How Blockchain Will Change Organizations

How Blockchain Will Change Organizations

1. technology commonly known as blockchain, will have profound effects on the nature of companies: how they are funded and managed, how they create value, and how they perform basic functions such as marketing, accounting, and incentivizing people

2. A blockchain has several advantages. First, it is distributed: It runs on computers provided by volunteers around the world, so there is no central database to hack. Second, it is public: Anyone can view it at any time because it resides on the network. And third, it is encrypted: It uses heavy-duty encryption to maintain security

3. Blockchain transactions are continuously verified, cleared, and stored by the network in digital blocks that are connected to preceding blocks, thereby creating a chain

4. Blockchain will transform how businesses are organized and managed. It allows companies to eliminate transaction costs and use resources on the outside as easily as resources on the inside

   • Human Resources and Procurement: Blockchain will enable organizations requiring specialized talent and capabilities to obtain better information about potential contractors and partners than many traditional recruitment and procurement methods offer
   • Finance and Accountig: Information about a business’s financial well-being changes all the time. When you search the web for a company’s financial data, you search in two dimensions: horizontal (across the web) and vertical (within particular websites) On a blockchain there’s a third dimension: sequence
   • Sales and Marketing Just as a blockchain provides a way to obtain information about potential contractors and partners, it will be able to tell you about people or businesses who are potential customers
   • Legal Affairs Coase and subsequent economic theorists have argued that corporations are vehicles for creating long-term contracts when short-term contracts require too much effort to negotiate and enforce. Blockchains facilitate contracting in both the short and long term
   • Raising Capital We believe blockchains will also transform the process of raising money, the blockchain has the potential to disrupt the way the global financial system works and change the nature of investment

5. Integrating the Pieces: Blockchain technology provides a platform for people to work together with the persistence and stability of an organization but without the hierarchy

   • Financial statements will go from snapshots of the enterprise at one point in time to a transparent, three-dimensional view of the whole enterprise