Originally published at www.edsurge.com on May 12, 2016.

When you hear the word blockchain does it make your head spin? Wall Street analysts and fintech experts claim it could make traditional banking obsolete; Airbnb just acquired a team of blockchain experts; and the country of Estonia will use it to secure a million patient health records.

But what exactly is blockchain, and what are its implications for higher education?

Originally created as the underlying database for bitcoin (the peer-to-peer digital asset and payment system), blockchain’s technology is now being seen as valuable and purposeful beyond the financial sector. The advantages blockchain provides to store information on a secure, permanent, historical ledger that can be both public and private will change how edtech applications approach student data.

In higher ed this means that student data could be shared across many institutions — rather than a single one — and also include data from online learning tools, co-curricular activities, employment history and other learning experiences. This would allow the data to be exchanged, understood and validated amongst many parties. Imagine the pictures of students’ learning experiences that this could provide and how these pictures could help develop and improve upon course design, facilitate transferring credits, or prove qualifications for a job to a potential employer.

A Brief Blockchain History

To understand how blockchain works, let’s take a step back and consider some history. Take MySQL, for instance, which is considered to be one of the world’s most widely used relational databases. When it was created over 20 years ago, it made it possible for more developers to have affordable, easy to use, open-source databases. MySQL is hosted and controlled by the applications that use it. This puts the onus of access to the data and security precautions solely on the application provider.

Blockchain takes a different approach by distributing data equally amongst its participants. A public blockchain like the one bitcoin uses is distributed amongst thousands of participants (also called miners). To give you an idea of how many participants there can be, take a look at Bitnode which as of this writing is showing 7,071 miners participating in Bitcoin. Not all blockchains will have this many participants, but nonetheless this distribution provides a higher level of permanence than one application hosting its own database.

Blockchain is literally a chain of blocks. Often this chain is referred to as a ledger. Each block can contain hundreds of transactions (the data) waiting to be added to the blockchain. The blocks are in numerical order and only one block can be added at a time, with each block referencing the previous one. Each block is a link on the chain and is mathematically reliant on the one to which it is connected. There isn’t a central authority overseeing transactions. Instead, validity is determined by how the chain is generated providing assurance that blocks can’t be tampered with or duplicated. Even though the blocks are described as transactions, the data is not always financial. It can be content of any kind, including files.

The miners play a critical role in the creation of blocks and distributed nature of blockchain. To create the blocks each miner must host a copy of the entire ledger. Miners are incentivized to do this by being paid a reward and potentially collecting a fee for each transaction they process. They listen for incoming data, process it and attempt to fit as many transactions as they can into a block. Typically transactions with larger fees get processed first. Once a block is validated and published to the chain, the chain is redistributed so that all miners get the same update. Then it begins again.

Implications for Higher-Ed

It’s important to note that not all blockchains will use bitcoins, mining or apply the same rules to mining as bitcoin does. Blockchains could be managed by a consortium where members make the decisions about how blocks are processed. Also, blockchains can be private where one organization controls everything. A university may be interested in hosting a private blockchain or perhaps a group of universities. An ecosystem like Open Badges, which generates digital representations of learning and skills, may consider a consortium blockchain.

Blockchain is clearly more than just hype. Last fall, MIT Media Lab announced that it is developing software to issue digital certificates on the Bitcoin Blockchain. Holberton School has started delivering its academic credentials in a partnership with Bitproof, a blockchain-based notary system that proves ownership of content. In the Open Badges community, the BadgeChain team has started exploring how badges can be advanced by blockchain. Sony Global Education developed blockchain technology that enables secure sharing of academic records.

It’s also worth checking out Learning Is Earning, originally presented by Jane McGonigal at SXSW 2016. Learning Is Earning introduces a concept of “Edublocks,” which represent units of hours of learning which are written to a blockchain and can be used to “pay” for additional learning opportunities. Many shake their head at the concept of learning being measured in hours but nonetheless, the site and video do a nice job of illustrating how a blockchain in an educational context could operate.

We are still very much in the early days of blockchain in both development and adoption, and there are some challenges: Bitcoin costs are variable and still too difficult to buy, transactions are taking longer, and it’s reliant on users to store the public and private keys used to track transactions safely and permanently. Even with these challenges and likely many more, you can bet that it’s here to stay with adaptations, experiments and innovations on the way at a faster pace. It’s likely that your students soon will be or already are buying things with bitcoin and that the applications they use outside of your institutions, including the ones that your students create, will embrace the blockchain first.

Kerri Lemoie (@kayaelle) is the CEO/CTO of OpenWorks Group, LLC in Providence, RI.

Originally published at www.edsurge.com on May 12, 2016.