Blockchain technology: Enhancing education while cutting costs

Last Updated on December 18, 2024 by iSchoolConnect

From full approachability of knowledge and sleek management of student profiles to producing more inducements for learning through gamification and rewards systems, there are many achievements and benefits that educational institutions worldwide can access after encompassing blockchain technology. To survive in a competitive world, schools, colleges, and universities must take the first steps toward integrating blockchain technology into their ecosystems.

With recent developments in Artificial Intelligence, the Internet of Things, and Extended Reality, educational technology has become more wholesome and informational. Just as these technologies have been breaking the boundaries of many traditional practices and giving cross-country solutions that could be applied anytime and anywhere, blockchain technology too can bring about a revolution in the form of devolved storage, the permanence of already stored information monitorability, and clarity.

Why use blockchain in education?

Everything will be tokenized and connected by a blockchain one day. – Fred Ehrsam

The education system has been bearing the brunt of inefficient and traditional systems that lower the quality of education and make it inaccessible to the masses. Despite being one of the most rapidly expanding and growing industries, the educational sector faces many challenges, including inaccessibility to credentials and student records, invalid transcripts, and many more. However, these obstacles may be overcome by developing a system where stakeholders can easily collaborate, exchange information, engage in discussions and agreements, and be incentivized to get better results by earning rewards in the form of cryptocurrency.

Here are some key statistics highlighting the growing importance of blockchain in education:

1. Blockchain’s Economic Influence: By 2025, 10% of the world’s GDP (USD 100 trillion) is expected to be controlled by blockchain technology, with a significant portion in cryptocurrency, according to the World Economic Forum.
2. Education Spending Surge: Global education spending is projected to reach $7.5 trillion by 2025, highlighting the increasing need for technological innovation in the sector.
3. Blockchain Market Expansion: The Blockchain in Education Market is set to grow from USD 0.35 billion in 2024 to USD 6.52 billion by 2032, growing at a CAGR of 43.94%.

The rise of blockchain technology in education is set to improve security, transparency, and efficiency in managing academic records and credentials.

What is Blockchain Technology?

A blockchain is simply a digital log of transactions copied and disseminated over the blockchain’s complete network of computer systems. In simple terms, a blockchain is a homologous ledger that stores various information, including transactions. Each blockchain community member has his or her copy of the data. Information is categorized into different units called blocks and is secured by strong cryptography. No changes are permitted in this digital ledger, and if anyone attempts to perform a fraudulent activity, then its origin or source could be easily traced by the members of the blockchain community.

How does blockchain work?

It is a platform that ensures the probity of the information stored and allows the community members to interact. Here are some points that help us to understand how blockchain works-

1. Each blockchain community member can access all the information that is stored, including transactions and other information like credentials, certificates, etc.
2. If any updates are made to the network, it is added to the new block at the end of the entire chain. For example, a blockchain protocol tells us how these different blocks are documented, approved, and circulated.
3. A block cannot be modified or dissolved after it has been constructed. All the entries are made permanent, encrypted, and stored. All the members can easily view the history of all kinds of transactions and make necessary changes in the chain.
4. A concept called Smart Contracts comes into play between the community members. Smart Contracts are special kinds of agreements with terms and conditions programmed into them. Each party has to meet these conditions before receiving anything agreed upon. These contracts eliminate third parties and middlemen.
5. In blockchain technology, transactions form an integral part. It provides incentives for all the community members and allows them to contribute to the chain in various possible ways.

Blockchain technology’s role in lowering education costs

Making education affordable and accessible to all is one of the main aims of the educational sector. Blockchain technology can be employed to achieve this. It opens up new and affordable pathways for making the teaching-learning process more effective.

One of the most important tasks educators have is managing the tuition payments involving numerous parties, including students, parents, private loan companies, federal and state institutions, scholarship foundations, and financial departments of universities.

1. Blockchain technology facilitates pay-as-you-go courses and other open learning platforms, smart contracts, and cryptocurrency payment methods.
2. It also provides access to open educational resources like teaching and learning materials in the form of books, podcasts, and videos, and the majority of these resources are free of cost.
3. Blockchain technology allows the community members to freely share these resources cheaply and securely.

How can Blockchain Technology overcome challenges in the education industry?

1. Enhanced and transparent record-keeping

• Using irreversible blockchain storage, the school’s registrar’s office only needs to generate a student record once. Following that, information is available to all members of the educational system and may even be shared across organizations. Members may even be transferred between organizations.
• Every work, project, school engagement, and recreational activity is added to the student’s digital record as blocks and may be viewed on the student’s portfolio. As a result, instructors, counselors, and school officials can see their pupils’ growth from a bird’s-eye viewpoint.
• Apart from student records, blockchain systems may be used to oversee and facilitate certification of schools, colleges, and universities, secure proprietary information, and record forgery.
• Educational records saved on blockchain may be easily obtainable and distributed to other schools and organizations, including prospective employers.
• To gain entry to their profile, a student only has to share a link or IP address.
• This type of solution ensures absolute authenticity of credentials and student data since the entire history of revisions with signatures is stored on the blockchain.

2. Student accountability powered by smart contracts

• Teachers can utilize blockchain smart contracts to engage in electronic contracts with pupils over the performance of their duties.
• The agreement specifies all assignment criteria, including guidelines, delivery dates, and timeframes.
• After completing the work and meeting all of the agreement’s conditions, a student may be granted automatic access to the next phase of the course or receive credit and a completion certificate.
• Finally, smart contracts may play a vital role in offering customized learning inside a typical classroom setting and providing the incentive factor that traditional education systems lack.

3. Motivating students and instructors to reach higher levels of performance

• To motivate students and professors to engage in the educational process by creating new learning materials and researching, bitcoin and tokenized credits may be used to build effective incentive systems.
• Smart contracts may be written to reward fulfilled activities with bitcoin. Teachers will be able to further incentivize pupils by awarding extra credit to top performers.
• Finally, blockchain technology has the potential to fully exploit the gamification factor in current education and push it to the next level.
• Tokenized credits might be used to repay student debts, buy school supplies and learning materials, and cover other educational costs.
• Rewarding students for finishing a certain major and obtaining a university certificate may significantly lower the number of students who drop out without planning to complete college.

4. Learning performance tracking and individualization

• Because of the transparency provided by blockchain data storage, educators now have more resources to monitor and manage their students’ performance.
• Schools may provide a fully tailored learning environment by utilizing smart contracts and their output as tools to determine where a kid is suffering.
• Student performance data stored on a blockchain may be accessed and utilized to enhance educational practices by institutions across the school district.
• On a worldwide scale, this type of system might aggregate performance records at the local, state, and national levels, encouraging genuine competition among schools, colleges, and universities to provide the finest education possible.

5. Introducing verifiable lifetime transcripts

• Verifying credentials and compiling a comprehensive academic record is a time-consuming procedure involving several stakeholders.
• Blockchain technology might give students an online digital transcript that they can access whenever needed.
• This verified student lifetime transcript might include data on all educational accomplishments and simplify credential validation, making pupils’ migrations between schools easier.

6. Providing students with an educational achievement portfolio

• An educational blockchain platform can enable students to construct their digital portfolios containing their educational achievements.
• This portfolio can be publicly shared to illustrate a student’s merit for attending university or submitted to an employer by a student looking for a job.
• Eventually, a worldwide database of possible applicants might be built, and the best-performing pupils could be sought after by corporations, providing even more motivation to do well in school.

Challenges to incorporating blockchain technology in education

Despite the many advantages of blockchain, adoption in the area is currently very restricted. According to the Gartner poll, over half of higher education respondents are uninterested in implementing blockchain. Much of this resistance may be due to the difficulties connected with implementing the technology, such as security, scalability, adoption rate, and cost.

1. Security and scalability

Educational institutions have a massive quantity of data on their students and alumni, making blockchain scalability a challenge. As the amount of data included grows, the number of blocks required will grow, slowing the pace of transactions on the blockchain since each transaction requires peer-to-peer validation. This can be a serious hurdle when implemented on a large scale. Permissioned blockchains, on the other hand, outperform permission-less blockchains in terms of transaction rate per second.

2. Adoption rate

Like other technology before it, Blockchain only works when enough institutions and employers depend on it; graduates gain ownership of their credentials only if the schools or firms they are applying to recognize their validity.

However, with hundreds of institutions currently issuing and accepting blockchain credentials and a network of job sites such as Upwork and ZipRecruiter advocating their use, they may soon become the norm rather than the exception.

3. Cost

Although it might lead to cost reductions in other areas, adopting and deploying new technology can be costly. The costs of processing power and altering current infrastructure may quickly pile up. Furthermore, many institutions may lack the experience and abilities necessary to handle student information on a blockchain platform, mandating investment in educating school administrators on how to use the technology, which is costly and time-consuming.

Conclusion

Blockchain is predicted to significantly influence education, delivering benefits such as openness, streamlining, and the streamlining of routine activities. It improves record-keeping and provides better incentives for pupils to study and gain new abilities. Despite the challenges of implementing this technology, it is important to keep in mind that Education is where progress begins. This is precisely why this sector must be the most modern, and educators must always be on the lookout for new ideas.