How Blockchain can transform the value of Diplomas

How universities can provide immutable diploma credentials on a blockchain

Introduction

Diploma fraud is a as old as the ages, and in fact nothing new. Black market degrees and counterfeited diplomas have existed as far back as the 14th century. Since a recognized diploma considerably elevates a person’s status (especially Master or PhD degrees), university diplomas have valuable throughout the ages. And where there is value, there is fraud.

Although the news coverage on this topic remains very limited, Wired Magazine reports that so-called ‘diploma mills’ sell on average 200,000 fake diploma’s per year1. This accounts to approximately $1 billion in fake diplomas across the world. You can start to understand why this is such a lucrative business.

Typically, there are two types of fraudulent degrees. The first type are degrees from ‘non-academic’ universities, who are not under any kind of supervision from government agencies. Especially in countries who have not protected titles such as ‘master,’ ‘doctor,’ or ‘professor,’ this is the preferred method. A very famous case study in this regard is the Exact Empire, a Pakistani conglomerate that has sold over 215,000 fake qualifications2. The convicted company, that nevertheless still operates today, used hundreds of different educational institute names. With the interesting names such as “Nixon University” or “Belford University,” Exact makes millions of dollars literally printing paper

The second kind of diploma fraud is good old counterfeiting. You pay for a ‘fake copy’ of a diploma from a renowned educational institute (think about a Harvard of UPenn diploma) and buy a piece of fancy looking paper with your name on it. Although this second option is frequently even more expensive than the first, the risks are also significantly higher. The fake diplomas frequently don’t match the university’s database. So, if someone proceeds to verify official records, this in most cases means the end of someone’s career.

However, it is fair to say that the benefits of having a fake diploma significantly outperform the risks, given the amounts of yearly fraud. And unless you apply for a very senior position, the vast majority of diplomas do not get officially verified anyway. So would it not be great if we could find a way to resolve this problem once and for all?

Blockchain: immutable records for academic credentials

For the last years, I have been interested and involved in numerous blockchain projects, the infamous technology that powered the bitcoin hype of 2018. Although bitcoin has caused blockchain a very bad reputation, its underlying technology is extremely suitable to tackle this problem. Therefore, it is my sincere belief that blockchain can transform the value of diploma’s. And in the rest of this paper, I will explain why blockchain technology can address these problems.

The trust paradigm

If you think about it a little more closely, there is a significant parallel between ‘financial’ transactions and ‘diploma’ transactions. With a diploma transaction, I mean the issuance and acceptance of a diploma.

In a financial transaction, one party needs to send money, the receiving party should accept the money, and the transaction needs to officially verified. Diploma transactions are similar in every way. One party (the university) needs to issue a diploma, the receiving party (the student) should accept the diploma, and the diploma needs to be officially verified (by a government body). Although the stakeholders are all different, the basis transaction is in every way the same.

And if we draw the parallel one step further, we could say that both systems are completely based on trust. The financial system, as well as the education system are both based on trust. In financial transaction, all parties need to trust the value of the currency. In diploma transactions, all parties need to trust the value of the diploma. And because blockchain works with an immutable distributed ledger, the network can establish this trust by verification of the diploma. If a diploma could be verified by a network (for example of other universities) all connected schools would have the same trust in the diploma’s validity.

The immutable ledger of a blockchain

One of its core – and maybe most beneficial – properties of a blockchain is it immutable ledger. In simple terms, this means that every transaction that is added to the ledger is there to stay forever and cannot be altered by anyone anymore. Every diploma that has been issued and verified, will be added as a block to the chain, so that its authenticity and history can forever be retrieved.

And would this not be exactly what we aim to achieve in the case of diplomas. In the ideal world, we would like to have a (immutable) ledger that shows all diplomas that have been recognized and verified by accepted educational institutes (for example in a country). The ledger should be accessible publicly, so that any employer, school or agency could check the credentials of a student. In order to address data privacy concerns, this could be done by the use to tokens, by which students provide tokens to the parties whom they authorize to check the register. This ensures that not everyone can just start looking for the credentials of their neighbors.

The blockcert framework

A first step towards diploma credentials of a blockchain

In order to achieve this objective, one of the blockchain frameworks that can be easily used to accomplish this objective is the BlockCerts Open Standard for Blockchain Credentialing. This open source blockchain standard was originally developed by MIT Media Lab, in order to ‘enable a wave of innovation that gives individuals the capacity to possess and share their own official records’. As one of the first (working) credentialing services, this is the best open standard I have seen so far that could provide a working solution and technology to move credentialing onto a blockchain.

In summary, BlockCerts is an open standard for building apps that issue and verify blockchain-based official records3. These may include certificates for civic records, academic credentials, professional licenses, etc. A high level summary of the BlockCerts system is depicted in figure 1:

The role of the regulator

Because the code is open source, it is up to every individual government, university or school to use it in any way that they see fit. The best solution – in my opinion – would however be if governing bodies or regulators would take it upon them to define national standards for a (university) credential blockchain.

If governments would take it upon themselves (especially the Ministries of Education) would take it upon themselves to create national guidelines for an certification blockchain, they could resolve many of the fraudulent issues that would happen today. If national governments were to set up private blockchains, in which certifications could only be verified by recognized and acclaimed educational institutions, fraud could be significantly reduced.

In additional, it would make the ‘trust’ in certifications higher for all stakeholder. It is easier for universities, because they have one system for providing credentials. It is easier for students, because there would only be one source of truth. And last and most importantly, it would be easier for companies and agencies, who would have an easy way to check the validity of someone’s diplomas or credentials. It would be a situation in which life would become much easier for everyone involved. And last but not least, it would significantly increase trust in (academic) diplomas.