Decoding Open Networks- Why We Need Them, And How To Make Them Work

Human beings thrive in a world without limitations and restrictions. This extends to everything- from literature and art, to social and political ideology, to the most path breaking scientific inventions. 

Do you remember using Blackberry devices, and the hot rage of the time- Blackberry Messenger? It made instant messaging via handheld devices, the new way to communicate with friends and family. But what about friends and family who didn’t own a Blackberry device? Well, they unfortunately got ignored. 

Email communication, instead,  is a more universal platform that gives the freedom to everyone to connect and communicate, irrespective of the email platform they use, as long as it is internet-enabled. This ensures  much more autonomy and the possibilities are endless from there! 

This brings us to a very critical concept- Open vs. Closed Networks.

What are Open and Closed Networks? 

A closed network is one in which only members of the network can interact with one another, and outsiders cannot gain access. It could also imply a network that uses proprietary technology which is not directly interoperable with other networks. 

An open network is one in which the architecture is open every step of the way. This allows a variety of entities to provide some service, information/ expertise, or other notable value, on an equal footing, and enables a free exchange of ideas and fosters innovation. 

Let’s take an example to understand open and closed networks better. 

We’ve all become so comfortable with digital payments now. Digital payments too started out with some key players that allowed transactions only within their network. For example- you could use GPay to pay only merchants who had GPay business accounts. While the digital wallet was a revolution, it still was limiting. 

And then came UPI. It became the conduit between all these disconnected platforms like Paytm and GPay. UPI built a seamless network for us to use just about any platform we choose, as long as we had a UPI ID! This opened up a world of opportunities and drastically improved the adoption of digital payments. UPI is thus the perfect example for an open network, and what it can do! 

Open vs. Closed Networks 

Owing to the very nature of these networks, open networks facilitate what is called exploratory learning- generating new innovations, ideas and solutions by leveraging new ways of thinking and doing things, especially from those you may not have ideated with in the past. Exploratory learning involves an open-to-all solution space, with participants having access to and appreciating new and original, rather than existing, ideas and information, without the restrictions of any platform. 

Innovation requires open networks that will allow a free exchange of new ideas and new thought processes and working methods. Closed networks, on the other hand, could end up slowing down the innovation process.

How are Open Networks built? 

To build an open network, and ensure its success, the most important step is building an inherent trust  in the ecosystem itself. And this inherent trust becomes even more essential when the network is wider. The network needs to be designed in a way that every transaction on the network is guaranteed of authenticity by default. 

This will happen in two ways- First, is the nature of the network protocol itself which ensures trustworthiness of the information shared, as it will be directly fetched from the source system. Second, the network must be built in a way that compels users to provide information as per best of their knowledge. Genuine information providers should be rewarded and bad information provided must be penalised on the network.

The participants can, therefore, take authenticity of information shared on the network as a given, so much so that they don’t even feel the need to establish trust on individual participants. We call this trust-free collaboration.

Let’s consider an example to understand this better. 

A is looking to hire X for a job. He asks B, who works in X’s previous organization, for a reference. B says he hasn’t worked with X directly, so he’d rather ask C. B checks with C, but C says his interaction with X has been limited. He’d rather ask D. D has indeed worked with X in the past, and gives a glowing reference. 

While A is grateful for the help, he is rather in a fix about whether he can trust this information or not, because the source of information is completely unknown to him. A trusts B. But who is D? Is his feedback reliable? 

Such a system of gathering feedback and references doesn’t have any consequence for D for his input, making it not entirely reliable. If the system can instead build-in accountability for D  and each of his recommendations and activities are tracked, then the information shared by him can be trusted, as he has put his reputation at stake on the network. An open network is able to address this. 

This brings us to the next topic of discussion. 

How Can We Establish Trust-Free Collaboration in the Open Network? 

The answer to this is only one- by building a reputation for every participant. Open Networks have to ensure there is a system that allows all participants on the network to build a reputation for themselves. As this is done, trust-free collaboration is automatically established in the network. 

Let’s go one level deeper now. How is reputation built? There are three things that contribute to an individual or organization’s reputation, in the context of our discussion on open networks: 

1. Identity 
2. Capability 
3. Intent

It’ll be easier to understand these three elements with an example. Bank A is looking to extend a loan to Person X. To authorize this loan, bank A must satisfy themselves that X will return the money as per the terms of the contract. For this bank A will look at: 

1. Identity– who is X? His Aadhaar, PAN, passport, driving license, and other dependable sources of information will be looked at, to ascertain his real and verified identity 
2. Capability– does X have the capability to repay the loan? For this, Bank A will look at X’s salary slips for the past few months
3. Intent– Is X the sort who has full intention to pay back, or will he commit fraud? For this the bank will look at his credit score, his past history in terms of loans taken and repaid, etc.

All of these three things will contribute to X’s reputation, and decide whether Bank A will trust X with the requested loan amount or not. 

The banking system has evolved over a period of time and is using the network concept to determine every consumer’s reputation. This is done via credit rating agencies. All financial institutions participate to share their data on customers, giving a holistic view of a loan applicant’s financial history and behavior. As this data is made commonly available to all financial institutions, everyone in the network benefits with accurate and reliable insights. 

A similar ecosystem is missing in other industries, leaving scope for trust-free collaboration and growth. And that is where we come in. 

Meet Repute

Repute is a blockchain based open network that is on a mission of building digital trust at scale, by bringing together all the three elements spoken about above. We establish identity, and enable our users to ascertain capability and intent by bringing together all the necessary data points, from the most dependable data sources. Simply speaking, we’re solving the problem of how trust is going to be built in open networks. The network could be anything. 

To begin with, we’re solving for this challenge of trust in the talent ecosystem. Our talent network is expanding at an exponential rate and will soon have a coverage of 1 lakh+ organizations with close to 10 million professionals onboard. 

Our open talent network connects HRMS platforms and HR managers via blockchain technology, and provides them the ecosystem to share information securely, and with consent of the data owner, among one another. This enables HR managers to: 

1. Digitally extend offers to the best candidates within a few minutes 
2. Eliminate risk of employee ghosting and moonlighting, due to the network’s inherent transparency
3. Onboard new employees within minutes via digital uploads of ID documentation 
4. Automatically verify identity documents from trusted data sources like UIDAI and Repute network 
5. Perform hassle free, quick and accurate background checks by leveraging the Repute open network 
6. Extend add on benefits for employees like instant loans, insurance, etc through a host of apps available through the Repute marketplace 

This is not all. The future is looking even more exciting, with innovative solutions coming up to address the critical needs of the HR fraternity. Speak to our team to learn more about these, as well as how Repute can help your business.