As the blockchain and crypto space grows, it’s becoming increasingly clear that they will be one of the foundational technologies for Web 3.0. New decentralized services are now being launched that leverage the strengths of blockchain for mainstream use cases.
The HR industry was one of the first to benefit from this movement, providing one of the earliest examples of how blockchain and crypto can provide a more efficient and effective foundation for building online applications.
What can blockchain offer the HR industry?
Blockchain technology has some characteristics that have inherent benefits for the HR industry. As decentralized shared ledgers, public blockchains such as Ethereum, Binance Smart Chain, and TRON have the following characteristics:
Openness. Anyone can use these platforms and interact with the decentralized applications (dApps) built on them. In contrast, Web2’s centralized applications are permissioned by default and controlled by administrators.
Transparency. Anyone can view the contents of the ledger, inspect all transactions, and audit the code that drives dApps, increasing confidence in the fairness and integrity of the platform.
Immutability. Once a transaction is confirmed on the blockchain, it cannot be reversed.
No trust required. Since there is no middleman and single point of failure, blockchain-based applications do not require trust in any third party (whether it is a company or an individual). All transactions are executed on the blockchain by the entire network of validating nodes or miners.
Borderlessness. The blockchain network is distributed all over the world, and all members of the network share the same rules and interests.
The combination of these features enables the creation of software with ideal functionality for HR applications:
Recruitment software is available to anyone around the world, without any barriers to entry.
Organize work and automatically pay freelancers or employees once the task is completed through smart contracts (code) that run trustlessly on the blockchain.
Make fast, secure and global payments in a variety of currencies.
Use cryptocurrencies and tokens issued by any government or central bank, but may be associated with a specific industry or use case.
The Growth of Crypto and Blockchain in HR
Over the past two years, blockchain and cryptocurrencies have rapidly gained popularity as a means of organizing work and accepting payments. This adoption has been driven primarily by the coronavirus pandemic, which has not only altered work patterns due to lockdowns and shutdown measures, but has also sparked interest in alternative assets due to skepticism about traditional economic policies, as central banks have engaged in massive money printing.
As more people seek freelance opportunities and realize that they don’t have to work for businesses in the same country as they do in, cryptocurrencies fill the need for an efficient, global payment system. The traditional banking and remittance industry is ill-suited to moving money around the world. Long delays and high costs are the norm, making smaller payments uneconomical. Many people are excluded from using these services due to a lack of banking services or lack of access to them due to political reasons. Cryptocurrency payments neatly circumvent these issues, allowing fast, low-cost payments to anyone, no matter where they live.
As cryptocurrency becomes more popular and the threat of inflation grows, more and more high-profile people are choosing to receive payments in cryptocurrencies, further enhancing the legitimacy of this new asset class:
In December 2020, in a landmark deal, Carolina Panthers offensive lineman Russell Okung converted approximately $6 million of his salary into Bitcoin through mobile payments company Strike.
In April 2021, Jacksonville Jaguars quarterback Trevor Lawrence partnered with Blockfolio to convert his $24 million signing bonus into Bitcoin.
Due to concerns about inflation, in July 2021, New York Giants running back Sokoun Barkley said he would hold more than $10 million in annual endorsement, marketing and sponsorship agreements in Bitcoin.
In November 2021, Los Angeles Rams wide receiver Odell Beckham announced a partnership with Cash App to convert his $750,000 base salary into Bitcoin.
Many other NFL and NBA athletes have followed suit, but it’s not just sports celebrities who are interested in cryptocurrencies.
Miami Mayor Francis Suarez wants to make South Florida a hub for blockchain and crypto companies. In November 2021, he demonstrated his resolve by saying he would accept Bitcoin for his first month’s salary. Not to be outdone, New York City’s new mayor Eric Adams announced he would pay his first three months’ salary in Bitcoin.
Some members of Congress have expressed support for cryptocurrencies and revealed that they have invested large sums of money in Bitcoin and other cryptocurrencies. Among them, Tennessee Senator Mark Green and Wyoming Senator Cynthia Lummis topped the list. Lummis bought about $75,000 worth of Bitcoin in 2021.
Several politicians, including Andrew Yang and Darren Soto, have welcomed cryptocurrency donations to support their election campaigns.
Blockchain Human Resources Solutions
New software platforms are coming online to meet the emerging demand for cryptocurrency wage payments and blockchain HR processes. Notable examples include:
Bitwage provides cryptocurrency HR and payroll services. The service enables individuals to receive part of their salary in cryptocurrency and companies to pay invoices in cryptocurrency, making it ideal for organizations working with freelancers around the world.
Ispolink is an AI platform that uses blockchain to connect potential job seekers and employers, collects and screens information, and matches vacancies with the most suitable applicants without third-party involvement. The solution is mainly used to find talent in the Web3 and DeFi fields.
Chrono.Tech is a Sydney-based company that uses blockchain to solve inefficiencies in the human resources industry. Its freelance platform LaborX uses smart contracts to enable employers to hire freelancers for ready-made "gigs" or custom work and automatically pay the agreed amount in cryptocurrency when the task is completed. The company has also developed PaymentX, a payroll solution integrated with accounting processes that automatically settles invoices in cryptocurrency to avoid human errors.
As the so-called gig economy grows and crypto assets become more popular, it is reasonable to expect that a significant portion of HR activities will move to these and other blockchain-based platforms.
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