When blockchain technology is mentioned, the majority automatically thinks of payment options and stock-like media of exchange. However, there are unimaginable advancements a potential spread of acceptance could bring to all fields of business. The recruitment industry is no exception.

In a previous article, we already discussed the risks and opportunities leaders should consider before paying their employees in cryptocurrency, now we will discuss why you should keep an eye on the origin of the phenomenon as well. According to Don & Alex Tapscott, authors of Blockchain Revolution, blockchain is “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” This can either sound like a dream or a nightmare: blockchain technology is able to keep track of every digital record, file, data, and transaction in a secure and decentralized manner. But what does that mean for businesses? And where does a futuristic image of recruitment come in? Let’s dive in!

Blockchain is different from average data storage methods

The traditional way of storing data is by using cloud storage. It has a great demand, is commonly used by both businesses and individuals, and kind of as a consequence is quite prone to misuse. All the information uploaded is centralized, meaning it’s ultimately vulnerable to the providers of the bespoke platform or server. Data is usually not encrypted during transfers, which makes it an easier target for hackers and scammers.

Our data is the most critical unit in the current world, it can be used as currency, a matter of bargain and base of knowledge. Its importance makes it the object of innovation, as storing, processing, and analyzing data is becoming more and more simple, with technological firms constantly working on making the process even more efficient and safe.

A blockchain, at its core, is simply a chain of records. Blockchain is special and distinct from other recordkeeping systems because it relies on a distributed ledger, meaning the chain of records is subsequently stored across a large network of independent computers. This decentralizes and encrypts the data, making it safe and secure.

Blockchain as a replacement for databases

According to Lukas Marx, storing data on the blockchain is not as simple as it sounds. There are many problems that can make this task quite difficult, and despite all the trendiness, it only really has significant benefits if transparency is your ultimate goal. Blockchains are meant to be fast, streamlined, and lightweight. They’re not ideal for storing large amounts of data, but the data that is once stored (in theory) can not be edited, manipulated or deleted by anyone, as it can’t be owned by anyone (due to its decentralized nature). Where the blockchain excels in immutability, it lacks in efficiency.

Many blockchains can’t exist without oracle networks that connect them to underlying database storage, so it’s not beneficial to think of them as complete replacements. These differences can make blockchain a good fit when you need a system of record wrapped in total security, validity, and traceability. But for storage of larger files and more associated metadata, underlying databases will still be critical. Still, businesses can see countless benefits. To take us as an example, traceability and validity together can identify and verify a person’s identity, faster than any recruiter could dig up the same information in a database or network.

How would it change the recruitment industry?

According to predictions, by 2025 the global blockchain market will grow by $39.17 billion U.S. dollars. It certainly is gaining momentum and popularity amongst average people as well, not just billionaire business owners and tech-geniuses. As it registers more and more transactions, side data of the buyer and seller personals are stacking up, and being stored. To show how it could be important on both sides of the employer relationship, blockchain can enable individuals to maintain, secure, and offer controlled access to comprehensive blockchain-driven digital IDs that include critical information about them to employers.

To put this more into a more digestible point, this simply means that one is able to trace back where you worked, how you performed and why you switched, all based on valid, uploaded records. Through this digital ID, individuals would be able to turn their credentials into real value in the employment market while employers are able to identify the right employees more accurately and effectively through data-driven insights. It’s not hard to see how blockchain technology could save HR and recruitment pros a ton of valuable time: faster referrals and background checks, no more falsified CVs, contracting new talent in split seconds… but these are all just speculations and interesting possibilities of the future.

In the age of blockchain, recruiters will be challenged to implement new tools into their practices, and we can’t wait to see what the future holds!