The potential of applying blockchain technology to support management activities at universities in Vietnam

741 THE POTENTIAL OF APPLYING BLOCKCHAIN TECHNOLOGY TO SUPPORT MANAGEMENT ACTIVITIES AT UNIVERSITIES IN VIETNAM Dr. Doan Quang Minh [email protected] School of Information Technology and Digital Economics, National Economics University, Hanoi, Vietnam Abstract Blockchain technology has been applied widely in many countries in different fields such as banking, finance, insurance, health, production, retailing... However, the application of this technology in education seems to be still limited, especially in Vietnam. This paper will introduce an overview of blockchain technology as well as propose some recommendations on the potential of applying this technology to support management activities at universities in Vietnam. Finally, the advantages and disadvantages of deploying blockchain technology at universities in Vietnam will also be mentioned. Keywords: Blockchain technology, management activities, universities in Vietnam. 1. Introduction Blockchain technology was first introduced in 1991 by Stuart and Stornetta (Stuart and Stornetta, 1991). The purpose of this technology is to prevent illegal data editing as well as to share data for all parties involved. Unfortunately, right after being introduced, blockchain technology almost falls into oblivion, in other words, almost nobody or organizations apply this technology until there is a person or a group of people who use the nickname Satoshi Nakamoto applied blockchain technology to introduce the concept of Bitcoin, a cryptocurrency created in January 2009 (Angela and Liana, 2014). So, what is a blockchain? In fact, a blockchain is a distributed database of records or public ledger of all transactions or digital events that have been executed and shared among participating parties. Each transaction in the public ledger is verified by consensus of a majority of the participants in the system. Once entered, information can never be erased. The blockchain contains a certain and verifiable record of every single transaction ever made (Crosby et al., 2016). Here it is needed to discuss a little about the ledger. The ledger is the principal book or computer file for recording and totalling economic transactions measured in terms of a monetary unit of account by account type, with debits and credits in separate columns and a 742 beginning monetary balance and ending monetary balance for each account. It means that all daily economic transactions will be recorded in the ledger. Similar to the ledger, blockchain also can record all daily economic transactions. But, the limitations of the ledger are: Firstly, not all stakeholders can own the ledger; secondly, the content reflected the same transaction in the ledgers of all parties is not always identical because the content can be modified and the other parties cannot monitor it. In short, the same transaction but the data recorded in the ledgers of the stakeholders may be different, that is the problem. Blockchain technology has overcome these limitations since all stakeholders have right to own an identical blockchain, and the illegal modification of data is almost impossible because the blockchain records are maintained by a decentralised network, where all records are approved by consensus. Thus, it can be seen that the benefit of blockchain technology is that in addition to acting as a public ledger to record all economic transactions arising in order of time, this technology is also bringing the transparency of data as well as preventing the illegal data manipulation. 2. Working of Blockchain Technology Figure 1. Blockchain technology (Source: Author's illustration) The Figure 1 shows a simple way of blockchain technology. It is a series of blocks that are closely linked. Each block will contain three components. The first is the data, the second is the data of the block that has been encrypted using the hash function, and the last is the encrypted data of the previous block (Figure 2). Figure 2. The components of each block (Source: Author's illustration) 743 The type of data contained in each block depends on the blockchain technology applied in each field. For example, for Bitcoin blockchain, the data in each block is detailed transactions related to the buying and selling of cryptocurrency. It could be data about buyers, sellers, cryptocurrency being traded as well as the amount of digital currency newly dug. Figure 3 simply describes the data contained in a block of Bitcoin blockchain. Figure 3. The data contained in a block of the Bitcoin blockchain (Source: Author's illustration) Each block also contains data encrypted by the hash function. The data after being encoded will convert into the string of characters as described in the Figure 4. It is possible to visualize the data after being encoded as a fingerprint. This shows the uniqueness of the data contained in each block, in other words the data contained in each block of the blockchain is absolutely different. If the data of a block is edited, the result of the hash function will also be changed. So it can be seen that using hash functions is very effective in checking whether the data of a block is edited or not. Figure 4. Data of a block after being encrypted (Source: Author's illustration) 744 The third component in each block is the encrypted data of the previous block. This is an important factor to create a chain of links as well as to ensure the sustainability of each Blockchain. Figure 5 illustrates the coherence of the first three blocks of a block chain. Figure 5. The connection between blocks through encrypted data (Source: Author's illustration) As mentioned above, each block contains its data, the encrypted data of the previous block, and the data of the block that has been encrypted. Therefore, the third block can point to the second block. Similarly, the second block can point to the first block. However, the first block cannot point to a previous block. Hence, this block is also called the root of the blockchain. Supposing someone deliberately edited the data of second block, this activity will result in the hash function of this block being changed accordingly. Because of that, the third blocks will become invalid block since it does not contain the encrypted data of the previous block. Thus, changing the data of a block will result in all subsequent blocks becoming invalid. This mechanism will help detect whether the data has been changed illegally. However, if only using this protection mechanism, it is not completely guaranteed that the data cannot be illegally edited because today the computer processing speed is very high, super computers can calculate hundreds of thousands of hash functions in a second. Therefore, hackers can completely edit the data of a block and recalculate the hash function for all subsequent blocks quickly to ensure that the entire blockchain is still valid. Consequently, to prevent data editing illegally, blockchain technology has been added a protection mechanism called proof - of - work. This mechanism allows slowing down the process of creating a new block. In the case of Bitcoin, after every 10 minutes, a new block will be created and connected to the chain (Figure 6). 745 Figure 6. The expected block time in the Bitcoin blockchain (Source: Author's illustration) With this protection mechanism, changing the data of a Bitcoin block is extremely difficult because if someone wants to modify the data of a block, he or she must recreate all subsequent blocks. The difficulty is that, these blocks cannot be recreated immediately since only after every 10 minutes a new block is formed. Moreover, he or she has to calculate how to the proof - of - work of each block must match exactly 10 minutes, and this is almost impossible. So to prevent the illegal data modification, blockchain technology has used a combination of the two protection mechanisms: Firstly, using the result of hash function to link between two adjacent blocks so that the latter block can monitor the data integrity of the previous block; secondly, use the proof - of - work mechanism to slow down and increase the level of difficulty for the process of creating a new block. However, combining these two protection mechanisms is still not all that blockchain technology uses to inhibit data modification illegally. To ensure data cannot be arbitrarily edited, blockchain technology also uses an additional protection mechanism to make data more transparency and publicizing. It is instead of just having a blockchain management entity, blockchain technology has used peer-to-peer networks to connect all members, and each member is owned with a version of blockchain with identical content (Figure 7). It is understood that, blockchain technology works based on the consensus of all the stakeholders. All the members will agree on which block is valid and which block is invalid. If the data of a block is illegally changed, that block will be automatically rejected by the system. So far we have understood the mechanisms against blockchain's illegal data editing, which are: 746 Figure 7. The mechanism of data transparency of blockchain technology (Source: Author's illustration) 1) Use the encryption result of the hash function to link between two adjacent blocks so that the following block can monitor the data integrity of the previous block. 2) Use proof - of - work mechanism to slow down and increase the level of difficulty for the process of creating a new block. 3) Publicize and transparent blockchain's data for all parties involved. Each member of the system owns an identical blockchain, any change of data needs to get consensus from all the stakeholders. With the simultaneous combination of all above three protection mechanisms, it is almost impossible for someone to change the blockchain data illegally. Because of the above outstanding features, blockchain has become one of the most interested technologies today. 3. The Potential of Applying Blockchain Technology to Support Management Activities at Universities in Vietnam In recently, blockchain technology has been mentioned frequently in official media in Vietnam. The potential of applying this technology is very promising, especially in areas, such as banking, finance, manufacturing, supply chain management, public services, health, education... In the field of education, particularly in higher education, blockchain technology should be experimentally applied to support the following management activities: Supporting the activities related to entrance examination: The entrance exam of universities plays a very important role. It can be said that this is one of the prerequisite factors directly affecting the quality of training as well as the brand name 747 of each school. Therefore, ensuring quality of freshmen is one of the concerns of university managers. Currently, the enrolment of schools is mainly based on the results of the National High School Examination. However, in addition to the advantages that have been recognized by society, the reliability and fairness of this exam is still a question mark when still existing the fact that the test scores of the contestants can be illegally manipulated. To overcome this unexpected situation, blockchain technology should be deployed at scoring process to confirm the reliability of the National High School Exam. Based on the operation mechanism of blockchain technology, all stages of the scoring process of the National High School Exam will be public, shared and supervised by all stakeholders. Therefore, the ability of illegal data editing is almost impossible. This will bring the fairness to all candidates as well as the confidence in the quality of entrance admissions for universities. Supporting the student data management: It is very convenient if all student data, including diplomas, certificates, transcripts,... are managed based on blockchain technology. This brings openness and transparency to all stakeholders including students, faculty as well as other departments of the training institution. Moreover, due to the data protection mechanism of blockchain technology, the illegal editing of student data is almost impossible. Finally, this management approach will bring more convenience to students when applying for their jobs. Specially, students do not need to submit notarized copies of diplomas, certificates, and transcripts to employers but simply just providing links, pubic key, then employers can access to the university database to see all student data. This will also contribute to reducing problems using fake diplomas and certificates which are considered quite popular today. Supporting the activities related to reward and punishment on student performance: Reward and punishment play an important role to motivate the students towards learning. These activities contribute to educate students to promote the self- discipline in learning as well as strictly comply with the regulations in the school. Therefore, it would be better if the reward and punishment system work to ensure accuracy, fairness, publicity, democracy, not sensible prejudice, and timely. However, in fact, reward and punishment activities in most schools currently do not meet the above criteria. The reason is that almost rewarding and punishing processes of schools are done manually. To solve this problem, blockchain technology should be applied. Specifically, from the first days of enrolment, between schools and students need to deploy a smart contract based on blockchain technology applied to 748 the entire learning process. This contract includes all the terms that has been programmed and fully automated. At any time, schools and students can monitor the work performed as well as the progress of the contract, ensuring everything is clear and transparent. Moreover, in order to implement the rewarding and punishing activities well, students will be provided an electronic wallet functioning like a bank account. Whenever students achieve high scores in doing scientific researches or other activities launched by schools, a number of corresponding reward points will be automatically transferred to the students’ electronic wallet. Conversely, if students violate the university regulations, immediately a certain number of points will be deducted from the existing point fund in the students’ e-wallet. At the end of the school year, based on the total number of points in the e-wallet, students may know whether they will be granted scholarships, tuition exemptions, or get a temporary suspension decision. In short, if applying blockchain technology to support student rewarding and punishing activities in the form of implementing the smart contracts, the accuracy, fairness, publicity, and timeliness will be ensuring and then contributing to improving the effectiveness of student management in particular as well as the quality of university performance in general. Supporting the evaluation of faculty performance: Comprehensive and accurate assessment of faculty performance is one of the important factors to encourage the striving of teachers, contributing to improving the quality of teaching and learning in higher education institutions (Nguyen Thi Tuyet, 2008). However, in reality, the evaluation of faculty performance at universities in Vietnam is still more subjective and sometimes inaccurate (Nguyen Duc Chinh and Nguyen Phuong Nga, 2006). Therefore, in order to have more information channels to improve the accuracy when evaluating faculty performance, it is advisable to sign a smart contract between schools and the lecturers. Specifically, before the start of the new school year, between the faculty and the schools need to sign a smart contract including terms describing in detail all expected teaching and scientific research activities. As soon as the new school year begins, all the lecturers' activities will be recognized, digitized and recorded based on blockchain technology. At any time, schools can monitor and supervise the work that teachers have been doing. Along with that, schools and lecturers can also adjust and supplement some terms of the contract if necessary. Whenever a job is done successfully, a number of corresponding reward points will be automatically transferred to the teacher's e-wallet. On the contrary, every time lecturers violate the contract, a certain amount of points will be deducted 749 immediately at their personal e-wallet. At the end of the school year, based on the total points in the e-wallet of each lecturer as well as their entire operation process recorded and stored in the blockchain, schools can assess the level of completion of the lecturer's work objectively, fairly and more accurately. 4. Discussion and Conclusion In the context of many countries are focusing on building and developing the digital economy, applying blockchain technology seems to be an inevitable trend since this technology converges outstanding features such as preventing illegal data editing, publicizing data based on the consensus of all stakeholders, and eliminating unnecessary intermediaries through the implementation of smart contracts. Besides, Vietnam is considered to have high quality human resources in information technology. Therefore, the potential of applying blockchain technology in Vietnam is very promising. Moreover, this technology currently is also very interested in Vietnam. Evidence is that, in recently, the term blockchain technology is mentioned more often in the official media. Along with that , many seminars on blockchain technology were also organized, gathering a large number of participants from the government members, heads of ministries, as well as the leaders of start-up companies. With the above favourable factors, the investment in research and application of blockchain technology will promise to open a breakthrough in the quality of teaching, learning, and management of higher education institutions in Vietnam. In the initial stages, blockchain technology should be experimentally applied to support the management activities, such as the activities related to entrance examination; student data management; reward and punishment on student performance; and the assessment of faculty performance. However, in order for these proposals to be realized, it is needed to have a clear and specific legal framework for the development of blockchain technology in Vietnam. 5. References 1. Angela, R. and Liana, B. (2014). The issue of competing currencies. Case study – Bitcoin. Journal of Theoretical and Applied Economics, Vol. 21, No. 1, pp. 103-114. 2. Crosby, M., Nachiappan, Pattanayak, P., Verma, S., and Kalyanaraman, V. (2016). Blockchain Technology: Beyond Bitcoin. Applied Innovation Review, No. 2, pp. 6-19. 750 3. Nguyen Duc Chinh and Nguyen Phuong Nga (2006). Research on developing criteria for evaluating teaching activities and scientific research of lecturers at Hanoi National University. Scientific research report, Hanoi National University. 4. Nguyen Thi Tuyet (2008). Criteria for evaluation of lecturers. VNU Journal of Social Sciences and Humanities, No. 24, pp. 131-135. 5. Stuart, H. and Stornetta, W. S. (1991). How to time-stamp a digital document. Journal of Cryptology, Vol. 3, No. 2, pp. 99-111.