Education credentials, frauds, and the blockchain

Education credentials, frauds, and the blockchain

Education credentials form some of the most important basis of our modern society. Ranging from bachelor degrees to advanced PhDs, they, in part, also make up a person's identity. Despite this, the way of issuing and verifying such credentials has not changed for centuries. It is mostly a paper-based process that is highly prone to forgeries and fraud. In this in-depth use case study we explore what credentials are, where they derive their value from and how technology can improve this archaic process.


1 | The value of a degree
2 | Higher market demand = more illegal activities
3 | New technology approach
4 | Credentials on the blockchain
1 | The value of a degree

1 | The value of a degree

According to recent estimates, graduates in the UK can earn GBP 500,000 more than non-graduates and are more likely to work in high-skilled posts. In the U.S., bachelor degree holders earn more than their peers with no bachelor’s degree regardless of the US state.

On the other hand, students of four-year college feel that a university education wasn’t worth the cost as student loans are getting into record heights at 1 trillion USD.

The economy of knowledge demands more educated people

After the last recession, which wiped out many jobs held by workers with a high school education or less, post-secondary education became increasingly important. In 2018, more than 40.7% of the EU-28 population aged 30–34 years possessed a tertiary level of education, reaching Europe’s 2020 strategy’s target two years ahead.

The U.S., as well, faces an urgent and growing need for talent, with the aim to reach the goal of 60% of Americans holding an educational credential beyond high school by 2025. Miles-long lines of people will, therefore, have to earn college degrees, workforce certificates, industry certifications, and other high-quality credentials.

More credentials than ever

The recent analysis of U.S. Education and Training by Credential Engine has identified over 738,000 unique education credentials in the US alone.

The number includes both traditional degrees (high school diplomas, postsecondary degrees, and certificates) and certificates, as well as non-traditional educational offerings.

2 | Higher market demand = more illegal activities

Due to increasing demand, there is a constant threat of students taking shortcuts in a flourishing market of forged degrees and credentials. It’s not a particular stretch to find bogus universities and degree mills that operate purely to make money, copycat websites, as well as sites and individuals that issue and print fake degrees and educational credentials. Faking an online credential is even easier and one can easily copy and paste a digital badge on their portfolio.

Faking a degree is not just a disservice to students and their hard-working peers. The business risks associated with a data breach in education can have a significant financial, reputational, and operational impact on the ability of an institution to carry out its mission.

How to recognize a fake degree or educational certificate

There are several ways to check the validity of an academic credential, the most common red flags are 1) Old-school fonts or gothic script; 2) Latin terminology, incorrect spelling, word order or grammar; 3) Fake security measures (crests, seals and holograms); 4) PO Box or mailing house as university location; 5) Website domain suffix; 7) Failed university authentication on an online authentication database; 8) Fake accreditation bodies; 9) Inconsistent information and non-functioning links, etc.

Only universities accredited by Departments of Education and internationally recognized bodies are institutions that can award academic degrees. Several high education networks, such as ENIC-NARIC, HEDD, UKRLP, GDN, IAU, provide lists of academic institutions that are accredited issuers of credentials.

But today, as many as one in four Americans hold a non-degree certificate, and almost half of all the credentials in the US being provided by non-academic organizations. With an unprecedented array of online educational certificates in the form of digital representations such as badges, separating the wheat from the chaff becomes even harder.

How often do baseless educational claims reach the job market?

Nearly half of companies perform background checks on candidates’ education, and a quarter of them verify their professional license/qualification, much more often than checking their previous employment.

There are a number of ways employers can check up on educational claims. The most obvious is contacting a school or university and asking them to verify a degree, but this is time-consuming and does not guarantee results. Online tools such as BeenVerified, Instant CheckMate, TruthFinder, Intelius, and Hedd in the UK provide a faster, although not necessarily as thorough search through public records that include data on educational background.

Fraudulent degrees and educational certificates claims take advantage of this verification gap and quite often make their way to HR managers’ desks, as nearly a third of North American companies uncovered discrepancies with job candidates in the area of educational credentials.

An efficient, reliable and straightforward educational background check is essential for recognizing the top talents and filtering out the dishonest ones. While online checks, phone calls, data registries and electronic chain-of-custody (eCoC) have been adding their part in a usual credential check in HR, they do not represent an unhackable mechanism that would permanently safeguard the validity of educational proofs.

3 | New technology approach

Clearly, the current way of checking the validity of educational credentials comes with flaws. These could manifest in all sorts of ways detrimental to universities, education providers, peer students, but also businesses that hire deceitful students, their employees, and customers.

Challenges in the credential landscape today are:

  • Growing size and complexity in the marketplace
  • Increasingly inefficient, confusing and expensive check
  • Varying credential descriptors are confusing for all

The most significant employment screening challenges are reducing time-to-hire, improving overall efficiency in the screening process, verifying the information, high costs of thorough checks, and lack of manpower to conduct/support global screening.

As centralized businesses and approaches are becoming aware of the leaks and cracks in the present system, decentralized solutions along with the blockchain tech keep popping up in strategic conversations more and more frequently.

What is blockchain?

Blockchain, or a chain of data blocks, is a specific data-recording structure that operates in a decentralized way. Each block contains a data record and a hash of the previous block, and new data can only be inscribed on a new block appended to the chain. This means all the blocks before it are hashed and cannot accept any alterations, edits, or changes without these being detected.

What are the main benefits of blockchain?

  1. Decentralized/distributed database: The decentralized network of participants allows every one of them to access the entire database and transaction history. No third-party or centralized party permission is needed to verify all the entries.
  2. Peer-to-peer interaction: Every transaction can be done with only two nodes participating, without the need for an intermediary/middle man that would provide trust between the two.
  3. Irreversibility of data records: Executed and recorded transactions cannot be retroactively altered, thanks to the progressive block-appending structure of the blockchain.
  4. Transparency combined with pseudonymity: While all transactions are visible to all participants in the network, users can cover their identity and sensitive data linked to their addresses.
  5. Computational logic: To prevent man-made errors, transactions can be designed to follow algorithms and execute automatically.

Blockchain in education

The blockchain provides a powerful structure that prevents and mitigates educational credential fraud and helps minimize the costs of HR screening candidates’ qualifications.

Educational credentials issued and managed on the blockchain can help students permanently protect their study achievements, assist apprentices to authenticate their apprenticeship qualifications and support their employers in running educational background checks quickly, efficiently, and reliably. Even in extreme cases, e.g. for economic migrants and refugees, a blockchain-based educational credential would be accessible and verifiable regardless of location, as it would be stored permanently on a decentralized network of computer nodes.

Examples of projects applying the blockchain technology to education have become increasingly present. Sony and Fujitsu have created an encrypted blockchain-based database for educational documents, while the Maltese government became the first in the world to require all educational certifications in the country to be stored on a blockchain.

One of the Big Four audit and consultancy firms, PriceWaterhouseCoopers (PWC) has worked on a new blockchain platform to verify employee credentials that are issued, stored, and shared as digital certificates in their digital wallets. Last but not least, the open-source academic credential clearinghouse Credentify built by 0xcert in collaboration with a consortium of educational institutes and the Erasmus+ project provides a platform for micro-credentialing and credential verification on the blockchain.

The blockchain provides much more than that

The blockchain tech in itself provides immense opportunities for businesses and their safe data transmission. But when combined with other advanced mechanisms, it serves as a go-to tech package to redefine the existing business and operation practices.

  • ERC-721 non-fungible tokens: Tokens that represent unique data records on the (Ethereum) blockchain are called non-fungible since they cannot be replaced by no other token. As such, they serve as a 100% unique imprint of any unique asset, be it digital or tangible. They are perfect for storing data about unique documents such as certificates.

  • Xcert: Xcert is an enhanced, certified and contextualized ERC-721-based non-fungible token with extra functionalities, namely interoperability and asset imprint.

  • Asset ledger: A ledger works like a folder containing the assets of a specific issuer and related owners. Depending on its configuration, only authorized accounts are allowed to handle the ledger, create and manage its assets.

  • Atomic operations: This type of operations allows for only two possible outcomes, a) successful completion of a transaction or b) error in the process and return to the initial point. Atomic - or indivisible - operations prevent unauthorized access and interruption of asset creation which reduces the possibility of tampering, hacks, and frauds.

  • Orders in bundles: Instead of issuing and managing one blockchain-based asset (certificate) at a time, orders in bundles allow for the management of several files simultaneously. While the accomplished outcome is the same for all assets, the certification process is done in a much shorter time and at a lower cost.

  • 0xcert Framework: The open-source Framework for building decentralized applications (dapps) encompasses all the above mechanisms to provide a go-to source for decentralized management of unique assets. It's built to support dapp creation on either Ethereum or Wanchain blockchain.

  • 0xcert API: The API is the first fully decentralised API. It is built on top of the open-source infrastructure and wraps 0xcert functionalities in a common API interface.

4 | Credentials on the blockchain

For unique assets such as credentials that by definition hold valuable data, blockchain-based management proves to be the most appropriate choice. The technology provides mechanisms to increase data control, reliability, and general access to public data.

But despite the benefits it brings, the implementation of a technology that is as niche, as advanced, and as complex as blockchain, does not come easy. This leaves educational institutions, both academic as well as online providers — especially the ones that lack solid in-house IT brains — without a clear plan for the next steps.

To encourage the adoption of the blockchain tech, the path reaching it should be cut short, yet still focused on the destination and benefits for the education providers. The blockchain tech should be implemented in everyday teaching and credentialing operations and processes seamlessly, without the need for hiring new manpower or spending tons on the development budget.

0xcert API is the key when it comes to adoption. The API is a fully decentralised web service built on top of the existing 0xcert open-source infrastructure, which wraps 0xcert functionalities in a common API interface.

Credentials as unique tokens on the blockchain

Each credential is a one-of-a-kind document that normally contains:

  • a unique credential number
  • name of the student/recipient of a credential
  • name of a specific course/major for which the credential is granted
  • name and stamp of the university or the educator issuing the credential
  • place and date of issue.

With the 0xcert API, educational credentials can be issued as unique blockchain-based tokens. What makes them non-fungible is their unique content (metadata) and hash that is sealed as a data block on the blockchain. To increase the value and features of such unique tokens, 0xcert provides tokenization of credentials in the form of Xcerts, which are enhanced ERC-721 non-fungible tokens.

Such non-fungible tokens stand the test of time, as they are ever-verifiable, tamper-proof, immutable and interoperable imprints of unique data.

The blockchain tech that supports unique imprints of tokenized credentials, allows for clear traceability and clear provenance verification of assets.

What’s more, blockchain-based credentialing goes beyond the stamps and signatures of paper-based credentials. It provides a clear unbiased verification of existence, authenticity, and ownership of digital assets at any time and any place.

The chain dependency from new blocks to older blocks makes it impossible to alter (or tamper) issued credentials without detection. However, the issuer or education provider is still able to make updates if needed in the form of a new data block.

Also, due to the decentralized nature, the 0xcert API does not have the authority to decide on the legitimacy of a certificate. Rather, it simply provides a record of the issued assets and their issuers. A user or holder of the certified asset can check a certificate and match the identity of the issuer with the accredited provider.

The provenance of doubtful or suspicious documents can be easily traced back and matched with the issuer and checked for their status and references within the industry.

The common ground across sectors for new business models

By combining all the relevant blockchain-based features, the Evidenspace platform serves as a uniform reference point for all actors in the education industry.

Educators, students, businesses and organizations from all sectors, as well as students, their employers, and customers can validate their credentials at a single, yet decentrally accessible spot.

0xcert allows all partakers to easily find and trade blockchain-based credentials enhanced with stronger data protection and higher value for the business. It works for both traditional degrees (high school diplomas, postsecondary degrees, and certificates) and certificates, as well as non-traditional testimonials, such as badges and registered apprenticeships, certifications, licenses, and alternative degree programs, as well as MOOCs, online courses, etc.

Apart from reducing the time and cost related to credentials issuing and validation, blockchain-based credentials are able to enhance reputation, create new revenue streams and open up education opportunities that go beyond the established practices.