Blockchain Based Accounting
Blockchain technology has the potential to upend entire industries. Especially the financial sector may undergo disruptive change. Although this technology caught the attention of many of the largest financial institutions, use cases still remain in the experimental phase. This whitepaper lays out the benefits of the blockchain technology for specific use-cases in accounting across industries.
Digitalisation of the accounting system is still in its infancy compared to other industries, some of which have been massively disrupted by the advances of technology. Some of the reasons may be found in the exceptionally high regulatory requirements in respect to validity and integrity. The entire accounting system is built, such that forgery is impossible or at least very costly. To achieve this it relies on mutual control mechanisms, checks and balances. This inevitably affects every day’s operations. Among other things there are systematic duplication of efforts, extensive documentations and periodical controls. Most of them are manual, labour intensive tasks and far from being automated. To date, that seemed to be the sacrifice of revealing the truth. The recently emerged Blockchain is a trustless, distributed ledger that is openly available and has negligible costs of use. The use of the Blockchain for accounting use-cases is hugely promising. From simplifying the compliance with regulatory requirements to enhancing the prevalent double entry bookkeeping, anything is imaginable.