Tidbit was a student hackathon project, created by Jeremy Rubin and his classmates from MIT. Developed during the Node Knockout Hackathon in 2013, Tidbit offered a new way of monetizing websites and other online content, breaking a couple of laws during the process. Eventually Tidbit faced legal action from the New Jersey Division of Consumer Affairs for violating user privacy.

Winner of the “most innovative” project award at the hackathon, Tidbit allowed websites to tap into the processing power of the users’ computer for bitcoin mining without their knowledge. Bitcoin mining is an energy and cost intensive process where the miners solve complex equations to verify bitcoin transactions on the Blockchain. Miners in turn get rewarded with bitcoin. Rubin had allegedly advertised Tidbit to website developers as an option to monetize their website without ads and the advertisement also mentioned “let your visitors help you mine Bitcoins”.

Any bitcoin mined with Tidbit, while utilizing the processing power of users’ computers are presumed to benefit the website owners and Tidbit, while the users didn’t get anything out of it. The proceedings against Tidbit and its creators concluded few days ago with both parties reaching a settlement. The terms of the settlement prohibits Rubin and his team from accessing computers without the owners’ consent in New Jersey area.

Electronic Frontier Fund provided pro bono legal service for Tidbit’s creators. The attorney representing Tidbit contested that the software was just a proof of concept and it was never released as a fully functional product. However, during an investigation back in November 2013, Tidbit was found to be running on at least three different websites in the New Jersey area and the creators had distributed the software to web developers without reviewing privacy policies, compliance and review mechanism or control in place. The Division of Consumer Affairs, authority in charge of the investigation had found Tidbit in violation of the New Jersey’s Computer Related Offences Act and Consumer Fraud act.

If Rubin and his associates are found violating the terms of the settlement, they are liable for $25,000 in fines. According to the acting Attorney General John Hoffman, the state doesn’t have any intentions of stifling innovation or discourage entrepreneurs, but it is very important that they operate within the confines of the law without affecting the customers.

Even though, it seems ironic that the same government that spies, collects personal and private data from its own citizens and rest of the world alike to be concerned about invasion of privacy. But still that doesn’t give the right for the companies to throw their weight and innovations around with blatant disregard to rules and regulations set by the governments and other regulators for safeguarding the interests of the general public.

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