THE University of Cumbria is believed to be the first public university in the world to accept virtual currency Bitcoin as payment for course fees.
The move coincides with the launch of two courses that look at the role of complementary currencies in economic and social systems, led by the newly-founded Institute for Leadership and Sustainability (IFLAS), and its director Jem Bendell.
Bitcoin is a digital currency that can be used to pay for services both online and, increasingly, in the real world.
It is designed to allow people to send money over the internet in a secure way without the need for a bank account or credit card.
The currency is based on cryptography – complex mathematical equations that have traditionally been used for keeping data secure. Bitcoin uses cryptography not only for creating the currency, but also for keeping track of payments.
Key to the system are ‘Bitcoin miners’. These are individuals, or groups, who use computers to search through blocks of data to solve complex mathematical puzzles. When a puzzle is solved, the individual, or group, that solved it is issued with a single Bitcoin as a reward.
Initially these puzzles were relatively easy to solve, but the system was designed to make them more difficult over time, so more computing power is now needed to find each Bitcoin.
The same computers being used to solve the puzzles to gain Bitcoins are also used to process, and record, transactions, so the whole network essentially runs itself.
Currently there are around 11.5 million Bitcoins in circulation, but the system is design-ed so that the total number of Bitcoins will never exceed 21 million. This means that, unlike traditional currencies, Bitcoin will never suffer from inflation.
“Some students support Bitcoin due to its speed and cost, others due to the new era of financial freedom it could enable,” said Professor Bendell.
“Others are concerned about it, and how it will affect economies and society. Others think that what comes next will be even more important.
“We think it is essential to become better informed, and analyse it from many different perspectives.”
The two courses that will accept the payment include the Postgraduate Certificate in Sustainable Leadership, which will be taught from its Lake District campus, at Ambleside, in June.
Professor Bendell added: “We believe in learning by doing so, to help inform our courses on complementary currencies, we are trialling the acceptance of them. The internal discussions about currency and payment innovation, and the practical impl-ications for different departments, have been insightful.”