In 2014, Kings College in New York became the first university in the U.S. to accept Bitcoin for tuition payments, a move that seemed more of a PR stunt than the start of some new movement. Much has changed since then, including the value of Bitcoin itself, which skyrocketed to more than $19,000 earlier this month, catapulting cryptocurrencies into the mainstream.

A handful of other universities (and even preschools) now accept Bitcoin for tuition, but that’s hardly the extent of how blockchains and tokens are weaving their way into education: Educators and edtech entrepreneurs are now testing out everything from issuing degrees on blockchains to paying people in cryptocurrency for their teaching.

On the one hand, some cryptocurrencies sound like something from a comic book with names like CryptoKitties. But the underlying blockchain technology is complex, and attracting droves of interest from the likes of IBM and Massachusetts Institute of Technology.

Take LiveEdu, for example, a Y Combinator-backed online learning company that touts itself as being the “next-gen Lynda.com,” referring to a platform that offers online courses and skills training. LiveEdu intends to offer user-created, project-based learning videos, and is currently undergoing an presale initial coin offering (ICO), where it aims to sell 8 million “EDU” tokens.

The company claims on its website that it’s near that goal, with more than 7.2 million sold so far, amounting to more than $475,000 raised from 572 investors. (According to the company’s white paper, EDU tokens will initially cost about $1 USD per 12 EDU tokens.)

If LiveEdu reaches its fundraising target, founder and CEO Michael Garbade says users on the platform will get paid in EDU tokens for live-streaming or uploading project-based how-to videos on topics such as building a website or developing a cryptocurrency. Other users can view the platform’s premium content by paying those same tokens.

Investors might be less interested in buying and trading tokens for a streaming service that they can access for regular cash. (Not to mention platforms like YouTube have no shortage of free how-to videos). Google gave a similar live lesson service a shot—minus the cryptocurrency—where viewers and experts could connect via Google Hangout to learn skills such as photography, cooking or education. That service shut down in 2015, and according to the Verge, the company said it had not “grown at the pace we had expected.”

That’s why LiveEdu and other ICO startups are banking on another selling point for users: the ability to exchange their EDU tokens for other cryptocurrencies.

EDU tokens are so far only listed on EtherDelta, an exchange platform with a history of reported hacks—one as recent as Wednesday. The company claims it is applying to get on other token exchange sites including Bittrex and Poloniex.

Of course, there’s no guarantee that EDU coin will have any value in any digital market.

“Bitcoin and other cryptocurrencies are reaching record highs, and a lot of people are looking to cash in on this,” says Doug Levin, founder and president of EdTech Strategies. “The issue though is that Bitcoin dwarfs others in value and volume,” he adds. “Everything else is like trading penny stocks.”

Tokenized Learning

According to data tracked by Coinbase, ICOs have raised nearly $3.4 billion in 2017 alone so far, roughly 13 times more than the amount raised in 2016. It’s become attractive for startups looking for an alternative to traditional venture-capital investment, and functions similar to a crowdfund in that anyone with internet access can participate as an investor.

The issue though is that Bitcoin dwarfs others in value and volume... Everything else is like trading penny stocks.

Doug Levin

For all of the hype around ICOs, there’s still plenty of skepticism—and examples of fraud. On December 11, SEC Chairman Jay Clayton released a public statement on cryptocurrency and ICO markets, warning that “there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.”

Outside of the SEC warning, blockchain—not to mention its application in education—is not without its skeptics.

In November, the Guardian wrote an editorial underlying the central conflict in the emerging technology:

The blockchain technology underlying the various cryptocurrencies is meant to make human decisions redundant and to replace faith in governments with indisputable rationality. The delusion that this might be possible has produced one of the most astonishing outbursts of irrational exuberance in financial history. When this bubble bursts, it will be clear that so long as there is greed we will need laws to tame it.

That’s not stopping LiveEdu from targeting learners. In fact, Garbade, the company’s founder, explains that his live-streaming platform didn’t originally have plans for raising money using a cryptocurrency offering. It also didn’t focus on education. But he decided to give both a shot after the company’s first business models proved unsuccessful. (Previously, LiveEdu offered a streaming platform to watch people code—not quite as exciting as watching gamers play or other popular streaming content. The idea didn’t exactly catch on.)

Education and profitability have long had a murky relationship, and incentivizing learning based on tokens exchangeable for real financial value will undoubtedly stir up ethical concerns and questions. But even those who understand the risks see how the model may stand a chance.

“It’s not crazy to think that users—families, students or educators—could get tokens for participation in doing something with a company if those [tokens] could get exchanged for value or something that another company offers, or maybe cash, but probably at a lower exchange rate,” says Levin.

The idea is almost reminiscent of Disney Dollars, a corporate scrip decorated with images of Mickey Mouse and friends that could be purchased with US dollars and used only at Disney establishments. (The entertainment giant has stopped issuing the bills but still accepts those in circulation).

Phil Long, chief innovation officer at the University of Texas Austin’s Project 2021 innovation initiative, thinks that the platform may be attractive to some if anyone can be a producer or consumer. “In this environment, anyone can create and share their videos. I’m not just [making videos] because it’s cool, but I’m getting cryptocurrency.”

If you want to ensure some value is shared and both parties share it properly, you could just draft up a code. You don’t need to put that on the blockchain.

Aparna Krishnan

LiveEdu points to colleges, schools and libraries as some of its target participants. Exactly how that will work is still yet to be decided, and actual students have mixed opinions on the idea.

Unfamiliarity with cryptocurrency “keeps out those who are new to the space,” says Nadir Akhtar, a sophomore at UC Berkeley and a leader of Blockchain at Berkeley, a student-led organization. Still, he thinks it’s better than traditional paywalled systems in academia and research if users can earn tokens by participating.

Aparna Krishnan, another leader of Blockchain at Berkeley, questions the need for the tokenized system. “If you want to ensure some value is shared and both parties share it properly, you could just draft up a code. You don’t need to put that on the blockchain.”

They both see why edtech entrepreneurs are embracing the world of cryptocurrency: the profit incentive. “The ICO route is still in a grey legal area, and you can make a lot of money,” says Akhtar.

Building on Blockchain

Exchanging tokens isn’t the only way in which educators and researchers are using blockchain technology and cryptocurrencies for education. Perhaps the most-hyped application revolves around using blockchains to prove what students have learned.

Sony and IBM, for example, say they have developed a system for storing education records using blockchain technology, which relies on people called “miners” to solve cryptography problems in order to add transactions (in this case, digital transcripts) to the ledger. The idea is to offer schools a method of verifying and storing documents such as diplomas or test scores without the risk of hacking or degree fraud.

Sony says it is working towards a 2018 rollout. Other companies and institutions are already taking the same idea and offering it today. MIT in October announced that the university is partnering with Learning Machine to offer digital diplomas using the Bitcoin blockchain.

To do that, Learning Machine must pay mining transaction fees (paid in Bitcoin) to create the student records. By uploading in batches, Chris Jagers, CEO of Learning Machine, says his team can add around 1,000 diplomas for about $10 (though the cost would fluctuate with the value of Bitcoin).

As Bitcoin’s popularity booms, Jagers says his company will be thinking about ways to keep the model sustainable. He adds that degrees issued on the public ledger will always be accessible, even if an institution or the company were to go away.

Other universities also exploring blockchain include the University of Texas at Austin, where researchers are piloting a private blockchain to issue materials such as credentials and badges.

Using a private blockchain, Long, the university’s CIO, explains that the UT Austin project does not rely on outside miners. Instead, selected individuals involved with the research are the only ones who can “verify” what’s added to their blockchain.

“I don't want to have to pay the cost of putting records into the blockchain,” says Long. “We can artificially make the price of that.”

In 2016, Levin wrote that most education institutions looking into blockchain would likely take a similar approach, at least until they are comfortable with the technology. “While private blockchains require custom development and a commitment to navigating the security requirements,” he says, “they can be built specifically to suit their primary use cases.”

Still, he is not yet convinced that there is a real need from students to store credentials using blockchain technology. “I’m not sure individuals are dying to control their own education records or have a copy of everyone else's records on their machine.”

Though there’s no shortage of uncertainties and skepticism, the idea of issuing degrees on blockchains seems to only be picking up steam among universities—and blockchain companies. BCDiploma is running a token sale on its platform, which sets out to issue credentials on blockchains. The token, called BCDT, would be used “to pay certified data issuance like diplomas, professional certifications, certificates of insurance or proprietary certificate through BCD smart contracts,” the company’s website reads.

At a session about blockchain at the EDUCAUSE national conference in October, Long said there is also interest in the academic community in using blockchain technology to verify peer-reviewed research.

That’s still very much in the idea phase, but at least one startup has already run an ICO that builds on the interest. Matryx offers a marketplace and bounty system for researchers to buy, sell and mix digital assessment and research. On the platform, challenges are posted along with a reward or “bounty” for its solution, issued in the company’s token, MTX. The company claims its business will focus on problems in STEM and academia.

There’s little precedent for any of these experiments. For what it's worth, Disney Dollars, though discontinued, can be purchased on eBay today for between $1 each to $14,300 for a mint-condition sheet.

And in an era where trust in higher education-institutions is on the decline, moving proof of learning and scholarship to a decentralized platform, a global permanent record, could wind up a key innovation. Or it could be looked back on as a novelty, as foolish as putting a cartoon mouse on money.