How Blockchain Could Transform the Way We Work
By
Blockchain is one of those tricky concepts known by many but
understood by few. Despite this, it has been heralded as a true game
changer with the ability to revolutionise traditional transactions and
processes. Some even compare its potential to that of the internet. But
what does blockchain technology do, and how is it impacting the world of
work?
What is a blockchain?
A blockchain is a
distributed digital ledger where transactions are recorded and stored in
chronological order. When a transaction takes place, a new block is
added. Each new block contains information about the transaction and a
unique hash – much like an encrypted ‘digital fingerprint’ – for both
the new block and the previous block. So, each new block is
cryptographically linked to the previous block, creating a chain of
blocks all the way back to the original ‘genesis’ block.
Instead
of being managed by a central entity, the blockchain is distributed
openly across a peer-to-peer network comprising thousands of ‘nodes.’
When a new block is added to the chain, these nodes collaborate in the
verification process.
This combination of cryptographic techniques
and a decentralised and collaborative approach to verification makes it
virtually impossible for anyone to tamper with the blockchain.
Blockchain
is best known as the technology behind the cryptocurrency Bitcoin.
Unlike standard currencies that are backed by a country’s government,
Bitcoin has no central authority. Blockchain technology ensures that
every transaction made using Bitcoin is recorded and verified
automatically.
Why is this revolutionary?
Blockchain
has been described as the only incorruptible ledger. Traditional records
and accounts can be manipulated, altered, or even lost – there have
been plenty of high-profile accounting scandals over the years. With
blockchain, this is impossible. Once a record is added, it is virtually
impossible for it to be removed or changed, ensuring a new level of
transparency and accountability.
As a result, the transactions
recorded in a blockchain do not need to be authenticated or overseen by a
legal professional or government body.
How is blockchain impacting the world of work?
Cryptocurrencies
are just one of many applications for this technology. Blockchains can
potentially be used not only for financial transactions, but virtually
any process that involves the recording, verifying and tracking of data.
Here are just a few ways blockchain technology is impacting the world of work.
Recruitment
The
facts on a traditional CV are notoriously difficult to verify. Beyond
the references from recent positions, how do we know that the
information there is true? To gain competitive advantage, candidates
often bend the truth or even tell outright lies – according to
HireRight’s 2017 Employment Screening Benchmark Report,
85% of employers caught applicants fibbing on their résumés or
applications. This makes the challenge of recruitment even more
difficult for employers.
What if trust issues could be removed
altogether? Instead of an individual CV, candidates can use a
blockchain-based verification platform, such as APPII,
to create profiles containing information on their identity, education,
qualifications and work experience, which have been verified and
permanently logged. This saves time during the recruitment processes, as
employers don’t need to check a candidate’s credentials – information
in the blockchain only needs to be verified once and cannot be
subsequently altered or removed.
This ensures a new level of truth
and transparency during the recruitment process. Employers also have
quick and easy access to a wealth of employee data, all of which has
been verified as true. From the employee side, this removes the unfair
advantage given to those that cheat the system.
This system does
raise some concerns around privacy and human rights, however. There are
some parts of our career history that we would like to forget – perhaps
we acted unprofessionally in a previous position ten years ago or were
even sacked for misconduct. These facts could be stored forever in a
blockchain, meaning we could forever pay the price for past mistakes.
How would we ever prove that we had changed?
Contracts and agreements
Blockchain technology is also behind the rise of so-called smart contracts, pioneered by blockchain platform Ethereum.
These are essentially computer programs that use sets of rules and
actions to enforce terms and conditions automatically. Rather than being
a written document, these terms are set out in code and stored in a
blockchain.
Unlike traditional contracts, which often need an army
of legal professionals to draught and enforce, smart contracts
essentially automate the performance of contractual obligations. Like
any computer program, they execute tasks exactly according to their
programming; for example, if condition A is met, action B must happen.
Smart
contracts increase transparency between parties, while eliminating the
potential for ambiguity or dispute. They run on software code, meaning
they can perform transactions rapidly, with no need for administration
or manual updating of terms.
The algorithmic nature of smart
contracts makes them ideally suited to governing agreements that have
clearly defined rules and actions, such as those found in the real
estate, insurance, banking and healthcare industries.
Cutting out the middleman
Any
traditional transaction or legal agreement requires an intermediary –
someone qualified, certified, and usually highly paid who ensures that
records are kept, contracts are enforced, and transactions are
completed. This can make such processes time-consuming and costly for
the parties involved, and often acts as a bottleneck to progress.
Traditionally, these middlemen were an essential part of the process –
there were no transactions without banks, no contracts without lawyers,
no accounts without accountants.
Blockchain could revolutionise
these processes by eliminating the need for intermediaries. The
immutable nature of the information stored in blockchains means that
issues around trust, accuracy, authentication and enforcement are
removed. This will transform the way businesses deal with each other,
employees and freelance workers, while reducing the time and cost
dramatically.
This is just the beginning
This is a
technology still in its infancy. For many, blockchain is associated with
Bitcoin and nothing else, and the uncertainty around cryptocurrencies
is perhaps holding us back from using blockchain to its full potential.
Blockchain
technology is notoriously difficult to grasp, and as a result, it is
yet to catch the imagination of the wider population. But this abstract
process with a clumsy name could yet change the world. Like the nascent
internet of the early 1990s, it is impossible to predict the true impact
it could have on our lives and the way we work.
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