Blockchain and The Future of Education

Blockchain Can Verify Information, Reduce Fraud, and Help Create the Next Generation of Educational Institutions

Today’s education system faces more challenges and issues than ever before, particularly in the United States. Vast increases in college tuition, heightened administrative costs, and other issues have only emphasized the need for change in the educational industry. 

Blockchain technology can’t fully cure any of these problems, but it can help create new solutions that can help move our educational system in the right direction. While blockchain technology can improve all stages of the academic process, in this article, we are focusing on blockchain’s applications specifically for higher education. 

Blockchain Can Reduce Educational Administrative Costs 

With many American public colleges charging close to $100,000 for a four-year degree, and many private schools charging more than $200,000 for one, nearly everyone agrees that education is incredibly overpriced, at least in the United States. 

Many chalk this up to the concept of “bureaucrats and buildings,” meaning the hiring of additional employees that do not teach or conduct research, as well as irresponsible spending related to on-campus infrastructure, such as high-tech lecture halls that may rarely be used, or unnecessary athletic or recreational facilities. 

Blockchain tech cannot prevent irresponsible administrators from creating bloated budgets or building new buildings. However, it can reduce the cost of various expenses related to record-keeping, accounting, and accreditation, which could prevent the hiring of unnecessary employees or even allow institutions to cut their staff, potentially allowing schools to reduce tuition prices. 

By creating an immutable record of administrative spending, blockchain technology can also create a more public record of how schools spend their money, which could incentivize cost savings, as well as prevent externalities such as fraud and embezzlement. 

If some colleges adopt these measures and can effectively cut costs and increase transparency, it could create more competition between colleges and universities, encouraging cost-cutting to keep up student retention. 

Blockchain Credentials Can Help Reduce Rampant Educational Fraud 

While many people work for years to obtain a degree, others simply edit their resumes and add one. This type of fraud is far more common than one might think; according to a survey by CareerBuilder, 75% of HR managers have caught a job applicant lying on their resume. Unfortunately, one of the most common types of fraud is degree fraud, with applications lying about grades, the degree they received, the school they attended, or all of the above. 

Even if an individual does not commit outright fraud, they may have purchased a degree from a “diploma mill,” a fraudulent business issuing degrees on behalf of closed or non-existent schools. This can have a similar effect as directly lying on a resume, as it creates a false impression in a hiring manager’s mind as to the true qualifications of a candidate. 

While some may think this is a victimless crime, it nullifies the hard work of those who actually do achieve degrees and creates an unlevel playing field. For some professions, fake degrees could also lead to serious legal or medical consequences. For instance, a fake English degree may be a serious problem, but a fake nursing or medical degree could lead to the death or serious illness of patients. 

Unfortunately, fraud does not only occur outside educational institutions, it also occurs within them. In many cases, college and university professors have been found to be faking their credentials. 

Fortunately, blockchain technology can do quite a lot to reduce this type of fraud. As in other educational areas, the creation of a decentralized ledger can make an immutable record of each student at an institution, their grades, and any diplomas they have received. A blockchain oracle, a third-party application that interfaces with the blockchain, can help process queries by hiring managers or others who wish to access the information. 

Groups of educational institutions, such as those approved by a regional or national accreditation body (for example, the Southern Association of Colleges and Schools in the southeast U.S.) could pool students’ information into a shared blockchain database, making it easy for potential employers, academic institutions, and even members of the public to verify that an individual received a specific credential at a specific time. 

Blockchain Can Also Help Reduce Plagiarism 

Even with the advent of common plagiarism checkers like Grammarly and Turnitin, plagiarism is still a major problem in academic institutions of all types. While traditional tools can be used to root out direct plagiarism from online sources, it’s more difficult to root out plagiarism in between students– and that’s where blockchain comes in. By creating a decentralized ledger of all student work at a specific institution, academic papers can easily be compared to the papers of fellow students. 

This would allow teachers to compare a paper written today not just to the papers of fellow students in that particular class, but to all academic papers written at that school since the inception of the ledger. If a shared blockchain ledger was to be used by multiple institutions, it could also compare a specific piece of work to the work of other students taking similar courses at nearby institutions, or even nationally. 

Since entries on a blockchain ledger are timestamped, the ledger could also be used to prove who truly wrote something first, in case a dispute were to arise. 

However, just like the problem of degree fraud, plagiarism isn’t only something that students do. Professors, post-graduate researchers, and others also commit acts of plagiarism. This plagiarism is perhaps even more insidious, as it often occurs when academics submit articles or studies to scientific or academic publications. 

Especially when dealing with serious subjects, such as medical research, the plagiarism of studies or results could lead to scientists or doctors making faulty research conclusions. This could significantly impair the quality of research being conducted and could even lead to the loss of lives via medical breakthroughs that were not achieved due to plagiarized work. 

One academic paper suggested the use of a public-key cryptosystem, utilizing the commonly used SHA-256 hash function and Elliptic Curve Digital Signature Algorithm (ECDSA) for signing. If a paper is plagiarized, it will be rejected from the ledger, with an immutable record created of the individual or group who submitted it. This system would also make it impossible for a user to change the paper afterward in an attempt to hide their plagiarism. 

Blockchain Can Allow Decentralized Academic Institutions to Flourish 

While the traditional colleges and universities model may be here to stay, more and more of our education system has gone online. 

Major colleges and universities now offer many of their degrees online, and even those that do not offer official degrees often offer certificates or free courses online. In addition, independent online course providers, such as Udemy or Coursera also provide low-cost courses on thousands of subjects, from computer science and engineering to art, design, and music. 

Unfortunately for students, online, non-degree courses and curriculums have yet to hold the prestige of getting a degree from a traditional academic institution. In many cases, a purely online learner without a degree may be better informed, or even better prepared for a career in a specific subject. However, they are far less likely to be hired than a less-qualified candidate with a degree, even an unrelated one. 

With the cost of higher education so high, many have decided to ditch it altogether, though this often leaves them at a disadvantage. What may be needed, and what blockchain could make possible, is an entirely new type of academic institution– free from high costs and administrative bloat. Specifically, academic institutions formed as DAOs (decentralized autonomous organizations) could practically eliminate the need for administrators, as they would exist as a series of smart contracts between students and teachers.

If enough professors came from well-known, reputable institutions and formed a DAO, it could, in time, generate the reputation needed to help graduates secure jobs equal to– or even exceeding, graduates of traditional academic institutions. In medieval times, the university was simply a contract between students and professors– and, while much has changed since that era, this is a concept that would do well to be reintroduced into our modern, administrative model of education. 

Decentralized educational institutions, whether DAOs or not, could issue coins or tokens, which could potentially be purchased by the general public to invest in the success of the institution. This would create a novel model of educational funding that could significantly disrupt the current system. 

Blockchain Can Help Encourage High-Performance By “Gamifying” The Educational Process

In education’s long history, it’s almost always been the case that students pay teachers (or the institutions they work for) for the right to take classes and receive an education. However, what if that model were reversed? Some believe that it should– and that students should actually be paid to learn. This may sound unrealistic, but some believe that “gamifying” the educational process could lead to better outcomes for students and teachers alike. 

For instance, students could be awarded small amounts of cryptocurrency for turning in an assignment on time, taking a challenging course or degree, or even mentoring other students. All of these activities could be verified through smart contracts attached to a students’ wallet. While these payments may not be particularly large, even small payments could help incentivize students to engage in more productive behaviors, which could save institutions, educators, and students a significant amount of time and money. These funds could come out of the tuition students already pay as part of an educational reimbursement program. 

Of course, this system could also be gamified on the teacher’s end– with cryptocurrency awarded for creating or presenting lectures, mentoring students, or grading papers or other assignments on time. 

Blockchain Could Also Revolutionize the Student Loan Process

American students currently have more than $1 trillion dollars in student loan debt, with many struggling to pay it off. Student loan offers are fraught with complex agreements, unclear terms and rates, and are often rife with fraud. However, blockchain technology is poised to address some of the issues via novel economic arrangements.

For example, instead of taking out a traditional student loan, a student can enter into an income share agreement (ISA), which permits students to get funds to pay for their degree by trading in a specific percentage of their future earnings. For instance, a student might be able to get a $40,000 loan in exchange for paying back a certain percentage of their future earnings for 10-12 years after they graduate. The funds will go to the company or investor who funded their education. All of this is done via smart contracts and the tokenization process.

Fortunately, companies are already at work to make this vision a reality. Open Esquire is one firm that has partnered with OpenLaw, a company that helps design legal contracts that work on the Ethereum blockchain, to create tokenized income share agreements to provide educational financing. The Open Esquire platform underwrites the investment agreement based on the student’s desired financing amount, the degree they hope to achieve, and their likely earning potential post-graduation. Currently, these ISAs are being distributed via a company called Polybird, which operates an exchange, Polybird exchange, to allow investors and students to engage in these income share agreements. Ideally, these arrangements could significantly impact loan default rates, and, one day, could even make traditional student loans obsolete. 

However, blockchain technology isn’t just limited to generating new forms of education financing; it can also help those issuing and receiving traditional student loans.

In many cases, student loans are offered to prospective college students under false pretenses. In other cases, loan money is sent directly to a school and is not actually used to fund a student’s education. Sometimes, schools illegally sign for students’ loan disbursements, without them even knowing. In addition to these issues, student loan identity theft is a major problem, with identity thieves taking out millions of dollars in fraudulent student loans each year. 

Blockchain systems could help address each of these issues through better security and a better user verification process. Specifically, blockchain databases can be used to ensure a prospective student borrower has received the correct information before signing a loan agreement and could use an assigned key to verify their identity prior to signing. In addition to holding a cryptographic key, students could also be required to utilize biometric information to confirm their identity, which could make it much more difficult for fraudsters to fake a student’s identity. 

This type of system could also be used to allow students to verify each additional payment and how it is being spent to ensure that fraudulent transactions do not occur on behalf of the student, the school, or the lender itself. For federal student loans, blockchain ledgers could also be used to verify a graduate’s current income for income-based student loan repayment programs. 

In addition, student loan lenders and servicers could take a cue from the healthcare industry by creating shared ledgers of student loan applications and disbursements, which could help prevent identity theft. For instance, if a first-year student is taking out loans to get an undergraduate business degree from a school in New York, and an application with their name pops up for a medical school loan (from a different lender on the shared blockchain) for a school in California, the ledger could issue a “red flag” and stop the suspicious application until the issue can be resolved. 

Examples of Blockchain Education Startups Helping Transform Education  

While we’ve discussed many of the potential applications of blockchain technology in the education sector, here are a few companies that are actually attempting to implement the technology in the real world: 

• Blockcerts: Developed at MIT in Cambridge, Massachusetts, Blockcerts is an open platform that allows for the creation of blockchain educational certificates, including transcripts, degrees, and diplomas. In 2018, more than 600 MIT grads opted to get a digital version of the diploma on Blockcerts’ blockchain. 
• Disciplina: Located in Tallinn, Estonia, Disciplina utilizes blockchain technology to create a single ledger of each student’s academic performance across various classes and disciplines. A decentralized algorithm assigns a score to students, which can be used to create specialized learning plans based on a student’s individual needs. 
• Edgecoin: Edgecoin is an “educational stable coin” that allows students to pay schools for expenses including tuition, enrollment fees, books, housing, and other items via a high-speed, decentralized application.  
• Tutellus: Tutellus is an educational company that’s expanding blockchain education initiatives for the Spanish-speaking world. By using their native TUT token, students are paid for learning, and educators are paid for teaching. 

The Importance of Oracles for Blockchain Education

Blockchains are generally closed-end systems, which is why they need third-party applications to access “real-world” information. These third-party applications, called oracles, are essential in nearly every type of blockchain application, and that includes those created for the education industry. As we mentioned earlier in the article, one important use of oracles is to process off-chain data requests by potential employers or other academic institutions for student or alumni information, such as grades, diplomas, certifications, and other essential data. 

Some of the educational models we’ve mentioned will use tokens or coins to either help students pay for their education or to directly pay students or teachers for engaging in educational activities. In these cases, oracles will also be needed to confirm coin and token prices, particularly if these coins are being swapped or traded on major exchanges. 

SupraOracles is Positioned to Provide Secure, Accurate, and Fast Pricing Data for the Blockchain Education Revolution 

While oracles are essential for blockchain applications in every industry, including education, major issues still remain with oracle technology. The need to trust a third-party software provider can often eliminate the very benefits that blockchain provides; this is referred to as the “oracle problem.”

To fix the oracle problem, a solution must be highly secure, highly decentralized, and be able to provide fast information across blockchains. It must also use an effective consensus mechanism to encourage good behavior amongst oracle nodes and prevent fraud, manipulation, and collusion. 

With its powerful decentralized architecture of clans and tribes, cutting-edge encryption, efficient consensus process, and fast finality, SupraOracles is positioned to empower the next generation of blockchain applications– including those focused on education. 

References

1. Simon, Caroline (2017, Sept.) Bureaucrats And Buildings: The Case For Why College Is So Expensive. Forbes. 
2. (2017, Sept. ) 75% of HR Managers Have Caught a Lie on a Resume, According to a New CareerBuilder Survey. CareerBuilder. 
3. (2015) Your Organization’s Reputation on the Line: The Real Cost of Academic Fraud. National Student Clearinghouse.  
4. (Andi, A., Purba, R., Yunis, R.) (2019, Oct.) Application of Blockchain Technology to Prevent The Potential Of Plagiarism in Scientific Publication. ResearchGate. 
5. What is a decentralized autonomous organization, and how does a DAO work?. Cointelegraph. 
6. (Daley, Sam) (2021, May) 9 Blockchain Education Companies Earning Straight A’s. Built In. 

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