April 8, 2014 12 min read

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If he is nervous about the upcoming meeting, Jeremy Gardner doesn't show any sign of it.

Today, Gardner and a friend, Daniel Bloch, will be sitting down with senior administrators in the development office at the University of Michigan to discuss what it would take to process university donations in Bitcoin. If the administration likes what they have to say, Michigan may soon become the first major university to accept Bitcoin gifts.

Gardner, a 22-year-old junior and recent transfer from Bard College, is a co-founder with Bloch of the College Cryptocurrency Network, a burgeoning association of Bitcoin clubs on campuses nationwide. In its first weeks, the network has already attracted important mentors, among them Will Pangman, who sits on the education committee of the Bitcoin Foundation. Circle, a well-funded cryptocurrency startup, wants to be a corporate sponsor. The meeting this week in Ann Arbor will be an early milestone marking a whirlwind two months since CCN's founding.

It will also be a sign that the full impact of Bitcoin has yet to be felt; indeed, that entire user bases remain to be tapped. "People are calling Bitcoin the money of the Internet," Gardner says. "I think it's going to the Internet of money."

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Gardner isn't alone in that thought. In fact, The Economist said as much in a recent issue. And despite some negative headlines this year, a growing number of investors are acting accordingly. Last month, Bitcoin startups Circle, Kraken and Xapo announced a combined $42 million in new funding. Venture capitalist Marc Andreessen pledged recently to invest hundreds of millions more in the Bitcoin space, on top of the $50 million his firm, Andreessen Horowitz, has already sunk in. Also last month, San Francisco-based hedge fund Pantera Capital announced the formation of a new $147 million fund for investments in digital currencies and related startups.

But even as venture capitalists, institutional investors and hedge funds begin to pour Scrooge McDuckian sums of money into this nascent ecosystem, an even stronger indication that Bitcoin has a future may lie on college campuses.

At first blush, student groups would seem a strange barometer of the future durability of a breakthrough technology. But think of how Facebook started at Harvard and spread to universities around the country, becoming a private club for college kids long before it opened up to everyone else. Then, too, think of which demographic propelled Snapchat to a multi-billion-dollar valuation.

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"The younger generation is always more open to adopting new technologies and new paradigms," says Dan Elitzer, a first-year MBA student at the Massachusetts Institute of Technology and CCN's regional director for New England. "If Bitcoin is going to be successful in the broader world, it's going to be successful on college campuses earlier than we see it in most other communities."

For years, youthful enthusiasm for new technology has been translating into huge windfalls for entrepreneurs and savvy investors. Ironically, this means that the key to Bitcoin's future may rest not with the investors themselves but with people like Jeremy Gardner.

The betterment of millions

Since he was 11, Gardner has been determined to leave the world better than he found it. He grew up the sort of person on whom global warming weighs heavily. He had always assumed the future held for him a life of public service, a career in politics. The son of a leading expert in Confucianism, he discovered Sun Tzu's The Art of War in high school and it came as a revelation.

Things flowed naturally from there: At Bard College, where he was an honors student, he built his own major, political strategy -- blending elements of political studies, economics, psychology and military strategy. For the last of these, he obtained special permission to take classes at West Point, the military academy.

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In the fall of 2013, he joined the campaign of Maura Healey, who was running for attorney general of Massachusetts. And that's where his life plan went sideways. Although Gardner believed Healey was the best candidate and deserved to win, he soon became disgusted with the role of money in politics, with the sheer amount of time that has to be spent raising funds rather than shaping policy, and he left.

For the first time in years, he didn't know what the future held. "There was this void in my life, where I wondered how I was going to change the world," he says.

Bitcoin has filled that void. It is a technology that Gardner believes could lead to the betterment of millions of lives. As a global transaction network, it could be used for remittances -- the practice of workers, usually recent immigrants, sending a portion of their pay back home to their families in another country. Remittances are a $550 billion industry, according to the World Bank. Established international money transmitters Western Union and MoneyGram charge fees as high as 10 percent for some amounts and destinations.

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One the other hand, all-in-one Bitcoin companies like Coinbase offer the ability to buy and sell bitcoins for fiat currency, store them in a cloud-hosted wallet and send and receive them from others. At most, users pay a 1 percent fee for transactions. (A payments industry insider recently confided to me that legacy money transmitters like Western Union and MoneyGram are seriously concerned about Bitcoin.)

"I think it's an incredibly democratizing technology," Gardner says. "All of a sudden, people who have come to America for the American Dream, and are trying to support their family back in Kenya, and are driving a taxi in New York, and who don't want to give 9 percent of their hard-earned cash to Western Union -- Bitcoin allows them to do that. That alone is a worthy cause for me to pursue."

But that potential wasn't immediately apparent to Gardner. Like many people, he first heard of Bitcoin in connection with Silk Road, the online black market which the FBI shut down last fall and which has since been resurrected under new management. Curious, he visited the site and poked around, but didn't buy anything. "Nothing I really want to get myself arrested for," he thought.

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By the fall of 2013, however, some of Gardner's more tech-savvy friends were telling him to buy bitcoins. He had doubts about its real value, but it sounded like easy money. His aunt had taught him the basic precepts of investing; he had been buying stocks for years. If Bitcoin was a bubble, it was one he could ride with a fair amount of confidence.

Moreover, he began to be convinced that the shutdown of Silk Road that October would lead to a surge in Bitcoin's value. He traded a few thousand dollars for bitcoins when the digital currency was worth about $140. He sold when the price went above $1,000.

So far, so profit. But Gardner wasn't willing to commit myself to understanding the technology behind this weird speculative commodity. Not yet.

A major revolution

His tune changed when he transferred to the University of Michigan in January. His roommate, Kinnard Hockenhull, is involved in a Bitcoin startup, and the other man was thrilled to have a sounding board.

Fired up by Hockenhull, Gardner began to read more about Bitcoin. The more he read, the more aware he became of its possible applications as a commodity, a currency and a transaction network. Meanwhile, he was obsessively reading Malcolm Gladwell's book Outliers in advance of a scheduled Jan. 27 appearance by the author in Ann Arbor. He was particularly fascinated by Gladwell's analysis of the fact that 14 of the richest people who ever lived were all Americans born within a nine-year period in the middle of the 19th century. Evidently they were born late enough to foresee the Industrial Revolution, the building of the railroads and the rise of Wall Street, but not so late that they weren't able to capitalize on these events. A similar pattern emerged in the early days of the personal computer revolution, and again at the dawn of the commercial Internet.

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"Every single day, I would read this Gladwell chapter, and I would read a bit more about Bitcoin," Gardner says.

Finally, at 2 a.m. on the night before Gladwell was scheduled to speak, Gardner was struck with the realization that Bitcoin may represent yet another watershed moment. "Holy shit, this may be it," he thought. "This is one of those major revolutions."

From that moment, he was hooked. He became active in the Bitcoin club at the University of Michigan, which is how he found himself on Feb. 5 on a videoconference call with Bloch, Elitzer and three other guys, members of the Bitcoin clubs at MIT and Stanford. Before long, they were agreeing to launch the CCN, with Michigan as its head chapter.

The network came out of stealth mode on March 25, announcing itself in a guest post for Bitcoin advocate Ryan Selkis's email newsletter. "At the CCN, we plan to relentlessly promote the spread of Bitcoin and related technologies like a megachurch pastor on Sunday morning cable," the founders wrote.

The response from universities around the world has surprised even them. The network already counts some 16 established member clubs -- among them Harvard and the University of Pennsylvania -- with some two dozen more in the works, including clubs in China, Australia and Europe. The parent organization intends to provide "educational resources, administrative documents, marketing materials and regional contacts that might be needed for a college student to start a crypto club at their school," Gardner and Bloch wrote in their March 25 announcement.

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Gardner is in the final stages of filing for 501(c)(3) status for the CCN, and he has decided on a big initiative for chapters in 2014: getting their universities to accept Bitcoin donations. There is a precedent: Earlier this year, Nicolas Cary, the chief executive of Blockchain, made a gift of $10,000 in bitcoins to the University of Puget Sound, his alma mater. But that was a one-time thing, Cary says, and he had a hell of a time making it happen. The school had no policy for handing digital currency gifts. In the end, administrators set up an account with BitPay, a payment processor, to accept the funds.

Gardner already knows what such a process would look like at the University of Michigan. Donors would be able to make Bitcoin gifts in two ways: either through a Coinbase-powered widget on the Michigan site (if they had a Coinbase account), or by sending bitcoins directly from the digital wallet of their choice to the university's own wallet address. The bitcoins in each transaction would be instantly converted into dollars in order to shield the university from Bitcoin's infamous price volatility. Coinbase already provides this service for Overstock and other retailers.

Before settling on Coinbase, Gardner spoke with representatives of BitPay and Circle. All three were interested, he says. "This could eventually lead to tuition payments and the like in Bitcoin, which would be massive. So there's a lot on the line for them."

The sky is the limit

Pangman is unmistakably impressed with everything Gardner and his peers have accomplished so far. "I feel like I'm a coach recruiting the national team for the Olympics," he says. "And I found my star point guard."

He envisions the college clubs serving as feeder programs for the professional world of Bitcoin companies. The Bitcoin economy has a market cap of $5.8 billion, and last year startups in the space received nearly $100 million in venture capital in the U.S. alone.

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"Colleges are fantastic petri dishes for any kind of experiment," says Pangman, who recently added Bloch and Gardner to the Bitcoin Foundation's education committee. For his part, he's waiting for the foundation's board to approve a grant proposal he submitted that would fund a broad university outreach program. He wants to build a network of faculty, especially outside of the computer science and engineering departments where enthusiasm for Bitcoin might be expected. A peer-reviewed academic journal for cryptocurrency research, he says, "is in the offing as well."

Meanwhile, startups -- including, quite possibly, some fostered by CCN clubs -- will be working to make it possible to use Bitcoin, both the currency and the protocol, without understanding the underlying tech in all of its complexity. After all, how many casual smartphone users actually grasp the inner workings of the magic brick in their hand?

If that can happen, the sky will be the limit for Bitcoin adoption. "In the short term it may not live up to the full hype, but in the long term, Bitcoin does for money and transactions what the Internet did for communication. It sets it free," Elitzer says. "We can't fully predict where that's going to go. But you've got to respect its potential, at least, to change the world."

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