviewed the code? What about the maintainer of the website (or Github)? Did you use SSL? Did you check the signature? Did you get the signature from a different and secure channel?
For now I'm trusting Armory, but I'm planning to move to multi-signature once I have time, and maybe use three different wallets to create the keys.
Losing the keys is a separate issue. You have to think about different scenarios like disk failure, data decay, a fire in your house, your friend dying and their family not letting you recover his part of your n-of-m backup, police raid, etc.
About misplacing the keys, Electrum has deterministic wallets, so you can just print the key and store it somewhere (or remember the ten words it gives you), and your wallet is never lost.
Multisignature, deterministic, open source
But I'm not sure if I like their 2-of-2 scheme. I would rather have a 2-of-3 one. Maybe I should re-read their paper.
Another thing that bothers me is that it's not very safe by default. The only way to be safe is if you use a (reviewed) plugin and you don't let it update automatically. Because if you use Javascript instead, they can take your key whenever they want. Imagine if the FBI seized their servers and injected Javascript malware like they did with Tormail.
2of2 with time locked transactions means you can prevent double spend and thus allow instant confirmation.
the android app doesn't update by default and the chrome app doesn't update if installed from github but otherwise you are right although the web client remains useful for watch only mode (no keys) or for small amount
these two local and open source wallet clients also verify data before signing against the electrum network.
we are also working on our api, plugins for popular open source wallets (including hardware) and a full Java desktop client using bitcoinj.
we also worked hard to make all user transactions non correlatable to users or us (instant confirmation is out of band) and are working on a bunch of interesting things on top of it
Could you explain this more, or link to an explanation?
http://blog.greenaddress.it/2014/04/05/firstpost-updates/
Direct pdf link:
http://ghgreenaddress.files.wordpress.com/2014/04/greenaddre...
Take wallet.
Encrypt wallet.
Put sufficiently complex password on wallet (ie, no dictionary attacks).
Wow, you suddenly have a bank. Feel free to back up that file all you want, hell, if your password is solid you can publish it publically. I wouldn't, since you don't have to, but you still won't password crack it any time soon.
In other words, you're being disingenuous as to how simple it really is to get set up for Bitcoin. There are countless threads on Reddit and the like by confused geeks asking for advice and instructions on wallet generation/encryption/storage/etc.
Hell, throw a brief rundown into whatever their equivalent of "University 101" is if it really does prove to be a problem.
Some people really like tinkering with new tech and are willing to put up with a lot. Others have a low threshold of frustration and might not see it as appealing. This isn't about intelligence, but ease and convenience. And anyone that says with a straight face that setting up BTC for even the average MIT student is a simple endeavor is severely underestimating the complexity and risks involved, especially when the alternative is using the established and relatively risk-free system you've grown comfortable and intimately familiar with for years.
Better $100 of bitcoin than your credit card information.
6. Lots of rich kid's dads will be drawn into Bitcoin, inflating the bubble further.
Sounds like win-win to me.
BTC has a lot of problems to solve before it can have a chance of becoming mainstream. Giving 5000 undergrad hackers an incentive to solve those problems is genius.
0. A few smart undergrads become briefly the most popular people on campus for passing out $50 bills to a large portion of the student body.
I'm, of course, assuming the students don't all spend it at the same place.
One cheap way to set up is Coinbase. No fees for the first million dollars in revenue, no chargebacks, cash out to dollars every day, and they've got a point-of-sale app for your smartphone.
This made me guffaw. The black market on campus? Would that be the Hob where Katniss Everdeen sells her poached turkeys while the corrupt Capitol police look away? Are Jay and Silent Bob behind the campus bookstore selling blunts, stolen books and test answers? Is there a darknet on campus accessible only to Angelina Jolie style hackers? Maybe you meant some kind of informal marketplace on campus where people buy and sell drugs and stolen merchandise but I don't think such a place exists on MIT. It's mostly hard working students trying to make it through school. I think you've been watching too many movies.
Edit: I'm totally ok with this comment being downvoted, I would have downvoted it myself, but I couldn't resist.
As with any college campus, MIT surely has a healthy black market (buyers and sellers of alcohol, drugs, and various other illegal goods & services). With every student having Bitcoin, some will surely try to use it on said market.
Or perhaps you also thought the stock market was a building in downtown Manhattan...
I would expect MIT students to be smarter than that. Not to mention that most students will prefer to pay in USD than BTC.
ps. Bitcoin as a form of payment, has a really questionable success. If a virtual currency is going to be accepted by the public, will have to be state-backed in some way. So bitcoin as a currency, might be (extremely) interesting, but I'm sure 100% it will never be able to replace FIAT in it's current form.
I guess I don't understand the "Why?". MIT kids are among the most elite already - why would people donate $100 to each student for that student to spend as he/she wishes? It's an honest question. As a company owner, why would you do this? What would be the benefits you would expect to see? I am clearly missing the "Why?" here. How would you feel if, after this first year, you found that 50% of the kids never did anything with the BTC? Or if 50% of the kids gave their BTC away to another student for nothing?
An interesting thing to see at the end was how many students ever logged in to set up an account, or even check their balance. The funding covers less than $50,000 for anything else - $452,000+ will go directly to the students. That leaves less than $50,000 to cover the administration, the distribution, and the education (a big part). If they get the education part wrong, it will have wasted a huge chunk of the $452,000.
MIT alumni - A degree from MIT is prestigious because of the amazing work the community does in creating and developing emerging technologies. Alums had the chance to work on similar projects in their day. They want to put the intelligence of the next generation to work. It's an investment in the future.
Bitcoin Community - Bitcoin needs to be trusted in order to be widely adopted. If a prestigious institution is putting a lot of brainpower into developing the infrastructure of the payment network, it well lend credence to the entire scheme and provide a great test case for a USD-Bitcoin integrated economy.
MIT students are smart; they will do something with the Bitcoin, even if they do just sell it for the $100. If you were given $100 would you give it away? I don't think so.
http://tpbit.blogspot.ca/2014/04/smart-contracts-and-demise-...
This just kind of seems like they are squandering the $500K, and are completely ignoring their greatest asset: their association with MIT. That name carries alot of weight with the type of people that buy these currencies.
On the other hand it sounds like a brilliant idea because there is some volatility in the BTC market, so you'll get some peculiar behaviors, where the infrastructure was originally implemented to get the lab monitors and food service workers out of the cash handling business, sometimes a laser printer page will cost five cents or ten cents under BTC or they'll be playing games with dynamic costs such that you may get considerably more paper or food at certain times of the semester than others if you provide a fixed qty of BTC.
If you buy supplies with USD, and sell them for MITCoins, you are critically dependent on a small bid/ask spread, and there won't be if the only holders are MIT students.
Consequently, you would be able to choose to buy for USD at a store, or for MITCoins and pay a markup that is equal to the spread (since the buyer needs to pay the ask (to get his MITCoins) and the seller gets paid the bid (to get USD to buy new supplies)).
This would mean that no trading would ever begin.
Last I heard it was forked by attackers and destroyed.
Smaller coins leave you more vulnerable to shenanigans.
UPDATE:
Correction, AUR issued a patch, was not destroyed:
https://bitcointalk.org/index.php?topic=552895.0
Still, smaller coins are tough to manage.
> "The organizers admit they do not know how students will decide to use their bitcoin. However, they plan to use the time between now and when the bitcoin is distributed to build up the Bitcoin ecosystem at MIT."
I've been waiting to hear about the next phase of bitcoin development; beyond exchanges and marketplaces. What would be the easiest way to keep tabs on the bitcoin projects at MIT? Is there a publicly accessible message board for this project?
Edit:
Reorganized this post a bit. Didn't mean to side track so much from the content of the article.
Side note:
Please stop hijacking the native browser scrolling. I don't know if it's because I ate guláš for lunch, but the custom scroll effect on this site makes me feel nauseous. Additionally, the site doesn't work at all without JavaScript. Why? The site could probably very easily be built to static HTML files for faster load times, decreased load on the server(s), and wouldn't require JavaScript to render views.
Agreed. The custom scrollbars are awful too. I wish browsers had a way to prevent certain things from being overridden (scrolling, right click, scrollbars, keyboard shortcuts) on a user configurable basis.
Or just stop hijacking my browser. Why do I need Javascript to read an announcement?
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<a id=up_7666264 onclick="return vote(this)" href="vote?for=7666264&dir=up&xxxx">
also, thx someone for downvoting a helpful attempt.
i see the cancer found HN also
You could do something similar with bitcoins that might be fun on a campus. A trusted bank-like-thing issues clay coins that can be smashed to retrieve the private keys. It might be nice to be able to go from digital back to clay from time to time. It would be interesting to see if they trade at current bitcoin prices, how many get smashed, etc. It also adds a layer of anonymity that can be seen and understood by non tech savvy folks.
Bitcoin Lottery. You buy fortune cookies.
Edit: I'll answer my own question.
Apparently the current method is to use DNS seeds. Known relatively-permanent node addresses are hardcoded into the client software in order to enable initial connectivity to the network. Once they achieve this initial connection, they're able to obtain additional addresses from the nodes already operating on the network.
After this initial network connectivity is achieved, the addresses are saved, so upon relaunch re-connect attempts are made to the database of previously found nodes. If these fail, then you fallback to the DNS seeds to start the process over.
IRC used to previously be the communication network used to initiate the client connectivity, but this has been deprecated since the network is now more self-sufficient.
https://en.bitcoin.it/wiki/Satoshi_Client_Node_Discovery
http://stackoverflow.com/questions/19956088/how-do-two-bitco...
There is probably more information available without having to contact those organizing it, and the article was written for media press-release ingestion, but I'm surprised to see no comments on these facets here (at the time of writing, and HN seems to be acting up a touch so I've been trying to submit for a bit after I wrote this).
Think about it: You're sitting on a large BTC mining fortune, and you've been watching the price of BTC slowly but surely decline over the last few months. What do you do?
Pooling your BTC with others to fund something like this in the hope that it will cause the price to go back up again in the longer term sounds like a really good investment if you're in this situation.
http://wordpress.org/plugins/bitcoin-payments-for-woocommerc...
Advantages:
- 100% proceeds goes to you (no middleman service).
- 100% secure and hack proof - impossible to lose bitcoins even if everything on your store is hacked. It utilizes Electrum Master Public Key logic that generates receive-only addresses without need of any private keys.
- 100% free (wordpress + WooCommerce + bitcoin plugin - all free)
With more people getting access to bitcoins - it's the right time to offer it as a payment method as well.
Enjoy!
Gosh, I wonder why governments like to maintain a flexible money supply?
I am not saying that that is the intention of the organisers. I am just postulating it as a thought experiment, on one of the downsides of having a fixed money supply.
Not that there are not also upsides. But there are also downsides.
One purpose of this project is clear: to promote Bitcoin (or cryptocurrencies generally). The value of Bitcoin is higher since this announcement was made, regardless of what the price is.
They probably should have studied how habits are formed. $100 is not enough money to change people's shopping behavior.
It will more likely provide the vast majority of the students a frustrating first impression of digital currencies.
It's about getting them interested, not necessarily changing their behavior long-term.
This is cool too though.
Worse, because players are encouraged to generate a new identity for each transaction and because identities are not linked to any side information, players cannot easily determine whether a proffered payment is coming from the double-spending cartel or an honest user. Thus, a rational player should refuse to accept any payments when there is a significant threat of double-spending. As a cartel must outmine the entire Bitcoin network and thus outspend the entire Bitcoin network for as long as it would remain a cartel, we believe it is very unlikely that a cartel could double-spend enough to recover the cost of the attack." - The Economics of Bitcoin Mining in the Presence of Adversaries (11-12)
"As described above, a 51% cartel attack is unlikely to generate enough reward within the Bitcoin economy to be worthwhile to the attacker. However, this does not rule out the possibility of a 51% attack that aims to destroy the Bitcoin economy in order to achieve utility outside the Bitcoin economy. We call this the Gold nger attack after the character in lm who tries to undermine U.S. currency by ruining its gold backing [15]. There are at least three possible motivations for a Gold finger attack. First, a government or institution might want to block Bitcoin transactions, to enforce the law, deter money laundering, or achieve some other institutional goal. Second, a non-state attacker might seek to gain some political or social goal, perhaps as a form of social protest (such a model was previously postulated by Becker et al. under the name \Occupy Bitcoin" [6]). Third, an attacker might seek an investment gain, for example by taking large short positions in Bitcoins so as to profi t if the value of Bitcoins is diminished. In all of these cases, the attacker must achieve enough utility to justify the substantial cost of an attack. We agree with Becker et al. that it is unlikely that a protest movement could muster the resources to launch a successful attack. And at present it does not appear possible to acquire a short position on Bitcoins that is large enough to justify an attack."
One of the best papers published on the game theory of Bitcoin to date in my opinion.
http://weis2013.econinfosec.org/papers/KrollDaveyFeltenWEIS2...
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They might also get a nasty lesson in the traceability of BTC, depending on how the BTC's distributed to them.
History will either record Bitcoin as a currency or a pyramid scheme, and anyone who says they're sure which one it'll be is either a fool or a liar.
Including me.