Blockchain - Creating Trust in Transactions

by Ken Urish 25. September 2017 10:12
Within the accounting profession and across many other industries, blockchain has become a hot topic. Here is why. Blockchain is a shared ledger for recording the history of transactions that cannot be altered. A major advantage of the blockchain process is that transactions can be logged in real time. Every participant has their own secure copy of the electronic ledger, every ledger is identical, and these time stamped encrypted blocks can only be added to the chain if all participants come to a verified consensus. If participants do not come to a consensus, then a transaction cannot occur. Because real time transactions can occur without a third party, blockchain would completely change the current methods of invoicing, payment processing, contracts, etc. - for all types of businesses. Cryptocurrency – bitcoin in particular – is what initially brought the digital ledger blockchain to people’s attention. But it appears that other applications are what will make blockchain a key technology in our lives moving forward. If you are a blockchain proponent, it is good to not have its future tied to the success of Bitcoin, at least if you believe JP Morgan chief Jamie Dimon. "It’s (Bitcoin) worse than tulip bulbs . It won't end well. Someone is going to get killed," Dimon said at a September banking industry conference. "Currencies have legal support. It will blow up." Cryptocurrencies aside, blockchain’s potential uses are many. Ginni Rometti of IBM states that “what the internet did for communications, blockchain will do for trusted transactions.” Blockchain has the potential to fundamentally change elements of the attestation process, and the audit and accounting profession. We are going to see applications for blockchain in many industries including Financial Services, Gaming, Real Estate, Music Streaming, Supply Chain Management, Healthcare and Insurance. It also appears that blockchain will help to develop the IoT and increase the functionality of all of these smart devices. However, applications involving the IoT will likely present their own unique security challenges with blockchain. Privacy concerns will be carefully scrutinized when it comes to blockchain. Cyber security concerns must also be addressed before people will entrust their personal information to blockchain. Blockchain is a shared ledger; however, not everything should be available for the public to access. So who, what and how will determine what people have access to private data on blockchain? Perhaps a private blockchain will resolve this issue. Blockchain is a disruptive technology that is in our immediate future. It is important to start understanding it, and the different impacts it may have on our professional and personal lives. 1 The Dutch tulip bulb market bubble is to this day one of the most famous market bubbles of all time. It occurred in Holland during the early 1600s when speculation drove the value of tulip bulbs to extremes. At the height of the market, the rarest tulip bulbs traded for as much as six times the average person's annual salary
Categories: Blockchain