Before we can understand what blockchain technology can do, we need to understand what a blockchain is. Let's take a real-world analogue.
In the mid-1990s, our hometown built a new stadium for its minor league baseball team. To raise money, they sold paving bricks for $50 each to the community. You could buy as many as you wanted, and each stone would be custom-engraved with black enamel and weatherproofed to last.
My wife and I bought one when we got married in 1995, and all these years later, it's still there — an unchanged, immutable record from 22 years ago, readily available for anyone who walks by to see and agree that my bride and I were a small part of Triple-A baseball history.
Since then, we've bought bricks for each of our kids, as have thousands of other people, creating an always-intact but ever-updating masonry mosaic.
Now imagine dozens of exact replicas of that baseball stadium around the country, engraved bricks and all. If a new brick is added or an old one removed at any of those stadiums, the same action occurs at all of them simultaneously.
That's basically how a blockchain works.
Blockchain = Verifiable + searchable + accessible information
In the simplest terms, a blockchain is technology that stores encoded data across a network of computers. This far-flung distribution eliminates the need for a single gatekeeper or intermediary, ensuring equal access to that information by all authorized users. This form of data dispersal makes it difficult to tamper with or corrupt the records, because everyone would be able to see exactly where and when the information had been changed. This distributed immutability creates a record that anyone can see and agree to — just like those baseball stadium bricks.
This might not seem like a big deal — but truly, it is.
Consider, for example, the cost and time created by the intermediaries — lawyers, loan officers, government personnel — required to verify all the documents needed to purchase a house, from a deed search, tax lien review and home inspection to zoning maps, credit reports and mortgage agreements.
It's not hard to see the value of a secure, immutable database distributed across multiple parties with communal consent to the integrity of the information.
Blockchain technology promises to deliver that value, as it enhances the single most important aspect of any human interaction: trust.
Trust, but verify
Without trust, business transactions can't occur. And without transactions and engagement, long-term business relationships can't survive. According to one expert in the field, the bonds of business trust are eroding, leaving the trust gap to widen.
"Over the past 200 years we have reduced the cost of transactions while increasing their speed and reach via the Internet; however, we have not increased the level of trust surrounding transactions. In fact the level of trust has continued to deteriorate," said Richie Etwaru, instructor of the first college-level course on blockchain technology at Syracuse University and author of the new book "Blockchain: Trust Companies."
"Collectively we have invested in technology, innovation and commerce to try and reduce uncertainty while simultaneously striving to bolster trust," writes Etwaru.
Before the arrival of blockchain, he argues, those goals were impossible.
Etwaru believes that the next major resource businesses will battle over will be trust. Like all resources, there's only a finite amount of trust to go around. "When dealing with price, product or innovation a first mover has an advantage but an effective fast follower can quickly close that advantage gap," he writes. "Yet, when the competitive attribute is trust, there can be NO fast follower. There is only one entity or company within a category that is trusted within the human mind — we're wired so that two companies can't share that same space in the brain."
Why blockchain matters to communicators
Corporate communications and investor relations (IR) professionals readily understand the importance of trust among various stakeholders. If a reporter doesn't trust your response to a product recall or a financial analyst doesn't trust your CFO's earnings guidance for the year, business will suffer.
Even though the technology is still relatively early in its development, there are already a few key areas where communicators can envision using it in the near future.
- Content creation, thought leadership and copyright: As content marketing is increasingly disseminated across divergent channels, issues of content ownership and copyright are bound to increase in our hyperlitigious business environment. Blockchain technology holds the promise of creating an indisputable chain of creation and ownership, providing an unerring notarization function from concept to completion, regardless of digital format.
- Financial disclosures and shareholder voting: Providing digital content on organizational websites is critical for IR and corporate communications functions. The day is coming, however, when blockchain-based functions on a corporate IR website will serve as a unique competitive advantage. Analysts and institutional investors alike will be more apt to align with organizations that are publicly transparent and upfront about areas such as a proprietary cost structure or executive compensation based on an unadulterated blockchain. Those blockchains may even accommodate online shareholder voting, eliminating the cost of producing and distributing paper ballots for instantaneous, remotely cast virtual votes.
- Messaging curation and archival functions: Many corporate websites currently archive press releases and multimedia assets — but imagine an accessible and searchable record of every publicly spoken word by your C-suite executives. Or an immutable, permission-based repository of every peer-reviewed publication of any employee that ever worked for your company. Such information depots could serve multiple organizational uses, including regulatory, financial and commercial.
Whether or not your organization directly adopts these blockchain applications, your communications and IR groups need, at the least, to understand these fundamental concepts in order to explain their organizations' embracing or eschewal of this revolutionary technology. Because it's coming, and we can either choose to be leaders or laggards, experiencing the consequences of that choice.
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