What’s this blockchain thing?

This will not be a technical explanation of the blockchain. There are many people better qualified than to do that. Like, way better qualified. Set aside an afternoon and Google it. I will also not be encouraging you to get involved in cryptocurrencies. Mind you, I’m not discouraging you, either–this post simply isn’t about that. Instead, I’ll look at the practical reasons a platform co-op might at least take a look at using the blockchain.

I do, however, need to give a brief explanation of what I’m talking about. Many of you have possibly never even heard of the blockchain, and even if you have, you may only vaguely understand it. I’ll try to make it a bit less vague. In short, the blockchain is… wait for it… a chain of blocks. OK, there’s a bit more to it. Each “block” is a bundle of transactions between peers that’s broadcast across the net for anyone to record–yet each transaction is anonymous. All we know is that it definitely happened, and when. That’s it. Now, here’s the clever bit. Each block is given a “hash,” which is a cryptographic “fingerprint,” in the form of a long series of letters and numbers. That hash cannot be reversed engineered to learn anything about the transactions. If anyone tries to falsify a record in the block, the hash will become very different, so it’s obvious to see. Hundreds, even thousands of nodes across the Internet are cross-checking the chain every ten minutes, so any irregularities are picked up on immediately. Even more cleverly, the hash from each block in the chain becomes part of the computation of the hash for the following block, so the most recent block in the chain verifies the integrity of all preceding blocks.

Most of the time, we hear about the blockchain in the context of cryptocurrencies such as Bitcoin. But that’s not the only kind of transaction the blockchain can handle. Any exchange of information is a transaction. The hash securely and anonymously verifies the existence of the exchange. So, what could platform co-ops do with this?

First, a platform co-op is made up of people who rarely have contact, and in some cases, never. We want to assume the best about our colleagues, but even so, it can be good to have a paper trail of our transactions. Or, more literally, a distributed and indelible ledger.

Second, building rules into transactions in the form of “smart contracts” can automate a lot of a platform co-op’s workflow. The technology to do this is still taking shape, but it offers a lot of potential. Start-ups are already offering services that simplify the process of writing smart contracts. It will take a while for things to shake out and for best practices to emerge, but in Internet time, “a while” likely means a year, two at the outside. An organization that writes its rules so as to operate in a P2P manner would do well to automate the enforcement of the rules. Not, I want to emphasize, to remove the human element from the organization and its internal culture, and turn the whole thing into some dispassionate, clinical machine. Rather, to do just the opposite–to offload the procedural stuff, and spend more time working and learning together as peers.

Third, and probably most compellingly, it won’t be long until clients begin to ask for blockchain verification of work. This will happen gradually, and rather haphazardly, and some clients may not quite know what they’re asking for or why. But if we can’t respond, they’ll move on to others who can.

Bottom line: do you need the blockchain to build and run a platform co-op? Nope. At least not any time soon. Don’t put other work on hold to become an expert on it. On the other hand, if even a fraction of the hype around the blockchain turns out to be accurate, platform co-ops should have a working understanding, not of the technical nitty-gritty, but of the capacity it gives us to do our jobs better and work towards our goals. We need to remember that technology is great, but only to the extent that it serves us, and the more of us it serves, the better.