On Education, Policy, and Technology


Two of the most prominent 2020 presidential candidates on the side of the Democratic Party – Sen. Elizabeth Warren and Sen. Bernie Sanders, are decided to eradicate student debt in the U.S and this may have a lot to do with cryptocurrency penetration in the higher education market.

As reported by CNN, Sen. Sanders offers a onetime cancellation of the $1.5 trillion to $1.6 trillion in student debt held by all Americans. Both he and Sen. Warrens speak of seeking to make public school tuition largely free, which if we give the benefit of the doubt, would turn into the single biggest re-engineering in the history of this multi-billion dollar industry. As part of the rapidly growing debate around the subject, ideas are getting more and more radical and certain types of institutions are being called out. Another of the trending Democratic nominees – Mayor Pete Buttigieg, said during a recent primary debate, as quoted by „Inside Higher Ed“, that „any debt forgiveness program should start with students of for-profit colleges“, accusing the latter in predatory marketing and recruitment  tactics. And to heathen up the rhetoric to record highs, Louisiana State University (LSU) picked the ‘right’ moment to unveil its $28-million ultra-luxury football locker room, while in the same time its flood-damaged library reportedly remains decrepit.

What all of these stories come to show is that the time has come to systematically discuss a path towards democratizing the access to financing and the distribution of profits among the stakeholders within the higher education ecosystem. One way we may be able to achieve this is through the systemic undertaking of acts of selflessness along the process of value-creation, based on open source blockchain technologies. The problem with the selflessness part, as one may suggest, is that selflessness is about being concerned more with the needs and wishes of others than with your own, which is hardly ever the scenario and less so – the beneficial one. It is, however, possible in the context of the stakeholder theory of Freeman – concerning about the financial well-being of students beyond their four years at college may benefit institutions more in the long run than focusing on draining their families’ accounts and indebting the young graduates for decades to come.

What if LSU, which turned out to be in the eye of the storm, was to raise these questionable  tens of millions of dollars for its sports’ facility through a security token offering (STO)? The university would have had no issues doing so, given the commercial viability of a college football infrastructure. Raising investments the standard way is definitely harder, compared to a profit-oriented corporate entity, but a university-driven crypto crowdfunding would be a meaningful investment scenario, which is worth being considered as an alternative.


A photo of LSU’s 28 million dollar locker-room. Source: https://twitter.com/LSUfootball/

What if the underfunded campus library was to tokenize its services and provide a direct utility to the tax-payer, whose money it would definitely make a good use of? Municipalities can issue bonds, so why can’t universities issue tokens? What if commercialization of research findings happens through a public crypto asset offering instead through big corporations that then internalize the profits from the scientific discoveries? What if the debt burden at the university was to be lowered by distributing the pressure from the financing of the above mentioned projects and in the same time – distributing the expected rewards towards the stakeholders involved in their backing? This is what crypto is all about –  exchanging value directly with someone without going through an intermediary. Politicians complain that this new form of value exchange happens primarily for illicit purposes, but many smart and noble applications are just waiting to be taken advantage of.

The financial world is already 10 years in the process of adapting towards the new asset class of cryptocurrencies since January 3rd 2009 when Satoshi Nakamoto minted the very first bitcoin (BTC). From the initial skepticism back then (of which a lot still remains), today the established financial industry is trying to offer some of the strongest use cases for blockchain, the underlying technology behind most cryptocurrencies such as BTC. The disrupted become disruptors.

As an example, blockchain is reported to reduce significantly the costs of ledger/ storage infrastructure and operations within a centralized banking system. And no wonder it does – with over $430 billion USD in money transfers recorded in 2015, the technology is considered to have immediate impact on the industry as blockchain allows for transparency in transactions without the need of an intermediary. Traditional transactions can take two to five business days. With the help of blockchain and cryptocurrencies, payments are processed and confirmed in a matter of minutes! It can safely be assumed that the institutional adoption of this technology innovation is proving faster penetration in many industry niches than what was initially anticipated by the market. Financial institutions such as JPMorgan and Barclays are already reaping the benefits of blockchain, so why can’t tech savvy universities do it in their own playing field? Those that were once at the forefront of technology innovation are now biting the dust of the cumbersome banking industry. Once implemented, blockchain can improve robustness, resilience and security of banks’ infrastructures – it can achieve the same for Academia! Billions could be saved up annually through applied blockchain innovations. Savings, which are aided by cryptographic codes and mathematical algorithms, originating in most of the cases from within an academic setting.

As innovation comes hand in hand with regulation, education scores yet another advantage, compared to finance, when it comes to implementation of crypto. Bitcoin, as an irreversible and anonymous means of payment, is sometimes considered as an attack on the control of banks and governments over the monetary transactions of citizens. A person or an institution cannot hinder someone to use Bitcoin or to undo a transaction. Bitcoin is perceived as money with a limited supply that is not changeable by a government, a bank or any other central institution – there are only 21 million bitcoins to be put into circulation and that is the end of the story. Therefore the political perception for an “attack on the governmental monetary policy”, which quite oddly, Facebook’s Libra project tends to brag about in its own white paper. To a certain extent, such digital currencies are indeed taking away the monopoly that central banks had on inflation or deflation through manipulation of the money supply. But while a campus-specific cryptocurrency has the potential to turn things around within the triple helix relations on a local level – academia, industry and governments, it falls short from achieving a ‘new world order’. Hence its bigger chance for a warmer embrace from governmental officials, whose limitations in providing the resources needed for financing the sector, combined with the pressure from the public to reduce debt, actually call for the introduction of a qualitatively new source of funding. If crypto is really just a big experiment, why don’t we leave it up to researchers to test it out and look at a college digital currency project as a sandbox, as a safe testing environment that divides wisely the experimentation piece from the “production environment” of the broader economy?

When we look at the history of Internet, we should remember that it was the fruit of the collaborative work of the state institutions, the academic and the hacker communities (hackers as in MIT’s „Tech Model Railroad Club“). Decades later, public authorities look unwilling to encourage high-level experimentation around new economic models, powered by Web 3.0 technologies and Universities remain relatively passive in adopting blockchain innovation in their own internal processes (e.g. blockchain-based validation and verification of degrees remain exotic). Instead of eating their own dog food, academicians do not actively experiment with campus currencies or tokens, limiting themselves to theoretic paper production and sporadic teachings on the subject.

The key ingredient in the 60s and 70s that helped glue the three sides together was the threat of a large-scale disruption, caused by the Cold War. Going back to where we started – can crypto make peace between the ever more divided parties, we might actually need to escalate the smoldering conflict we are facing today. Schumpeter framed it will – we might need a creating destruction! Will a tuition-free regime, similar to the one, which presidential hopefuls foresee, create this instability in the system that will be the tipping point of it all? Or will the foreseeable loss of relevance of the classic university diploma put a stick in the wheel of the higher ed. industry? In either way, this might not be the research experiment your university wants to take part in!

The risks, associated to such an experiment would be far greater than the risks, associated to even the boldest college use case of any local, industry-wide or nation-wide cryptocurrency or token-based scheme. Don’t get me wrong – the fact that we don’t name them here, does not mean there are no such innovators whose efforts in the field are worth sharing. But until these pioneers do not reach the policy debate stage at the highest level, they won’t stand a chance to achieve the much needed systemic change. Just a year back, Holon IQ outlined 30+ of the most promising projects in the field of blockchain application in education, coming all the range from industry giants such as MIT to small-scale startups. 12 months later, just a dozen of them are still operational. Which is a pity, because there pilot projects are addressing important deficits, tackling issues, ranging from the access to higher education through crypto-scholarships to the problem with the transfer of college credits beyond institutions, leading to drop-out rates of 40%. Yes, 40% of those enrolled in a U.S. college never get to complete it! Moreover, in fast-growing nations (both demographically and economically), such as India and Brazil, less than 20% of the general population even has an access to the higher education system! A system in which so many are left behind is a system worth fixing. Can blockchain and crypto be part of the fix? I think it is about time for the key decision-makers to give them a chance and figure out the answer!

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More on the subject can be found in my book ”Academia 4.0”. Access is provided below.

If you’ve liked this article, let’s open up the conversation! I am a co-founder of the Research Center for Shared Science & Business at the Technical University of Sofia, which explores the implementation of blockchain technologies in education. My main research work is on the „Open Source University“ project – a decentralized educational and professional identity solution, which was awarded with 2018’s “John Atanasoff” Presidential Award for excellence in information technology research. I am also the author of two books on the subject of policy and product innovations in higher education – “Academia 4.0 – University on the Blockchain” (2018) and “Stakeholder Management in Higher Education and Research” (2014).

Links to previous works of mine: