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Comment by downandout | Hacker News Reader

Perhaps I'm wrong but wouldn't it make more sense to actually just use the open source Bitcoin software to create their own altcoin......perhaps call them Mitcoins? They could give the initial, easily mined Mitcoins away to students, and spend the $500K on promoting it as a viable altcoin and getting the major exchanges to add it to their trading mix. With the credence lent to it by MIT, it would stand a far better chance of success than other altcoins, and the students that keep their initial coins would likely wind up with far more than $100.

This just kind of seems like they are squandering the $500K, and are completely ignoring their greatest asset: their association with MIT. That name carries alot of weight with the type of people that buy these currencies.

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That sounds like an awful idea WRT some bright spark will duct tape together a table covered in FPGA boards, take over 51% of the likely extremely small local altcoin network, then temporarily own every laser printer, soda machine, and cafeteria on the campus. Unless their altcoin gets into some weird whitelisting situation where some P2P hosts are more equal than other P2P hosts, which is screwed up.

On the other hand it sounds like a brilliant idea because there is some volatility in the BTC market, so you'll get some peculiar behaviors, where the infrastructure was originally implemented to get the lab monitors and food service workers out of the cash handling business, sometimes a laser printer page will cost five cents or ten cents under BTC or they'll be playing games with dynamic costs such that you may get considerably more paper or food at certain times of the semester than others if you provide a fixed qty of BTC.

Because this way they can trade each other bitcoins for goods. If they just gave everyone mitcoins, they would be worthless for a while, and most of the students wouldn't care to even use them.

When I went to college, we could use our ID cards to pay for printing, meals in the student union, etc. If MIT did something similar and accepted "Mitcoins" for transactions done on campus, they would give the currency an inherrent value.

There is already a TechCash system for making purchases with an MIT student ID. All the on-campus food vendors accept it, as well as the student bar. No need for crypto-currency, there's already a functioning local system.

they could pin the value of the techcash currency to the USD/BTC rate

Because their goal is to provide students with a useful infrastructure they can creatively extend, not a copycoin-pump-and-dump.

Because the usefulness of money is proportional to its liquidity.

If you buy supplies with USD, and sell them for MITCoins, you are critically dependent on a small bid/ask spread, and there won't be if the only holders are MIT students.

Consequently, you would be able to choose to buy for USD at a store, or for MITCoins and pay a markup that is equal to the spread (since the buyer needs to pay the ask (to get his MITCoins) and the seller gets paid the bid (to get USD to buy new supplies)).

This would mean that no trading would ever begin.

I agree, in using a cloned 'MITcoin', there is less danger of serious money being stolen or lost, (assuming the coins are only used for low-value services like photocopiers or vending machines, etc). This would give a substantial community a gentler intro to how Bitcoin works.

There was a similar idea with Auroracoin.

Last I heard it was forked by attackers and destroyed.

Smaller coins leave you more vulnerable to shenanigans.

UPDATE:

Correction, AUR issued a patch, was not destroyed:

https://bitcointalk.org/index.php?topic=552895.0

Still, smaller coins are tough to manage.

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