Is Blockchain Important To The Future Workplace?


Because I explore the future of work in my writing, it is worthwhile to consider the technological environment in which we are going to operate in the future. One of the biggest trends that has taken shape over the past several years is blockchain. It is not yet mainstream, but technology is rapidly developing. Its far-reaching applications have the potential to upend a wide range of established companies and industries. Some say that blockchain will revolutionize the world economy.

Let's start with a brief overview of what is blockchain. Blockchain is a database or a ledger that stores and shares information. It resides on a network of computers, and its transactions are cryptographically protected. Blockchain transactions are continuously authenticated (verified, cleared, and stored) in digital blocks by the network of computers. Each block is connected to the preceding block; thus, creating a chain. No information gets recorded on blockchain until multiple parties agree on a "single source of collective truth."

Every transaction is time-stamped, preventing anyone from altering the ledger. Because blockchain is decentralized, it has no single point of failure. Each computer on the network has a copy of the database and verifies each other's accuracy. A distributed database and mass collaboration create a sense of trust in the information without the need to personally know the parties involved.

The peer to peer blockchain technology does not require intermediaries to authenticate or settle transactions. This means that companies like Uber, Airbnb, and title agencies may no longer be necessary. Intermediary transaction costs, such as banking fees, can also be eliminated. The Future Today Institute, an advisory firm to executive leadership teams, contends that blockchain technology offers opportunities to protect data, safeguard privacy, and build trust in the supply chains.

Blockchain can have a profound effect on how organizations are funded and managed, how they create value, and how they perform basic functions, such as HR, marketing, and accounting. In some cases, technology might eliminate many management functions.

Large corporations, including Bank of America, Mastercard, and IBM, have been heavily involved in this transformation, and they collectively own more than 100 blockchain-related patents. Many industries are building new applications and business use cases for blockchain technology.

Aside from cryptocurrencies, smart contracts have been receiving the most attention so far. Ethereum, which was founded by Vitalik Buterin, a Russian-Canadian programmer, is an open-source blockchain platform for smart contracts. The terms of the contract are written in computer code and stored on Ethereum, making blockchain the "trusted authority" and eliminating the need for external enforcement. Entrepreneurs are using smart contracts as building blocks to develop a variety of decentralized applications that could disrupt established businesses.

The authors of Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World believe that, in most cases, networks based on blockchain can be better suited for creating products and services. Given my finance and accounting background, I was especially intrigued by the following projection.

"On blockchain, executives will someday no longer need to attest that their books are in order once a year or every quarter; the blockchain will keep a company's books in order in what is, in effect, real time as a matter of course. Financial statements will go from snapshots of the enterprise at one point in time to a transparent, three-dimensional view of the whole enterprise."

Since the industrial revolution, business leaders have been shaping the practice of modern management and building corporations mainly based on hierarchical and insular structures. Blockchain is fundamentally shifting that paradigm, which will certainly affect the way work is performed by individuals and the leadership skills that will be required to steer the organizations in the future.

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