It seems to depend on who you listen to if Blockchain, the engine behind Bitcoin, is just another fad soon to be gone or a real, viable technology that will transform business as we know it. Here I share a more in-depth view of blockchain and some summarizations that may change your perspective.
How Does Blockchain Work?
A Blockchain is an encrypted digital ledger of records that are organized into groups of data, called blocks, and distributed over a network. The blocks are located on servers, called nodes, linked together, hence the term “chain.” In effect, Blockchain is a way of decentralizing and sharing information across a network.
Whenever a new transaction occurs, the Blockchain is authenticated across this network before the transaction can be included in the next block on the chain. The agreement of each node is required to add the block into the chain. Only certain entities, such as a specific person or corporation, have a digital ID and can add specific types of information (your college grades and degree, for example). Each node on the network has the same information, and all nodes must agree.
Blockchain is A Technology We Can Trust?
The Blockchain creates trust because a copy of the chain showing every transaction is held by the entire network. If someone tries to cheat the system, they can be identified. The data in a block cannot be changed or deleted, only added to. If anyone were to attempt to make a false entry, the other nodes would not allow it, and the false data would be rejected.
A personal ID from a Blockchain is totally secure and can be used in a variety of ways, from signing legal documents, to verifying employment or experience.
Will Blockchain really revolutionize anything? We already know there are plenty of believers out there that would say yes. Let’s look at HR and the world of recruiting as an example.
Benefits of Blockchain in Recruiting and HR
- Eliminates the need for background checks, reference checks, educational and experience verification, etc.
- Protects employee data from falsification and random change without the approval of everyone in the chain.
- Individuals have control over their own data.
- Blockchain is transparent and immutable, so data cannot be erased, only added to.
- Reduces wasted time and effort that add little to no value.
- Onboarding could be streamlined, especially for high volume, high turnover positions.
Eamonn Maguire – KPMG
Blockchain Is Already Happening
There are groups now exploring ways to verify resumes and other data using Blockchain. In 2016, Recruit Technologies and Ascribe announced an alliance to create a Blockchain system to make resume authentication automated. Ascribe specializes in protecting copyright data. I’d imagine that ATS vendors and others will soon be joining in this revolution.
Blockchain will change the way we live. This is not going away.”
Jamie Dimon – JPMorgan Chase & Co
An Additional Benefit – Smart Contracts
A smart contract is a computer program that directly controls the transfer of digital currencies or assets between parties under certain conditions. A smart contract is very similar to a traditional contract with conditions, penalties and so on. A smart contract could, for example, time stamp a start date and trigger payments, and then end payments on a certain date automatically, according to whatever rules were agreed to. This could simplify and automate what is often a routine and repetitive processes, eliminate the need for lawyers, lower costs, and increase speed.
Blockchain is a bit mysterious and hard to understand, but we are getting more familiar with it every single day. It will soon be used for legal services and for securing everything from a home purchase, to transferring money to your medical records. It will also soon be used in HR and recruiting, where background screening reference checks and verification of resume data will someday be obsolete, serving as an example of how an industry can be totally upended by Blockchain technology.
Ever since at least I've been in this industry, we've always looked for a distributed database with a trust harness that allows multiple organizations to collaborate, and that performs. Clearly, the Blockchain and the distributed ledger that exists underneath it, I think is a very novel implementation, which I believe can have massive implications."
Satya Nadella - Microsoft
The biggest potential for Blockchain and why it is limitless in what types of industries it can touch is all because of disintermediation. The Blockchain can potentially replace all of the intermediaries required to build trust. Think of how many successful businesses on the internet today are intermediaries. Think about Google for a minute – Google managed to become the intermediary between you and the entire Internet. Now think about Amazon – Amazon became the intermediary between sellers and buyers for any type of good.
That’s why a technology that allows the removal of intermediaries can potentially disrupt the entire Internet. Do you see the revolution now?
The Blockchain and cryptocurrencies have elicited an emotional response from financial incumbents. The technology is controversial and misunderstood, but that doesn't make it any less real. I would encourage Jamie Dimon and others to do some homework first. It is not a fraud. It is not a Ponzi scheme. It's a robust technology that is going to impact multiple industries. Don't discount it.”
Bart Stephens, Blockchain Capital VC Investor
Get more insight into blockchain in this recent companion article, What is Blockchain and Does it Matter?
About the Author
Nick Reddin is the Executive Vice President of Sales for Technology Services leader V-Soft Consulting. Nick has over 25 years of experience in the employment services industry and specializes in change management and driving operational efficiencies.
Nick is an expert on the changing world of work and a consultant to many companies in helping them prepare for coming changes. Nick is also a self-proclaimed expert barbecue smoker so be sure to ask him about his latest experiment. Connect with Nick or learn more on LinkedIn.