Are you ready for blockchain’s impact in employment law?
This seems to be the new equivalent to the buzz a decade ago that social media was going to change the world (it kinda did).
At this point in the post, there are probably two reactions: 1) Tell me more!; and 2) What are you even TALKING about?
So, let’s start with the second question first — what is the “blockchain”? There are many discussions, but one recent ABA article had this to say:
Blockchain is commonly defined as a decentralized digital ledger in which transactions are recorded chronologically and publicly. In its infancy stages, blockchain was the mechanism that tracked cryptocurrencies such as Bitcoin. However, as the technology evolved, variations such as private, permissioned, and consortium blockchains have emerged. Ultimately, blockchain technology can facilitate many types of business transactions.
By design, blockchains are inherently resistant to modification of the data—once recorded, the data in a block cannot be altered retroactively without obviously corrupting later blocks, which depend on the original data from the earlier block as part of the hash. It can take enormous time and energy to go back and rehash subsequent blocks to try to hide the earlier alteration, and in the meantime new blocks are being added to the chain. This makes a blockchain extremely resistant to modification.
The applications of the blockchain are still in the infancy phase. (The hype cycle for blockchain is in the “peak of inflated expectations” period and it projects that we are still 5-10 years off from maturity.) And thus, any discussion regarding its implications in the employment law arena are necessarily speculative.
But let the speculation begin.
- It may make the concept of a “self-sovereign identity” for employees a reality, making verification of past employment or certifications easier and more secure. (Or this breathless article about “Blockchain-based CVs Could Change Employment Forever.“)
- Potentially, you could run payroll off the blockchain to make those transactions more secure.
- It could also be used to help employers keep confidential health information and transmit it more easily.
It only takes some imagination to go beyond that as well.
- “Smart” employment law contracts, in which transactions automatically happen, could be introduced into the workplace.
- Or the blockchain could be used to secure IP rights to company products, thereby avoiding the confusion as to whether the employee or the employer “owns” such rights.
Blockchain is still very much developing and I wouldn’t be surprised if this article seemed a bit dated a few years from now. After all, who would’ve thought you could order a car (Uber) inside a social messaging app (Facebook) just a decade ago?
But employers and their attorneys who stay up on technology should understand the potential implications for blockchain in the workplace and be ready to adapt once the technology becomes mature enough to use. From my perspective, there’s still time to keep reading about this developing technology; the time for action is still yet to come.