Blockchain could be part of future information management solutions, but it’s not ready yet.
Blockchain is presented as a secure transaction information solution and described with words like “decentralized”, “unalterable” and “permanent”. It’s no wonder that it has piqued the interest of businesses and particularly e-commerce companies who are looking to cater through Privacy. Business wants to be able to create, edit, collaborate on and disseminate their information in a secure environment. They also want to use their business information to inform evidence-based decision making. Is it any wonder that business wants to know how blockchain can help them with these goals? As I’ve been hearing more and more about blockchain over my last two information studies co-op work terms, I decided to survey some academic literature and investigate blockchain and its potential applications in managing enterprise information. Here is my explanation of blockchain and some takeaways from my research. Just remember, if you are planning on investing in blockchain, I’d recommend reading this investment 102 guide first.
Blockchain encrypts transactions across a decentralized network of computers. It validates entries, safeguards them and preserves a historic record of their addition to the chain (Crosby et al., 2016, p. 9). A block is created and the potential transaction is broadcasted to all known nodes on the network; the network nodes validate and approve the transaction and the validated transaction is bundled, along with other validated transactions, into the newly created block. The new block is added to the blockchain, which is replicated on every node in the network and used to validate future transactions. While blockchain has been most famously used to protect the authenticity of Bitcoin financial transactions, the process can be extended to documents and data transactions (i.e. moving a document, instead of money, from one place to another). And today, cryptocurrency can carry out not only financial transactions, but also bitcoin margin trading. Id est, you can now trade stocks through the magic of this wonder currency.
According to the Deutscher Aktienindex, a block’s information is stored inside its header, which contains a hash value. A hash value is a unique fixed-sized alphanumeric string, which is created by a cryptographic algorithm when information is being packaged to insert into the block. Each transaction to be added to a block is cryptographically “hashed” into a unique hash value and each block’s hash value contains the hash value from the current transaction being packaged and the previous block’s hash value. The blockchain is an unforgeable record of the transactions and their sequence. Once something is entered, it cannot be erased (Crosby et al., 2016, p. 8). In order to alter any part of the chain, one needs to alter the whole thing. It is permanent and unalterable because each block is linked to the previous block.
Victoria Lemieux, the lead of the Blockchain@UBC research project, has made some important points about blockchain regarding recordkeeping. I’m sharing them here:
Victoria Lemieux’s key FAQs about the Bitcoin Blockchain
- The blockchain is not a decentralized archive. Original records are not stored in the blockchain, only alphanumeric hashes of original records are stored (Lemieux, 2016a, p. 120). Therefore:
- You cannot reproduce or reverse engineer an original record from the alphanumeric hash in the blockchain. If you turn a document into an alphanumeric hash, you can’t turn that hash back into the document (Lemieux, 2016a, p. 120); and
- Using blockchain does not ensure the trustworthiness of the records in the chain. The blockchain system trusts that what you are putting into it is reliable and authentic and has no way to detect otherwise (Lemieux, 2016a, p. 120).
- The reliability, authenticity and long-term access of the records cannot be guaranteed without adherence to recordkeeping principles (Lemieux, 2016b, Slide 7).
What this means in plain terms is: if you’re looking for a secure location where you can store, retrieve, edit and re-store your unstructured information, blockchain isn’t the one stop solution. Findlay (2015) predicts that a blockchain “storage mechanism could offer an uncontested space from which records could be accessed” but it cannot meet those business needs yet. A blockchain solution that can meet business’ unstructured information needs as well as it has previously managed financial transactions has yet to be developed. That solution will have to take recordkeeping standards into account and it will most likely not be stand alone.
If you’d like to learn more about Blockchain, please check out the following resources:
Crosby, M., Nachiappan, Pattanayak, P., Verma & S. Kalyanaraman, V. (2016). Blockchain technology: beyond bitcoin. Applied Innovation Review, June 2016(2). Retrieved from: http://scet.berkeley.edu/wp-content/uploads/AIR-2016-Blockchain.pdf
Findlay, C. (2015). Decentralised and inviolate: the blockchain and its uses for digital archives”, Recordkeeping Roundtable. Retrieved from: http://rkroundtable.org/2015/01/23/decentralisedand-inviolate-the-blockchain-and-its-uses-for-digital-archives/
Lemieux, V. (2016a). Trusting records: is blockchain technology the answer? Records Management Journal, Vol 26(2). p. 110-139. Retrieved from: http://www.emeraldinsight.com/doi/pdfplus/10.1108/RMJ-12-2015-0042
Lemieux, V. (2016b). Blockchain for recordkeeping [PowerPoint slides]. Retrieved from https://www.w3.org/2016/04/blockchain-workshop/slides/Lemieux-Blockchain_for_Recordkeeping.pdf
Lueders, D. (2016). Vicki Lemieux Comments on Records Management and the Blockchain. Retrieved from: https://nextgenrm.com/2016/09/12/vicky-lemieux-comments-on-records-management-and-the-blockchain/
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Mary Aksim is a consultant with a focus in information management and contract bid preparation. She started at Systemscope as a co-op student and transitioned to a full time consultant in 2018.