Cumbria University PhD student is first in world to pay for tuition fees using Bitcoin

Leander Bindewald, 34, paid for one month's fees using virtual currency

PhD student said he hoped to promote use of different types of payments



University of Cumbria is the first institution in the world to accept Bitcoin

Bitcoin works without the need for a central bank and is sent over internet

Coins are transferred directly from person to person, without a third party



Making history: Leander Bindewald, 34, has become the first university student in the world to pay for his tuition fees using the virtual currency Bitcoin

A Cumbria University PhD student has become the first in the world to pay for his tuition fees using the virtual currency Bitcoin.



Leander Bindewald, 34, from Stockwell, south London, covered one month's fees at the university in Carlisle with 1.032 bitcoins - the equivalent of £260 in sterling.



Bitcoin is an entirely virtual currency that works without the need for a central bank.



Coins are transferred directly from person to person via the internet - without a third party getting involved - and are kept in a digital wallet, which is accessible via a computer or mobile device.



Mr Bindewald, who specialises in community currencies, said he had decided to pay his tuition fees via Bitcoin in a bid to promote the use of different types of payments.

'I am practising what I preach,' said the PhD student.

'This is a public example that the technology actually works and that Bitcoin may very well be the payment system in the future.'

Mr Bindewald's transaction was made during last week's Ouishare Conference in Paris, a three-day event which attracted more than 1,000 entrepreneurs, social innovators and business leaders.

It follows an announcement by the University of Cumbria in January that it was accepting Bitcoin payments for two of its courses.

In doing so, it became the first public university in the world to accept the currency - representing what the institution deemed a momentous moment in the history of currency innovation.

Mr Bindewald, who is originally from Germany and carries out research at the New Economic Foundation in London, said he had used crowdfunding to enable him to pay his tuition fees.

University: Mr Bindewald, from Stockwell, south London, covered one month's fees at the University of Cumbria (above) in Carlisle with 1.032 bitcoins. In doing so, he hoped to promote the use of different types of payments

The method sees a person or an organisation proposes an idea on an internet platform, before a ‘crowd’ of backers agrees to help fund it.

In February, Mr Bindewald had taken to his blog to ask people for donations in the hope of countering negative attitudes towards the use of bitcoins.



He said: 'The perk for people who donated was to be part of a positive Bitcoin example . A lot of bitcoins get confiscated and people think that only drug dealers use them.

WHAT IS BITCOIN?

Bitcoin is an entirely virtual currency that works without the need for a central bank.

Launched in 2009, it enables coins to be transferred directly from person to person via the internet, without a third party getting involved. The virtual coins are kept in a digital wallet that is accessible via a computer or mobile device. They can be earned by users offering up their computer power for payment processing work, which creates new bitcoins and is known as ‘mining’. Thousands of traders worldwide now accept the currency, with leading Bitcoin payment processor BitPay working with more than 20,000 businesses this year.

However, because bitcoins allow people to trade money without a third party, they have become popular with not only libertarians and technophiles, but also criminals. One bitcoin equals around £260.



'But that’s not the case - and besides, more drugs and guns are sold every day with cash.'

Mr Bindewald, who holds masters degrees in Neurobiology and Philosophy and Business from the University of Freiburg in Germany, said that he saw Bitcoin as a preferable method for foreign students to safely pay their fees in the future

'It’s the natural way to make transactions in a virtually connected world,' he said.

But he added that despite his expertise in the currency, he does not regularly trade in it himself.



Professor Jem Bendell, director of the Institute for Leadership and Sustainability at the university, described Mr Bindewald's payment as 'an important statement that crypto-currencies can be part of a broader shift in economic thinking’.

Speaking at the conference last week, he said: 'We need to harness currency innovation for the common good. That’s the starting point for our research.'

Bitcoin was created in 2009 as a peer-to-peer payment system in which funds are transferred directly from one person to another.

The virtual coins can be earned by users offering up their computer power for payment processing work, which creates new bitcoins and is known as ‘mining’.

Thousands of traders worldwide now accept the currency, although it has also been scrutinised amid concerns it could be used for illegal activity.



Virtual: Bitcoin is an entirely virtual currency that works without the need for a central bank. Coins are sent directly from person to person, without a third party getting involved. Above, a model of a Bitcoin in Germany

Because bitcoins allow people to trade money without a third party getting involved, they have become popular not only with libertarians, technophiles, and speculators, but also criminals.

Complementary currencies like Bitcoin work alongside, rather than instead of, traditional currencies .

Formed in 2007, the University of Cumbria is one of Britain's newest universities, with campuses in Lancaster, London and Penrith.

Former students include Blue Peter presenter Helen Skelton and Turner Prize-winning artist Keith Tyson.





