Article published in RH Magazine. A reflection by Rafael Farrim, People and Talent Manager at KCS IT.

We've all heard about cryptocurrencies in one way or another - from TV segments to news headlines about their volatility, among other things. We can conclude that there's clearly a general public interest in this technology, not only because it's a novelty of the present, but also because we don't know its future impact.

More interesting than the crypto-asset factor itself and its volatility, a very important part of this whole ecosystem is blockchain. Explained in very layman's terms, this consists of a set of technologies that serve as a record of transactions carried out, which becomes practically impossible to alter. Essentially, blockchain works like a database that's available to anyone, where more data can be added, but what's already recorded is practically impossible to change.

The first real use of blockchain came with bitcoin, a digital currency meant to be a store of value. However, new ones have emerged with much more interesting use cases, ethereum being one example. It's a decentralized applications platform that incorporates smart contracts. It earned the title of the 2nd generation of this technology.

Smart contracts work like a cause-and-effect system placed on the blockchain and impossible to alter. So, I could enter into a digital contract with a set of conditions with a colleague, where, if the contract's conditions are met, the agreed payment in the contract is made automatically.

There are already countless case studies for this set of technologies, from the most obvious, financial transactions, to regulating measurement systems (Source), patent/intellectual property registration (NFTs), secure electronic voting (Source), certification of the origin of goods/orders (Source), among others.

Speaking more specifically about HR management, I believe the evolution of blockchain will, in the long term, impact several areas:

• Contracts – all employment contracts, or at least part of them, will start being entered onto the blockchain due to the impossibility of altering them and their financial transaction component;

• Payroll – automation of the payment process and instant transfers through digital contracts;

• GDPR – through blockchain, we could have a secure Digital Identity where we can limit who we grant access to that data;

• References/background checks – based on blockchain's security factor, it will be possible to issue data that we normally put on our CVs, where you can verify who awarded that certification, somewhat like the basic principle behind NFTs (e.g. universities, instead of issuing a paper diploma, start issuing a secure digital certificate on the blockchain that cannot be tampered with, giving recruiters solid proof of the reliability of that information).

Some of these factors could also become a major driving force for the freelance market.

Despite all of this being long-term forecasts, start-ups and even large companies are already beginning to adopt these technologies, which, although still at a very early stage, already show great disruptive potential across various sectors, and it's important for companies to start preparing for some of these changes.