So, half a million dollars to raise the demand for bitcoin, while, as ever, the supply remains roughly the same.
Gosh, I wonder why governments like to maintain a flexible money supply?
I am not saying that that is the intention of the organisers. I am just postulating it as a thought experiment, on one of the downsides of having a fixed money supply.
Not that there are not also upsides. But there are also downsides.
If the supply of the currency were inflated to "print" money to give to MIT students, people would rightly protest. It would be a simple wealth transfer from the overall population of currency holders to a small group of students who are already some of the most highly advantaged people alive in the world today.
One purpose of this project is clear: to promote Bitcoin (or cryptocurrencies generally). The value of Bitcoin is higher since this announcement was made, regardless of what the price is.
That's a tired old criticism of Bitcoin. The creators of Bitcoin are well aware that they're basing the currency on financial principles not accepted in mainstream economics.
Gosh, I wonder why governments like to maintain a flexible money supply?
I am not saying that that is the intention of the organisers. I am just postulating it as a thought experiment, on one of the downsides of having a fixed money supply.
Not that there are not also upsides. But there are also downsides.