A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchain is inherently resistant to modification of the data.
Last year was a bad year for cryptocurrency. Scams ratcheted up and prices plummeted, which created a shortsighted sense of doom around the technology associated with it. Bitcoin has since recovered and stabilized this year.
Blockchain, which is the underlying ledger for which cryptocurrency was built on, has become its own disruptive force that is poised to shakeup how the world does business. And corporations are paying attention, exploring the use cases today and tomorrow for the emerging technology.
From a human resources perspective, blockchain can be utilized in a variety of ways. The technology is believed to provide for accurate and tamper-proof data, which could be used for background checks and other hiring practices.
“One use case is in the case of hiring and checking out references. Due to the immutability of blockchain, it's possible to immortalize and timestamp a person's qualifications,” said Gordon Koo, CCP, WorldatWork member and senior compensation analyst in the media industry. “So a university or an issuing organization, can issue a person's graduation or certification and it cannot be forged and [will] be easily verified against the issuing bodies' PGP (Pretty Good Privacy) key.”
In a Workspan magazine feature from 2018, Koo said the technology could greatly affect how payroll is done, especially in countries where the government currency is extremely volatile or where access to the financial banking system is unable to provide services effectively.
“By using a cryptocurrency like Bitcoin or ether, it’s possible to pay the employee wages much more quickly, at a lower cost and without a financial intermediary,” Koo said. “It could be difficult to set compensation when a country is currently undergoing hyperinflation, or if there are restrictions within the financial sector.”
Although the term is already part of the day-to-day vernacular, blockchain is still very much a future concept. Koo said he hasn’t seen the technology being leveraged in the HR profession at all, saying that most companies are still “getting a feel for it.”
“For usage within HR, I don't see that this is coming anytime soon at least within the next five years,” Koo said. “The technology is just starting to be adopted by the tech giants and accounting giants of the industry.”
But make no mistake, the blockchain disruption is coming, and could have a profound effect on the way HR operates.
“Those responsible for employee data should get up to speed on [blockchain] very quickly,” said Jeff Mike, vice president and HR research leader at Bersin, Deloitte LLP. “They need to start planning ahead as to how blockchain is going to change work, the business implications of it, and how that will affect the role of HR as stewards of data.”
Blockchain in Retail
Nikki Baird details the current landscape of how blockchain is being utilized in the retail industry in this piece for Forbes. Baird writes about how different online retailers, such as Amazon and Facebook are in the process of developing their own cryptocurrencies and how that will affect the retail climate. She also explores the different use cases for blockchain in the sector.
Daniel Palmer from Coindesk writes that Visa has gone live with its blockchain-powered business-to-business payments service. Palmer explains that the service has been designed to help Visa’s corporate clients sidestep the slow correspondent banking network, opening up near instant international payments using blockchain’s technology.
Investing in Blockchain
Major players are investing in blockchain technology to provide more incentive for users, writes Sarah Austin of Entrepreneur. Austin’s story asserts that blockchain technology is allowing companies to increase user loyalty and customer awards. And because it allows for transparent interaction between platforms, it is increasing usefulness for rewards programs.
A Foundational Technology
Blockchain will eventually become a foundational technology across industries that will lead to new business models, writes Lucas Mearian of Computerworld. Mearian provides layers of information gleaned from Dale Chrystie, a FedEx executive and blockchain strategist. Chrystie is bullish on the technology’s future and predicts widespread business usage in the future.
Pivot Raises Doubt Over Blockchain Future
A grand plan to apply blockchain technology to the world of securities and trade settlement appears to be stalling, writes Izabella Kaminska and Phillip Stafford of Financial Times. Kaminska and Stafford report that Digital Asset Holdings had previously promised to revolutionize finance by utilizing blockchain technology, but the company is instead ramping up its focus on smart contracts, which uses code similar to that used in automated transactions.
About the Author
Brett Christie is a staff writer at WorldatWork.