'MIT Bitcoin Project' Will Offer Bitcoins Worth $100 To Every Single MIT Student

Students at the Massachusetts Institute of Technology may be trading in their dining dollars for Bitcoins in the near future. In an unprecedented move, each of MIT's 4,529 undergraduates will receive $100 in Bitcoin to use at designated stores around the Cambridge, Mass., campus. Dubbed the MIT Bitcoin Project, the student-led experiment is the latest to test the power of Bitcoins on college campuses.

Bitcoin has grabbed the attention of many folks in the tech industry, so it's no surprise that students at one of the world's leading innovation hubs would want to test out the electronic payment system for themselves. The MIT Bitcoin Project is the brainchild of Jeremy Rubin, a sophomore majoring in electrical engineering and computer science, who needed a fresh idea for one of his courses. After collaborating with classmate Dan Elitzer, a first-year MBA student, the pair decided to expand the experiment to the entire campus.

"We’re trying to seed an ecosystem and see what emerges,” Elitzer told VentureBeat. “That’s how startups work.”

According to a statement released by the university, funding for the project was primarily raised through generous MIT alumni, though the Bitcoin community also provided "significant" financial support. More than $500,000 has been collected to cover distribution costs, as well as other project-related activities.

Cameron Spencer/Getty Images News/Getty Images

Although the currency won't be available to MIT students until fall 2014, Rubin and Elitzer are hosting an MIT Bitcoin Expo in May so students can get a sense of how the Bitcoin economy works - and if it could really thrive on a college campus.

Many critics have their doubts about Bitcoin, which has no central bank or authority — though that may arguably be the currency's largest pull. The electronic payment system has been labeled "dangerous," "highly unstable" and "fundamentally flawed." However, it seems the erratic yet game-changing currency could have a future on college campuses.

According to recent reports, Bitcoin clubs and organizations are sprouting up on campuses across the country. University of Michigan, for instance, has a flourishing club called the Michigan Bitcoiners. For the last two years, the members have been meeting in an on-campus computer lab to devise new ways to use the virtual currency. One idea formed into Coin-Give, a nonprofit that'll take Bitcoin donations through its crowdfunding website.

George Frey/Getty Images News/Getty Images

Students at Stanford University have also jumped into the Bitcoin game, forming the Stanford Bitcoin Group to research, develop and build upon the software. The group already has several projects, including the anti-fraud software BlockScore and Try Bitcoin, a how-to program.

Of course, many students are more interested in the technicalities of Bitcoin, and whether or not it could successful sustain a society. But at least one undergrad is looking for new ways to bring the electronic system to the community. Jad Mubaslat, a junior biomedical engineering major at Ohio State University, recently helped a local barbershop set up a Bitcoin exchange through his new site, BitQuick.

“It’s proof that bitcoin is growing,” Mubaslat told Inside Higher Ed. “More and more people are coming on to it, and if you’re going to hear about bitcoin from word of mouth, the first place you'd start hearing that is on college campuses.”

Because many of these on-campus clubs are still in their primary stages, it's hard to tell if Bitcoin will ever take hold at universities. After all, MIT is the first institution to attempt using Bitcoins as discretionary student funds. But with so many college students already strapped for cash — and looking down a tunnel of crippling student loans — it's worth a shot, right?