MIT Envisions ‘Job Signaling’ on Bitcoin’s Blockchain
Blockcerts, an open infrastructure for academic credentials on the Bitcoin blockchain, announced its launch October 24, which is the result of 12 months of effort to update academic and professional accreditations in line with 21st-century technology.
With the Bitcoin blockchain providing a tamper-proof, verifiable record of academic or professional achievement, Blockcerts is decentralizing the credentialing system and was brought to life as a research project by the MIT Media Lab, led by Philipp Schmidt and Juliana Nazare. The first version of the code was released June 2, 2016, and now the team has improved on it significantly, releasing it to the public so applications can be built on top of the Blockcerts infrastructure.
Job Signaling on the Blockchain
The current system for managing certificates is slow and complicated, due to its mostly analog nature, and this is one reason why degree fraud is a real issue. By digitizing certificates using Bitcoin, credentials will be more transferable and verifiable, reducing distortion in the labor market. ‘Job signaling’ is a concept introduced by economist Michael Spence, arguing that the costs in terms of money and effort embodied in years of education can serve as a signal to employers that the individual is high ability or hard-working.
However, in recent years, the instances of fraud and counterfeit degrees have introduced distortion into the signaling process. Even the MIT Admissions office has been fooled, whereby its Dean did not actually have the undergraduate degree that she declared in her application. If Blockcerts were to become widely used, these ‘false signals’ could be detected by employers instantaneously, without having to confer with anyone except the individuals themselves. By counteracting such fraud, Blockcerts goes to show that Bitcoin could not just help reverse the degradation of money itself, but also of professional qualifications.
The infrastructure built by Blockcerts could also help with widening the recognition of fairly uncommon qualifications. For example, there are millions of apprenticeship records and certificates in the US but no systems to manage them. Blockcerts is zeroing in on this area, looking for collaborators to build example implementations outside of the MIT Media Lab. Moreover, they also want to make corporate training more fluid between companies, to track the results of training opportunities and provide portability for these achievements.
Professional Credentials in Your Wallet
Universities can start to issue digital academic certificates, registering it on the Bitcoin blockchain. Anyone will be able to verify the credentials without the need of the issuer and can confirm who the credential belongs to, whether it has been tampered with and the issuer, that is the institution that awarded the qualification.
While it is open source, the importance of professional credentials to a person’s future means that users always remain in control of their own academic history. Users can store their credentials in ‘wallets’, with an iOS version already available and an Android version becoming available soon. Also, when someone shares their certificate with an employer, only the relevant academic history is shared, whereby the content of other certificates will be encrypted.
With Blockcerts’ ambition of becoming the standard for issuing, sharing and verifying digital credentials, Phillip Schmidt Lead Developer said, “we are looking for organizations to deploy the code, to build applications on top of it, and to join our developer community.” Developers can get started here.
Universities, colleges and training providers can now issue digital and verifiable certificates of any type, including credits, certificates, and degrees, to their students to get involved. Employers can start in-house verification services or wait for trusted, third-party verifiers to emerge. While overhauling the credentialing system with Bitcoin’s blockchain is an exciting and useful development, the team behind the project caution that the technology will not fix all of its problems:
“The blockchain is not a simple solution that will fix everything that is wrong with today’s credentials. But it does offer some possibilities for improving the system we have today–and that’s what we are excited to explore.”
With Blockcerts, Spence’s abstract signaling model comes to life, whereby certificate holders can literally provide one ‘signal’ and that is all the employer will need. Employers can then independently verify the individual’s credentials and from which institution it was awarded, without having to communicate with the issuer, streamlining a crucial aspect of the labor market.