A group of MIT students received $ 100 in free bitcoin in 2014 – some got rich, others squandered it on sushi – CNBC

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Dan Elitzer and Jeremy Rubin started the “MIT Bitcoin Project” in 2014.

Christophe A. Maynor

Jeremy Rubin was in his second year studying computer science and electrical engineering when he decided to give each Massachusetts Institute of Technology undergraduate student $ 100 in bitcoin.

Seven months later – armed with half a million dollars in donations from alumni and bitcoin enthusiasts – Rubin offered to do just that. 3,108 undergraduates took it up.

This was back when the world’s most popular cryptocurrency wasn’t that popular, trading at around $ 336. If all recipients of this free bitcoin had left their crypto wallets idle, the MIT Airdrop collective would have been $ 44.1 million richer compared to today’s prices.

But some students did not hold on.

Researchers retracing the project, including Christian Catalini, now co-creator of the Diem stablecoin project initiated by Facebook, say one in ten cashed in in the first two weeks. By the end of the experiment in 2017, one in four had cashed. The creators of the experiment then stopped tracking transactions within the cohort.

Van Phu, now a software engineer and co-founder of crypto broker Floating Point Group, still blames himself for spending a large chunk of his bitcoin on sushi.

“One of the worst things and one of the best things at MIT is this restaurant called Thelonious Monkfish,” Phu said. “I spent a lot of my crypto buying sushi.”

Phu wasn’t the only one bleeding out of his virtual rooms in this campus food court.

Quantitative trader Sam Trabucco, who also took part in the experiment, estimated that half of the people he knew were spending their crypto loot on fish.

“It was the only restaurant in Cambridge that accepted bitcoin at the time, and it was a pretty popular place,” he said. The restaurant has since changed its name and withdrawn its bitcoin payment policy.

The MIT experience

Rubin was halfway through a long legal battle with the New Jersey attorney general when he came up with the idea for the Bitcoin giveaway.

Unlike most 19-year-olds, Rubin told his friends that state officials accused him of being a “tough and tough cybercriminal” who “installs malware on people’s computers.” But Rubin says he just started a bitcoin mining program called Tidbit. The project had just won an innovation award at a local hackathon known as Node Knockout, and Rubin, now CEO of the Bitcoin Judica R&D lab, was proud of what he had built.

The episode ended with Rubin’s erasure, but as it happened he noticed his friends’ blank stares every time he mentioned the word “bitcoin”.

“I was like, ‘This is MIT. I thought everyone was on the cutting edge.’ And I realized no, it really wasn’t something that was so prevalent at the time, ”Rubin said.

And that’s how the bitcoin experience was born.

At the end of October 2014, Rubin and his fellow project manager Dan Elitzer, then an MBA student at Sloan, opened registration. Students who wanted the $ 100 worth of bitcoin had to fill out a few quizzes and review the teaching materials.

Jeremy Rubin touring the NYSE during an internship in 2013.

“We wanted to spread bitcoin more to the world and we wanted to spread the technology,” Rubin said. “We also wanted to study what it means to distribute a new asset.”

Students wishing to participate also had to create their own crypto wallet, which at the time was difficult enough to discourage participation. Yet in the end, 70% of the students ended up jumping through all of the hoops.

Phu was among the students who started a side business by opening crypto wallets for those who didn’t want to spend time figuring out how to do it and were willing to give up a percentage of their bitcoin in exchange for services rendered.

“A lot of students would pay other students half the bitcoin if they set it up on their behalf,” Phu explained. He says he helped between ten and twelve people set up crypto wallets in exchange for a commission paid in bitcoin. The fact that he spent $ 100 in bitcoin – worth over $ 14,000 today – on two dinners of sushi takes the spur off somewhat.

Trabucco says that when he was a student he didn’t think much about the project, although he managed to triple his bitcoin payout by playing online poker.

“Half of the people I knew recorded it as an event,” Trabucco said. As far as he was concerned, he thought bitcoin was cool, but “didn’t really think that was the future of finance.”

Phu, Rubin, and Trabucco all declined to share how much they’ve kept and how much crypto they’ve accumulated since their days on campus.

Massachusetts Institute of Technology (MIT) campus in Cambridge, Massachusetts

(Photo: Bloomberg / Getty Images)

Where have all the bitcoins gone

When CNBC spoke to Catalini, he was walking around to break the twelve to fourteen hours a day he spends on Zoom working on Facebook.

Among Catalini’s enduring takeaways is the fact that bitcoin just didn’t work as a payment method on campus.

“Even then, the technology was quite user-friendly,” he said. “Even in a fairly tech-savvy community like MIT, it was quite surprising how much work to use bitcoin was back then.”

But this inability to spend was probably for the best.

“What was fascinating was that in a way the students at MIT got it right. The vast majority held onto their bitcoin as an investment. And maybe that seems obvious given that the price has gone down. greatly appreciated. But I think in 2014 it was not at all clear that something that was worth at the time, I think $ 250, would be worth more than that, “he said.

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