Not long after becoming the controller for the University of Maryland, College Park, Christina Ho walked into a colleague’s office and suggested that they work together on using blockchain technology to alleviate administrative burdens. The reception Ho initially received was less than enthusiastic.
“I thought she was crazy,” recalls Marchon Jackson, the university’s director of sponsored programs accounting and compliance. “Knowing a little about bitcoin, I was confused about how blockchain technology would apply to higher education. It sounded so far-fetched.”
Jackson’s reaction is typical. Because both the general and business media have widely reported on the volatility of bitcoin—a digital currency that operates on a blockchain platform—many people believe that deploying blockchain technology is synonymous with the risks of trading cryptocurrency. In fact, digital currency transfer is just one of many applications that is built on blockchain technology.
The food distribution industry, for example, has embraced the new technology as an effective means of tracking a product from the field or processing facility to the grocery store shelf. Say you want to know whether the lettuce at your local supermarket is truly organic, as advertised, or whether it has been subject to a recall. Using a blockchain application, a store manager could conceivably determine the lettuce’s origin, harvest date, and storage conditions in a few seconds. “They’re using blockchain technology to establish the value of the provenance, including the time the produce is on the truck and even the temperature of the truck,” explains Ho. “That’s where the ‘Internet of Things’ comes into play—a device on the truck monitors the temperature and sends a record to the block if the temperature exceeds a certain threshold that would not be safe.”
Another industry embracing blockchain is real estate, where transactions between buyers and sellers typically involve a contract and many supporting documents. Because blockchain automates verification of records as well as transactions, real estate closings that might typically take 60 or 90 days might happen in far less time.
Speedy and Decentralized
Blockchain has all the earmarks of a transformative or disruptive technology—think of how iPods changed the music industry or how smartphones have reshaped human communications. But what, exactly, is it?
Simply put, blockchain is a decentralized, distributed ledger technology. A new transaction or record, known as a block, is linked to the previous block through an embedded alphanumeric hashcode, or “digital fingerprint.” This creates a chronological chain of blocks, each connected to the one before it. As soon as a new block is added, all the computers on the same network—known as nodes—detect the addition and validate it. The more nodes on the network, the faster the validation process occurs. Actual data are stored off the chain and can be viewed only by those nodes having the correct cryptographic keys.
“This technology provides a mechanism to validate the authenticity of records, meaning you do not need a third party, such as a bank or an institutional records office, to provide that validation,” says Helen Garrett, registrar and chief officer for enrollment information services at the University of Washington, Seattle. “Also, because the chain of records depends on the information from the record below, the chain is immutable—you cannot remove or insert a record in the chain without the system noticing.”
Like many institutions, the University of Washington has incorporated blockchain courses into its computer science curriculum but hasn’t yet capitalized on the technology within its own operations. Garrett hopes to change that by continuing conversations among decision makers about blockchain’s potential. For instance, she plans to meet with the university’s vice president for student affairs to discuss the development of a comprehensive learner record that would encompass a student’s education, experiences, work history, research conducted, and so forth. Employers could use the digital record to confirm information on an applicant’s resume. “Using blockchain to validate the degree earned and employment could expedite the hiring process and make the process of matching talent to open positions more efficient and effective,” says Garrett.
She also envisions the not-too-distant day when graduates won’t need to request and pay for transcripts from their alma maters, which often take days or even weeks to arrive. Instead, each graduate will receive a customized hashcode to share with potential employers or other institutions needing to validate educational credentials. After entering the code into a specific website, the employer can quickly determine the validity of a degree without contacting the original issuer. This “self-serve” concept not only speeds up the validation process, it also gives the owners of the records—the students or graduates—more control.
In 2018, Central New Mexico Community College (CNM), Albuquerque, N.M., began offering optional digital diplomas via blockchain in addition to traditional paper diplomas. The pilot program was done in partnership with Learning Machine, a software firm that worked with the MIT Media Lab, Cambridge, Mass., to develop a digital credentialing standard known as Blockcerts.
“Through a completely automated process, our graduates received an e-mail congratulating them for successfully completing their degree program and containing instructions to download a digital wallet—a free app for their mobile phones—and register to receive the digital diploma,” explains Feng Hou, CNM’s former chief information officer and now the chief digital transformation evangelist at Maryville University, St. Louis, Mo. Of the 564 CNM graduates who received the message, 61 percent downloaded their diplomas.
The high acceptance rate of the new technology may have surprised Hou but not Natalie Smolenski, senior vice president of business development at Learning Machine. “Schools are teaching cohorts of digital natives who find it jarring and painful when they are thrown back into a largely paper-based world of credentials,” she says. “Also, students are going to frequently relocate and switch careers, and they need ways to demonstrate their achievements wherever in their careers—and in the world—they happen to be.”
Equally important to Hou was the reaction of local employers, who can verify an applicant’s CNM credentials for free via a digital wallet, website, or e-mailed link. He reports, “More than 40 percent of the community’s potential employers have used blockchain to verify learning credentials, which are very promising results.” CNM also has a microcredentialing solution in development. Working in partnership with IBM and several higher education institutions, the college is creating a blockchain platform that will easily incorporate skills-based digital badges earned by students into their educational records.
In addition, CNM has begun developing a blockchain solution to verify student IDs at all public higher education institutions in New Mexico and also received a grant from the city of Albuquerque to digitally record property liens. “Right now, it costs the city about $125 to process each lien. With a blockchain solution, we estimate that we can cut that cost by two-thirds,” says Hou. Once the property lien project is completed, CNM plans to use it as a blockchain case study for educating students.
An Administrative Application
At the University of Maryland, College Park, Ho and Jackson want to put blockchain technology to work in the research administration area. The university is partnering with Microsoft Corp. to develop a smart contract that includes data elements related to federal research grants, such as the type of award, award amount, and period of performance.
Grants call for regular communication among the principal investigator, the office of research administration, the sponsor, and other departments within the university, with the invoicing for funds and distribution of funds typically tied to project milestones.
“Communication is often lost in e-mails and phone conversations and fraught with delays and potential mistakes. A smart contract will allow communication to be quick, consistent, and visible to all parties,” says John Brown, cloud solution architect for Microsoft Education. When the principal investigator reports meeting a milestone, for instance, everyone on that blockchain will receive verification of the achievement at the same time.
“Research administration is so inefficient right now. You need an army of people to stay compliant with financial reports, constant contract modifications, and regulatory changes,” observes Jackson. “With blockchain, you know immediately if there’s a problem. For example, you don’t have to wait for a human to track down information to verify that a technical report or an invoice has been accepted because with blockchain you will know immediately when the transaction is processed.” He estimates that two-thirds of his 28-person staff currently concentrate on transactional reports and billings, rather than compliance activities or data analysis. A blockchain solution should greatly reduce the number of payment delays, payment errors, and audits needed.
“Expediting payment and reducing administrative burdens will make us more efficient and benefit the whole university ecosystem. Then we can spend more research dollars on doing research instead of administration,” says Ho. The timeline calls for completion of a prototype smart contract by the end of the summer, followed by a pilot program with an actual grant so the university can refine the user interface, the processes underlying the smart contract, and how the blockchain solution integrates with existing systems. Ho hopes to recruit a research sponsor from the federal government to participate in the pilot as well. “We fully intend to use smart contracts with other sponsors at some point,” she says, “but we’re focusing on the federal government first because they’re the biggest in terms of awards and the number of standards to meet.”
Beyond research administration, Jackson sees the potential for blockchain to transform financial aid management. He notes, “In a lot of audits, common findings usually relate to student financial aid and reporting on student attrition. A blockchain platform would enable the government and a school to interface with multiple systems to get the information each needs.” Higher education might also employ the technology in supply chain management to help students craft their educational pathways.
For institutions ready to explore the technology’s many possibilities, here are some starting steps:
- Provide explanations in layman’s terms. Feng Hou created a short “Blockchain 101” PowerPoint presentation to introduce the technology to campus leaders at CNM.To help people understand the technology’s benefits and value, he keeps the explanations simple—such as likening blockchain to a gigantic spreadsheet that is tamper-proof. “I often say that blockchain is like the internet and bitcoin is just one application, like e-mail, which gives people familiarity and some comfort,” he notes. Similarly, a blockchain interface should be intuitive, user-friendly, and accompanied by clear instructions to promote usage.
- Encourage exploration. Hou has found that many higher education leaders mistakenly believe blockchain technology is expensive to deploy and best suited to high-tech endeavors. A bit of education can clear up confusion about what blockchain is and isn’t. Ho, for example, sent Jackson links to articles and videos that explained blockchain technology and helped him conceptualize it visually. Attending technology conferences and meeting with vendors can keep the conversation going, even if your institution isn’t yet sure how it will use the technology.
- Focus on business needs. “Any blockchain solution should be driven by the institution’s strategic priorities,” says Hou. Start by identifying areas known for administrative bottlenecks, time inefficiencies, or paperwork-heavy processes and determine—perhaps with the assistance of a vendor—how the implementation of blockchain might streamline operations or bring additional value. “Any activity that involves validating a record and making sure someone did or didn’t do something is right for this technology,” adds Garrett. Because the blocks are immutable, for example, the technology could speed up background checks, put a crimp in identity theft and diploma fraud, and slow down or even stop embezzlers.The tamper-proof nature of any block within the chain, however, underscores the need for accuracy. “It’s extremely important to make sure all data—such as student names, degrees, and dates—are entered accurately,” Hou emphasizes. “If a name is misspelled, you cannot change it—it will stay on the blockchain forever. You’d have to issue a change, which then becomes the more recent block in the chain.”
- Keep the circle small. “Change management is a challenge in higher education, so don’t get the entire university involved in the early stages of a project,” advises Ho. She and Jackson purposely limited the number of people who are aware of the smart contract they’re developing, aside from their bosses. “We don’t want to go to any of the vice presidents without a prototype and a clear presentation of how this technology will save on the bottom line and reduce administrative burdens in sponsored research,” says Jackson.
- Keep talking. As with any new technology, blockchain will have its share of early adopters and naysayers, with the majority of people falling in between. The more the business office talks about blockchain’s value in both time and money, the more others on campus will take note.
“The technology is still new enough that my goal is to just get higher education to listen to the buzz and be willing to consider cases being made for adoption,” Garrett observes. “Imagine our lives not now but 10 years down the road: That’s what this technology represents. And 10 years from now, calling your school to get a transcript will seem odd—why bother doing that when you can just use your code?”
SANDRA R. SABO, Mendota Heights, Minn., covers higher education business issues for Business Officer.