Blockchain in the Digital Workplace

Blockchain for the digital workplace poses transformative power to businesses, allowing organizations to achieve improvements in both productivity and capability – ultimately redefining how business is done.

Blockchain will impact the digital workplace in four primary ways:

• Eliminating the need for Intermediaries: Blockchain technology eliminates the need for intermediary third parties. With the use of blockchain, parties can trust that information added to the blockchain cannot be changed. Large corporations can interact directly with each other and write their own contracts. It will thereby increase the efficiency and speed at which business is done.

• Simplifying Operations: Blockchain technology allows participants to reach consensus or settle transactions quickly. It can simplify records management, record business processes and reduce the costs and time related to reconciliation and disputes.

• Enabling new business models: Blockchain technology fundamentally ensures ownership, transparency, security and consequently the value of the records and process they govern. By enabling participants who may not know or trust one another to conduct transactions, blockchain technology fundamentally provides a paradigm shift as it reframes the concept of trust.

• Increasing security: Blockchain can ensure the integrity of data and subsequently overcome some of the risks associated with having confidential data stored and controlled in centralized systems. Having no single point of failure — or single point of control, blockchain technology provides resilience to both malicious data corruption and software/hardware failures.

There is a great deal of work going on to extend applications to utilize the value of blockchain. From smart contracts, digital autonomous agents, decentralized finance, digital identity, supply chain management and distributed autonomous enterprises – the applications are near limitless. As the technology itself continues to evolve and grow, it is expected that blockchain will become an invisible fabric to support digital enterprises.

However, when considering the application of blockchain in the workplace, it is important to first understand that blockchain is not a technology layered on top of existing infrastructures to adjust or tweak the way business is done. In fact, in most scenarios where we can dream up high-level use cases where there is a need for record-keeping or automation - it is often unnecessary and can easily become a glorified database or excel spreadsheet.

In order to assess whether a blockchain might be a better technology candidate than a traditional relational database for a given enterprise use case, it is necessary to perform a cost-benefit analysis and risk assessment of all areas in which it belongs; and subsequently to infer whether the technological peculiarities of a blockchain might give the edge over a relational database. When evaluating the risks of the technology, consider the following:

• Cyber risk: Blockchain is still vulnerable to endpoint data vulnerabilities as hackers can intercept data during transmission. It is important to quantify not only the risk associated with blockchain technology but also with its ecosystem.

• Compliance risk: There is still conflating or an absence of clear regional regulatory standards for blockchain. This can lead to significant risks of financial losses and legal penalties if an organization fails to be compliant with varying regulatory frameworks.

• Counterparty risk: To facilitate transactions, third-party vendors may be enlisted. The trust is then enlisted in their own applications and websites which may not be as secure. This requires quantification of how much a given business model is reliant on distrusted third parties and therefore the potential financial benefits of disintermediation. This is the most elusive aspect, as there is a lack of standard quantification models to evaluate a distrust index.

As with any disruptive technology, it is critical to gauge a clear use case and evaluate the risks before adoption. Nevertheless, any organization that is seeking to instill transparency, consensus, collaboration, and adaptability into its operations will find utilizing applications on the blockchain increasingly valuable.