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What is the history behind the ~ in subdomains/university hosting for students? Why not or Any particular reason the ~ was chosen and not something else?

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Do you mean If so, that's a Unix question, nothing really to do with universities, - and there are plenty of people who'll be able to give a much better response than me – ChrisW Dec 12 '12 at 20:45
Its just *nix thing not really a matter for University. In unix ~ is a shorthand for home directory. ~username means the home folder for that user. – Lenin Dec 12 '12 at 21:01
As providing domain name for everyone is not possible or out of scope. They provide the user with their home folder with web accessible address like this. – Lenin Dec 12 '12 at 21:03

~ is usually short-hand for the user's home folder. Many HTTP web servers will interpret that as the user's home folder, then their public_html (or equivalent) folder, and serve up the page from there. This would allow companies to allow many people to host their own "sites" off their main site, without the need of extra permissions

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Historical reasons:
In unix the tilde (~) refers to your home directory.

For files already on your computer:
~: Your home.
~someuser: The homedirctory of someuser.

It simply makes sense if you look at it like this: -> General homepage of the server -> webpage of user on that server

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