Blockchain. Blockchain. Blockchain.
Over the past decade you have probably heard the word Blockchain on quite a few different occasions. The concept of Blockchain was first outlined in 1991 by computer scientists Stuart Haber and W. Scott Stornetta, in an attempt to implement a system where documented time stamps could be set to an unchangeable state. At the time, the world’s collective computing power was unable to take the concept to fruition, however nearly 30 years later, we are beginning to see blockchain technology rise to prominence in the tech world.
The Blockchain and Smart Contracts
The concept is fairly easy to wrap your head around. Teams of developers work to create what are known as “blockchains” which are an ever-growing list of records and data that are cryptographically stored into digital blocks, which are then processed on the blockchain and made to be unalterable, or immutable. Each block contains a timestamp of when a transaction occurs, a cryptographic hash of the block that came before it, and the transaction data. Through a concept known as tokenization, developer’s are able to create a form of digital asset called cryptocurrency, which is then used by people on the network for buy-and-sell transactions.
Blockchains are operated through the paradigm of distributed computing, where users on the network are able to operate their own peer-to-peer servers for cryptocurrency mining in an attempt to “mine” for the token being used in a transaction. Mining for cryptocurrency is essentially putting your computer’s hardware to work in an attempt to solve a difficult-by-design math problem that rewards those who support the network through their server hosting with cryptocurrency for validating transactions.
Some cryptocurrencies, such as Aeon or Monero, are easily mineable with just your computer’s hardware, or a CPU. On the other hand, cryptocurrency juggernauts like Bitcoin are very hard to mine for, and often require large amounts of expensive and energy-intensive GPU hardware stacked together in mining warehouses to yield any significant value.
But of course, cryptocurrency is just one important part of the equation that makes up a blockchain ecosystem. When it comes to the recruiting industry, “smart contracts” on the blockchain will most likely play the largest part at first.
A smart contract is essentially a trustless contract between two parties that can not be altered or erased upon verification of the transaction linked to the contract. Larger coins such as Ethereum utilize smart contract technology at the very core of its blockchain to allow users to transact with each other. Upon completion of the smart contract, the transaction is made and a permanent record of it is stored on a block with other transactions that have occured recently. Once the block is mined, the transaction data is recorded onto a public ledger as proof of purchase or receipt. Once the transaction is verified, it will stay there for as long as the blockchain continues to remain functional.
Blockchain meets the Staffing industry
It is the concept of smart contracts that brings us to where we are today in regards to recruiting and its benefits in conjunction with blockchain. In a perfect world we would all be able to operate in a trustless way just like a blockchain does. If I tell you something that is true, then you should be able to accept it as true. However, if I tell you something that is false but try to pass it off as true; How are you supposed to know if I am really telling you the truth or not?
The problem I have just illustrated is one of the fundamental flaws of our current system of compliance and governance. How often have you interacted with a candidate or new hire who ends up lying about something on their resume or lying about their academic credentials all in the hopes of getting hired for a job they are not qualified for? Fortunately, most great candidates would never do this, but it is still a reality that ends up frustrating many recruiters, account managers and client companies.
The good news is that through blockchain and smart contract technology, it could become a reality where lying about your academic credentials or past work history will easily be figured out due to the permanent record of blockchain and smart contract transactions and publically viewable ledgers.
With educational verification, blockchain is already starting to make an impact in this regard. For instance, when students at MIT graduate, they not only receive a physical paper copy of their degree, but also an untamperable digital copy (through an application known as MIT Blockcerts Wallet) that they can more easily share with employers. And with the permanent nature of blockchain transactions, those who might try to embellish their credentials on a resume or application will no longer be able to get away with it.
Of course, the benefits of blockchain to the recruiting world go further than just education verification. Blockchain will also help recruiter’s with personal identification, security of candidate’s personal information, creation of employment agreements, onboarding, offer acceptance, providing building access for new hires and the issuance of paychecks. Overtime as the technology comes to fruition and continues to grow, we will most likely see blockchain being used more and more in newer and unique ways.
The Reality of Cryptocurrency
Currently most people know about cryptocurrency such as Bitcoin and Ethereum; Which are both juggernauts in their own respective rights. Bitcoin acting as the main reserve currency for cryptocurrency and Ethereum essentially being one of the first major platforms for creation of decentralized applications (dApps) and tokenization.
As of now, the technology pertaining to staffing and recruitment is still in its infancy amongst the blockchain industry and cryptocurrency market. It is a fascinating topic of discussion amongst the technology community today, and with each boom and bust cycle that the cryptocurrency market goes through, appears to wax and wane in its levels of interest. Right now with the market being low, it might be tempting to think that blockchain or cryptocurrency is a “hoax” or “pyramid scheme.” Because it is an unregulated market and fairly new way of performing transactions, the astronomical rise and falls of cryptocurrency value can be alarming to some.
When the cryptocurrency market goes through a bear cycle, many news outlets start releasing articles with headlines such as, “Is this the end for Bitcoin?” or “Is cryptocurrency finally going to die?” We can assure you that Bitcoin (currently around $3,600 USD after reaching a high of about $20,000 USD in late 2017) and Ethereum are growing and becoming more efficient every day with every new update. Though cryptocurrency may seem unstable to some, the underlying fundamentals of blockchain will be utilized for decades to come for the improvement of our society and business world.