The theory of diffusion of innovation was created in 1962 to explain how and why an idea or product gains momentary but huge spreads among a specific group of people. Usually those people are in the same social group. and being part of a social group makes you adopt new ideas, new behaviors and also sometimes new products. A perfect example to explain this theory is Bitcoin. You have probably heard in the past few months the word «Bitcoin». It was the trending topic, everyone invested in bitcoin, then bitcoin went down, then up again and so on. It was a rollercoaster of emotions.
But, what is bitcoin?
Bitcoin is a new digital currency that allows peer-to-peer transactions with zero or very low processing fees on a worldwide scale. Also, there is no bank, not a single administrator, with bitcoin there is no need of intermediaries. Two MIT students launched the MIT bitcoin project witch consist on distributing $100 to each MIT undergraduate student. The idea was to see how students use the bitcoin they receive, as well as promoting academic and entrepreneurial activity with the university.
Elitzer (one of the creators of the project) explained, “We decided to announce this project now to give students lead time. We want to issue a challenge to some of the brightest technical minds of a generation: When you step onto campus this fall, all of your classmates are going to have access to bitcoin what are YOU going to build to give them interesting ways to use it?’”
Elitzer used the theory of diffusion to persuade students. «When you step onto campus this fall, all of your classmates are going to have access to bitcoin». That made students invest more and more to bitcoin and also, this project made students and people from all over the world want to invest as well. Because they didn´t want to «miss out» and it was the trending topic. People saw it as a new opportunity and thought that if many people are investing, what could go wrong? They followed the tide and some people loosed money.
