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MIT Bitcoin Project To Create Cryptocurrency Ecosystem, Give $100 Per Student

timothy posted about 7 months ago | from the lighter-than-bills-for-the-bursar's-office-too dept.

Bitcoin 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."

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That's like 6 joints (0, Flamebait)

Anonymous Coward | about 7 months ago | (#46869043)

It'll all be blown on Marijuana because that's what those liberal college students do.

This is MIT (5, Interesting)

kruach aum (1934852) | about 7 months ago | (#46869073)

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 (5, Interesting)

bobbied (2522392) | about 7 months ago | (#46869205)

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.

Re:This is MIT (2)

CreatureComfort (741652) | about 7 months ago | (#46870819)

And the downside is?

Re:This is MIT (1)

bobbied (2522392) | about 7 months ago | (#46870987)

Who knows... I'm just foreseeing the future..

Re:This is MIT (1)

Tokolosh (1256448) | about 7 months ago | (#46872601)

er...the Pursuit of Happiness?

Re:This is MIT (0)

Anonymous Coward | about 7 months ago | (#46874243)

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.

Or maybe some prosecutor will try to make a name for himself by "throwing the book" at one of the miners, while MIT stand by and watch that student eventually commit suicide, once again making news?

Re:This is MIT (0)

Anonymous Coward | about 7 months ago | (#46870251)

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.

I can't speak to what it's like 30 years later, but when I was there, home-made LSD was more common than weed ;-)

Re:This is MIT (1)

Ralph Wiggam (22354) | about 7 months ago | (#46871753)

That would be a fantastic idea...in 2012. The ship sailed on bitcoin mining a while ago.

Re:That's like 6 joints (-1)

Anonymous Coward | about 7 months ago | (#46869509)

I am wondering how much should I get paid to use beta?

Also in the budget: (4, Funny)

i kan reed (749298) | about 7 months ago | (#46869047)

Giving every student a fedora and trench-coat.

Unfortunately there was no money left for the "enough razors to shave neck-beards" initiative

Re:Also in the budget: (0)

Salgat (1098063) | about 7 months ago | (#46869143)

What a thought provoking and insightful comment you've made.

Re:Also in the budget: (1)

i kan reed (749298) | about 7 months ago | (#46870297)

It was intended as a joke. I'm not sure how it's insightful, nor am I sure how it's off topic.

Re:Also in the budget: (0)

Anonymous Coward | about 7 months ago | (#46870009)

Never more have I needed modpoints more than this.

If they really wanted to matter they'd give dogecoins anyways.

Re:Also in the budget: (0)

Anonymous Coward | about 7 months ago | (#46871111)

Not every MIT student is in CS. Some of them actually study useful subjects.

Yet another article about how MIT is wasting (-1)

Anonymous Coward | about 7 months ago | (#46869051)

Yet another article about how MIT is wasting resources and time.

Re:Yet another article about how MIT is wasting (2)

kruach aum (1934852) | about 7 months ago | (#46869141)

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.

Re:Yet another article about how MIT is wasting (1)

rjstanford (69735) | about 7 months ago | (#46869179)

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?

Re:Yet another article about how MIT is wasting (0, Offtopic)

kruach aum (1934852) | about 7 months ago | (#46869253)

I imagine this is how the owlbear was conceived of. Though to be fair one of the advantages that pencil and paper offers over slashdot is an edit function.

Re:Yet another article about how MIT is wasting (-1)

Anonymous Coward | about 7 months ago | (#46869431)

Though to be fair one of the advantages that pencil and paper offers over slashdot is an edit function.

Though, it does provide you with a really wacky idea of a Preview button, which affords you the opportunity to proof read and edit before submitting.

Failure to do so, well, that's your fault.

Re:Yet another article about how MIT is wasting (1)

lagomorpha2 (1376475) | about 7 months ago | (#46869535)

Thank you for that, I foresee my gaming group encountering a pack of stoatoaks in the near future.

Re:Yet another article about how MIT is wasting (2)

Kaenneth (82978) | about 7 months ago | (#46870279)

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.

Re:Yet another article about how MIT is wasting (0)

Anonymous Coward | about 7 months ago | (#46873961)

Wow, I thought "the humorless mods are out in strength today" so I modded this +1 Funny, yet it remained at Score:0, Offtopic. I'm starting to think we're dealing with a /. editor who doesn't tolerate criticism on the antiquated posting and moderation system.

In case I'm just being paranoid and it's the humorless mods anyway: dear mods, even though I noticed "owlbear" is often used in a political context on this site, don't you think it really looks like this particular instance is an innocuous D&D reference [wikipedia.org] ?

Re:Yet another article about how MIT is wasting (1)

kruach aum (1934852) | about 7 months ago | (#46875925)

How is owlbear used in a political context here? A google search wasn't very enlightening.

Re:Yet another article about how MIT is wasting (0)

Anonymous Coward | about 7 months ago | (#46876503)

Chuang Tzu, section 20

Re:Yet another article about how MIT is wasting (0)

Anonymous Coward | about 7 months ago | (#46869781)

It takes a lot of failures to get to a success. Don't feel bad about pissing away a bit of time and money to try something new. Even if it doesn't turn out as you hope it may help you understand something else in a new way.
 
Too many people want guaranteed success. They end up being the people who never get far.

Sounds like a buyout success story in progress (0)

Anonymous Coward | about 7 months ago | (#46869063)

The students that go to MIT should know better than that though.

To the moon! (0)

Anonymous Coward | about 7 months ago | (#46869067)

Half a million. That's some serious demand for Bitcoins. You know that the number of Bitcoins is bounded, right? If you haven't invested, get in before MIT drives the price up!

Re:To the moon! (3, Insightful)

bobbied (2522392) | about 7 months ago | (#46869255)

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! (4, Informative)

JesseMcDonald (536341) | about 7 months ago | (#46869875)

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]

Re:To the moon! (2)

Trapick (1163389) | about 7 months ago | (#46871629)

Do any of those actually sell a product for a fixed amount of bitcoin for longer than a day? Are in all cases are they taking bitcoin at whatever the exchange-rate-of-the-second is?

Re:To the moon! (1)

JesseMcDonald (536341) | about 7 months ago | (#46872481)

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.

Re:To the moon! (1)

Anonymous Coward | about 7 months ago | (#46874039)

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 attribute for an an actual currency. Economies have gone down hard and people have died because of fluctuations in currencies, and that's why people in countries with unstable currencies often trade in USD.

Re:To the moon! (0)

Anonymous Coward | about 7 months ago | (#46872687)

It makes no difference. They'll take your bitcoins either way.

Plenty of other places take bitcoins too, like: www.thinkpenguin.com

You can get computers, parts, etc. Not to mention plenty of other places take them. Everybody who is anybody that takes donations accepts bitcoins. EFF, FSF, plenty of distributions (Trisquel, Linux Mint, etc), and many more.

Don't think of bitcoin as a currency ... (1)

perpenso (1613749) | about 7 months ago | (#46871095)

Don't think of bitcoin as a currency, something that you hold over a period of time. Think of it as a transaction mechanism, an alternative to credit cards, pay pal, etc.

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 payment address, sends this updated transaction info back to the merchant and when coinbase receives the coins the merchant is paid the USD amount they originally submitted to coinbase regardless of any bitcoin price fluctuations that took place in the minutes it took the transaction to occur and be verified. The merchant never sees a bitcoin, and with the new IRS guidelines this is a good thing.

On the consumer side it may not be as convenient. It can take a few days to convert dollars to bitcoins, and there will probably be a fee. So keeping a small amount of coins in digital wallet may be common. Can they be lost, yes, but so can a physical wallet with USD. Can the USD to bitcoin conversion be sped up, perhaps with greater personal identification information provided to the exchange and a track record of use. But we're probably still talking about a 3 business day ACH transfer (bank to coin exchange) becoming a 1 business day ACH transfer.

Ban the Beta! (-1)

Anonymous Coward | about 7 months ago | (#46869077)

Slashdot tries to stifle me every time I mention it. It's time to turn the tables on Slashdot in protest.

Re:Ban the Beta! (0)

Anonymous Coward | about 7 months ago | (#46870953)

seriously, nobody gives a shit

Usage (4, Insightful)

rjstanford (69735) | about 7 months ago | (#46869089)

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 (4, Insightful)

Jeff Flanagan (2981883) | about 7 months ago | (#46869247)

>Having everywhere in MIT that accepts dollars also accept BitCoin would do far more.

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.

Re:Usage (1)

jfengel (409917) | about 7 months ago | (#46869451)

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-PIN in the US might be a better solution, building on the existing infrastructure rather than having to create a whole new one. (Especially since Bitcoin's version of it appears to be heavily based on awarding large profits to early adopters rather than just about creating a better infrastructure.)

Re:Usage (0)

Anonymous Coward | about 7 months ago | (#46869673)

>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.

visa and mastercard solved that problem by not making you liable for those activities. in other words, we also have a very simple device standing in the way of a criminal and all of your important documents and jewels, but we are a-ok with a 6 pin tumbler protecting your home and it's contents from a $1.50 lockpick set. the other option is to use bitcoin and have a bank shutdown and run off with all of your coins. or you could spend bitcoins on a product or service, not get what is advertised, and have absolutely 0 recourse.

I wish I had mod points to mod you down

Re:Usage (0)

Anonymous Coward | about 7 months ago | (#46871661)

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?

So your labor isn't stolen by a central bank (inflation), and so your completely legal transactions aren't censored (Wikileaks).

Re:Usage (2)

Ralph Wiggam (22354) | about 7 months ago | (#46871945)

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%.

Re:Usage (-1)

Anonymous Coward | about 7 months ago | (#46869263)

negative. the real issue is that the IRS wants oh so badly to be up your ass.

and barring something earthshaking, they will get there. bitcoin or no.

Re:Usage (0)

Anonymous Coward | about 7 months ago | (#46869301)


  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.

For $100? If you can't keep $100 safe for a period of time, just close shop. That's less money than a lot of people routinely keep in physical currency in their wallet. The bitcoin stored on your computer is worth less than the actual computer. Why would you bother with a bank, which has a further, far greater risk of being hacked? A single target with a half a million dollars on it presents a MUCH more attractive target than 5,000 targets.

Re:Usage (1)

rjstanford (69735) | about 7 months ago | (#46871159)

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.

Re:Usage (2)

BorisSkratchunkov (642046) | about 7 months ago | (#46869487)

Many colleges have on-campus currencies- usually dollars are attached to a student ID card via Blackboard or a similar piece of software. I don't use campus currency from my alma mater in my present day-to-day life. How would this be any different?

You just described PayPal (-1)

Anonymous Coward | about 7 months ago | (#46869553)

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. ... Which is _exactly_ why I hate paypal with the white-hot heat of a thousand suns.

Re:Usage (2)

Impy the Impiuos Imp (442658) | about 7 months ago | (#46869645)

> 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...

Re:Usage (1)

rjstanford (69735) | about 7 months ago | (#46871189)

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.

Re:Usage (0)

Anonymous Coward | about 7 months ago | (#46870915)

The reason that the dollar works - that all currency works, really - is that people need it to interact with the government.

That's only the case with "fiat" currencies. Gold-based currencies have existed in societies with little to no government.

Re:Usage (2)

Electricity Likes Me (1098643) | about 7 months ago | (#46872435)

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 ... (2)

gstoddart (321705) | about 7 months ago | (#46869105)

giving each MIT undergrad $100 in Bitcoin (or about 0.22 Bitcoins) starting next Fall

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.

Re:Hmmm ... (1)

blackraven14250 (902843) | about 7 months ago | (#46869147)

They're divisible down to 8(?) decimal places.

Re:Hmmm ... (0)

Anonymous Coward | about 7 months ago | (#46869157)

they are divisible down to something like 6 decimal places iirc

Re:Hmmm ... (0)

Anonymous Coward | about 7 months ago | (#46869259)

Bitcoin is divisible up to 8 decimal places. Also, a protocol update may be used to allow for more decimal places if it is ever necessary.

Re:Hmmm ... (2)

SuricouRaven (1897204) | about 7 months ago | (#46869815)

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.

Anon (0)

Anonymous Coward | about 7 months ago | (#46871261)

Actually, the satoshi is the fundamental units. Every other multiple is based on a satoshi amount. 1 BTC = 1e8 satoshis

Re:Hmmm ... (1)

SneakyMishkin (1298729) | about 7 months ago | (#46869889)

The basic unit is the Satoshi. There are 100,000,000 Satoshis in a Bitcoin. But, like in the article, most people just use decimals to avoid the more confusing (but still used) terms like microBitcon.

Re:Hmmm ... (1)

DanielRavenNest (107550) | about 7 months ago | (#46873057)

> 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 people.

> I'd thought it was an atomic unit,

I'm afraid that's a common, but wrong impression. Satoshi are the atomic unit, i.e. the smallest unit tracked in the software and ledger.

> How do you spend a fraction of a bitcoin?

Type in the amount into the wallet software of your choice. Here, watch transactions go by: https://blockchain.info/ [blockchain.info]

> Are there bitpennies?

Not with that name. Most people use bitcoins (BTC), millibitcoins (mBTC), microbitcoins (uBTC) and satoshi as units, depending on what they are dealing with.

decentralized money is the future (0)

Anonymous Coward | about 7 months ago | (#46869115)

what a great idea. when you need to put a theory into practice start with the smart. That way the realities that try the hypothesis will be experienced by individuals who know how best to express them.

I think the only problem with bitcoin is the anonymity of holder - not knowing how much the other actors have in an economic system leads to inefficiencies.

Purchases may be anonymized, but holders should not be.

Once the flow of money can be tracked atomically then distribution can be properly managed and the power that comes with currency can be allocated properly, justly and in a sustainable fashion.

After that, the real future can begin.

Re:decentralized money is the future (0)

Anonymous Coward | about 7 months ago | (#46869239)

I guess if you disregard how hugely wasteful crypto currencies are, how they offer no transaction security and was basically designed purely for selling illegal products and services without getting caught.

I can't imagine why anyone other than drug dealers encourage the use of this currency.

What about taxes? (1)

I'm New Around Here (1154723) | about 7 months ago | (#46869121)

What does the IRS think about this little financial transaction?

Re:What about taxes? (1)

bobbied (2522392) | about 7 months ago | (#46869291)

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.

Re:What about taxes? (0)

Anonymous Coward | about 7 months ago | (#46870465)

Why? The IRS accepted tobacco crops at one point in history. I don't see that any different than accepting any form of currency.

Re:What about taxes? (0)

Anonymous Coward | about 7 months ago | (#46869419)

Nothing. Gifts don't have to be reported under a certain limit. Do you think you're supposed to report your Christmas gifts to the IRS?

Re:What about taxes? (0)

Anonymous Coward | about 7 months ago | (#46870641)

I always work multiple jobs a year and have each job be from a separate company that GIFTS me $9,999. Am I still able to be within this "gift amount" that the iRS allows? Do I have to pay any tax? Since my income will essentially be zero (its all gifts), do I even get government handouts/subsidies for poor people? Can I qualify for free foodstamps too?

Re:What about taxes? (1)

rjstanford (69735) | about 7 months ago | (#46871207)

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.

Re:What about taxes? (0)

Anonymous Coward | about 7 months ago | (#46871251)

I always work multiple jobs a year and have each job be from a separate company that GIFTS me $9,999. Am I still able to be within this "gift amount" that the iRS allows? Do I have to pay any tax? Since my income will essentially be zero (its all gifts), do I even get government handouts/subsidies for poor people? Can I qualify for free foodstamps too?

The 1099-MISC reporting requirements were at $600 last time I checked, not $10,000.

IRS released a notice on virtual currencies ... (1)

perpenso (1613749) | about 7 months ago | (#46871227)

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) it would probably be like other accounting practices where a first in first out (FIFO) system or a last in first out (LIFO) system is used. In either case the basis of the outgoing coins are known.

The odd thing would seem to be that as the outgoing coins are spent its necessary to determine if a gain (coins being paid at a price higher than basis) or a loss (coins being paid at a price lower than basis) is being recognized.

Ex. You buy one coin at $500 and another at $600. Coins are priced at $800 at the time of a future purchase. You buy something for $1,200, 1.5 coins. Using FIFO your basis for the outgoing 1.5 coins is $500 + $300 = $800, and the basis for the returning 0.5 coins is still $300. You experienced a gain of $400 on the 1.5 coins at the time of the sale and that $400 would seem to be taxable income. Apologies if I botched the math, hopefully the point gets across.

As of yet, there are no regulations governing how. (0)

Anonymous Coward | about 7 months ago | (#46869163)

Beer & hookers...

A Tax Professional's Dream (1)

esten (1024885) | about 7 months ago | (#46869183)

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.

Re:A Tax Professional's Dream (1)

bluefoxlucid (723572) | about 7 months ago | (#46869221)

Nobody is going to report the $100 of porn they bought.

Re:A Tax Professional's Dream (2)

neilo_1701D (2765337) | about 7 months ago | (#46869337)

Everyone is going to claim the $100 of educational research they bought.

There; fixed that for you :)

Re:A Tax Professional's Dream (1)

kruach aum (1934852) | about 7 months ago | (#46869685)

Who buys porn?

Re:A Tax Professional's Dream (0)

Anonymous Coward | about 7 months ago | (#46870109)

People who have just been given $100 in bitcoin, that's who. Seriously, if I ran a bitcoin-accepting porn site, you can bet that I'd be having someone put up a few fliers.

Re:A Tax Professional's Dream (1)

PRMan (959735) | about 7 months ago | (#46871253)

Dumb people. So probably not too many at MIT.

Re:A Tax Professional's Dream (1)

KingOfBLASH (620432) | about 7 months ago | (#46869651)

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.... (1)

Primate Pete (2773471) | about 7 months ago | (#46870347)

According to the IRS, bitcoin is a property, not a currency. For the IRS, bitcoin is the equivalent of real estate or shares of stock. You don't pay capital gains on currency, but you do on property.

Re:In the US, the tax code says so.... (1)

rjstanford (69735) | about 7 months ago | (#46871245)

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]

Re:A Tax Professional's Dream (1)

JesseMcDonald (536341) | about 7 months ago | (#46871435)

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.

It's college... (0)

Anonymous Coward | about 7 months ago | (#46869395)

Watch for the few accounts that the BitCoin flows into. Thems the drug dealers.

Campus money... (2)

niftymitch (1625721) | about 7 months ago | (#46869397)

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.....

Re:Campus money... (0)

Anonymous Coward | about 7 months ago | (#46873949)

You can do that with normal money and some universities already do.

Why? (3, Insightful)

Anonymous Coward | about 7 months ago | (#46869627)

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.

Re:Why? (1)

SuricouRaven (1897204) | about 7 months ago | (#46869835)

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.

Re:Why? (0)

Anonymous Coward | about 7 months ago | (#46870757)

What was the supposed problem that this is solving?

Too few people using Bitcoins? You can tell this is fantasy based, because of this line.

As of yet, there are no regulations governing how the students can use it.

Which is just plain silly. There certainly are laws and regulations saying what you can't buy with Bitcoins. Federal, state, city, and MIT itself has them. It's just that Bitcoins are helpful in evading those laws and laundering the profits.

Re:Why? (1)

DanielRavenNest (107550) | about 7 months ago | (#46873279)

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 extract excessive fees, or arbitrarily decide not do business with you.

Bitcoin solves the problem using a distributed public ledger, with a "proof of work" function and chained hashes for blocks of transactions. The distributed ledger means everyone has a copy, and can independently verify the history of transactions. The proof of work generates consensus by adopting the longest chain of blocks as the true history. It had the most work put into generating it. Chained hashes use the hash of the previous block as part of the data for the next block (along with new transactions). So any change to past data is detectable.

Since the software is open source, and anyone can create private keys and associated account addresses for themselves, nobody can tell you they won't open a checking account or give you a credit card. Finding block hashes and collecting the rewards and transaction fees is competitive, so fees are set by the market, and not by an oligarchic entity.

The Block Chain technology creates trusted records for transaction data in an untrustworthy environment. But since you can hash any kind of data whatsoever, not just financial transactions, you can keep trusted records for any kind of data. This has usefulness far beyond bitcoin itself, although few of those uses have been developed yet.

The idea behind it.... (1)

koan (80826) | about 7 months ago | (#46869841)

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.

Re:The idea behind it.... (1)

PRMan (959735) | about 7 months ago | (#46871275)

But even countries trying to ban bitcoin are having a hard time controlling it. Bitcoin is anonymous if you don't look closely, but if you really dig in and put resources toward investigating, you can track coins. It technologically enforces what the Constitution intended.

Re:The idea behind it.... (0)

Anonymous Coward | about 7 months ago | (#46871685)

None of that is relevant, what is going to happen is total adoption of digital currency, Facebook offers some, others will offer something as well, it leaks into the human psyche, the "Zeitgeist" and becomes the norm.

This give an unprecedented level of control to "them" (the powers that be).

Bitcoin becomes less relevant everyday in terms of anonymity as more and more "legit" services and goods are offered in exchange for it.

Better idea (1)

slashmydots (2189826) | about 7 months ago | (#46870071)

Cryptocurrencies rely on smartphones and wallet backups and encryption and time delays and blah blah blah. It's actually less convenient and easy than cash or credit. So what they need is an NFC-like system. Just get the "credit belts" from the book A Tale of Time City or something. Those worked pretty slick! With bitcoins the delay to verify that a transmission wasn't faked is up to 10 minutes. Even in litecoin, it's 2.5 minutes. That's a bit long to hang around and make awkward conversation with the checkout person at a shop while there's a line behind you. That alone will make it not work.

Next fall? (5, Insightful)

ArcadeMan (2766669) | about 7 months ago | (#46870353)

...giving each MIT undergrad $100 in Bitcoin (or about 0.22 Bitcoins) starting next Fall.

By next fall, 100$ in Bitcoin might be 0.0022BTC or 22BTC.

Re:Next fall? (0)

Anonymous Coward | about 7 months ago | (#46872781)

Actually, given historic trends, the probable range is 0.022BTC to 2.2BTC. The highest four-month shift was only 1000%.

Re:Next fall? (0)

Anonymous Coward | about 7 months ago | (#46874019)

1000% isn't enough growth for me, I'm moving to mitcoin.

Re:Next fall? (1)

DanielRavenNest (107550) | about 7 months ago | (#46873295)

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.

Why actual bitcoins? (0)

Anonymous Coward | about 7 months ago | (#46870675)

Actual bitcoins aren't all that interesting. They're roughly convertible to US dollars, something that students already have access to, so it's the equivalent of giving them back a small amount of money.

What would have been very interesting is if they'd created their own blockchain to create a currency unique to MIT and then make it valuable by accepting it for school expenses (tuition, housing, dining hall, bookstore, etc). The resulting experiment would be interesting to see...would we start to see small-scale industries where students paid for services from each other using the currency or would we simply see everyone use their ~$100 worth of MITCoin to pay for something and then see the currency die?

New MIT "Service" (1)

powerlord (28156) | about 7 months ago | (#46872987)

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".

Follow up offers (0)

Anonymous Coward | about 7 months ago | (#46875407)

And now The Bitcoin Betting Guide is giving 0.01 Bitcoin to any MIT student through Nitrogen Sports. It’s happening!

http://bitcoin-betting-guide.com/james-cannings-blog/free-0-01bitcoin-to-mit-students-for-using-nitrogen-sports/

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