In 2014, when bitcoin was trading around $336, computer science student Jeremy Rubin raised $500,000 from alumni and other donors to fund a project to see how people used a new kind of asset called bitcoin.
The experiment’s idea was to give away $100 of bitcoin to any MIT undergrad that wanted it; the only thing they had to do was fill out a survey and review some brochures. A lot of students bit (nice pun) at the offer: around 3,100 of the 4,500 students on campus.
So what happened?
Christian Catalini was an assistant professor at MIT back in 2014 and is one of the researchers who has traced the results of the experiment. By the way, he is also the co-creator of Facebook’s Diem stablecoin project, formerly known as Libra, so the guy wears a few hats.
The results.
- 1 in 10 cashed out in the first two weeks.
- By the end of the experiment in 2017, 1 in 4 had cashed out.
Takeaways. Catalini had the following comments about the use of bitcoin as a method of payment: “Even at the time, the technology was quite user unfriendly. Even within a pretty tech-savvy community such as MIT, it was kind of surprising to see how much work it really was to use bitcoin at the time.”
“What was fascinating is that in a sense, the MIT students got it right. The vast majority held on to their bitcoin as an investment. And maybe it sounds obvious given the price has appreciated so dramatically. But I think in 2014, it wasn’t clear at all that something that was worth at the time, I think $250, would be worth more than that,” he said.
Many of the students who didn’t hold on to the $100 in bitcoin blew it on sushi at Thelonious Monk, a popular local sushi joint.
Collectively, if all the students had held on to their bitcoin, the airdrop would be worth around $44M at today’s prices.
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