Bitcoin (BTC), the digital currency and electronic payment system that allows users to conduct economic activity anonymously while circumventing traditional banking systems (and the governments that regulate them), has in the course of five years morphed from a tech geek fantasy into an increasingly mainstream phenomenon.
Ideologically motivated supporters view the currency as the libertarian and anarcho-capitalist alternative to top-down central banking, inflationism, and bureaucratic encroachment, while investment/finance types have been drawn-in by the currency’s rising velocity (BTC-related transactions reached an average of about 70,000 per day in recent months) and potential market value. Skeptics, however, question whether BTC is actually money. Has it really become a medium of exchange, a store of value, and a unit of account? And some doubters are wary of rapid price fluctuations and potential fraudulence that could turn away risk-averse individuals and businesses. Others argue that financial and tax regulators will eventually crack down on the currency, thereby sullying its attractive features.
At any rate, college students have become wildly enthusiastic about BTC. Bitcoin “clubs” have cropped up at a number of campuses, including the University of Michigan, Pennsylvania State University, and Ohio State University. These student groups are motivated to help more businesses adopt the currency and to support philanthropic causes. For example, one Ohio State student founded BitQuick, a BTC exchange site, and has assisted a local barbershop in accepting the digital currency. Other students have created BTC-based startups that specialize in crowdfunding altruistic initiatives (one Penn State freshman is working to fund a clean water project).
Last month, the University of Puget Sound in Tacoma, Washington, received 14.5 bitcoins (in fiat currency terms roughly $10,000) from a 2007 alumnus. The university claims that it is the first higher education institution in the United States to receive a BTC donation. In another implicit show of support for the digital currency, the president of the Massachusetts Institute of Technology wrote a letter to the student and faculty community expressing concern for a group of students embroiled in a legal battle with New Jersey regulators who claim the students’ startup, Tidbit, violates consumer protection laws.
While I’m skeptical of BTC but not digital currency generally (I tend to view BTC as the MySpace of online currency; other, better alternatives will probably appear in the coming years), it is refreshing to see students and even college officials express interest and support for this cutting-edge technology and to aid in the market’s discovery process. And who knows, maybe other universities will begin to emulate the University of Puget Sound and develop innovative ways to boost funding via BTC or spinoff digital currencies.
One thing is certain, though: college students aren’t wasting any time. A group of BTC supporters is working to organize a national collegiate cryptocurrency conference scheduled for April 2015. For those students, Bitcoin is to monetary systems what radio and internet were/are to communication systems. This is an exciting new frontier attracting some of the brightest and youngest entrepreneurial minds. Students want a piece of the action.