Accountants And Blockchain?
What Should We Know (and Prepare For)?
It’s everywhere. Accounting industry publications are touting it, but I don’t “get” it? Not yet anyway.
In spite of all the hype, this is, for me, a difficult topic to translate into “what can I do now” to prepare?
To this point, staying informed and current has been about it. Understanding conceptually what it is and how it works is completely different challenge from starting down the road to implementing it in some fashion…
In the last couple days, I have seen several articles from thought leaders that I follow that always provide perspective on technologies that are “easier” to understand (I did not say easy…), and I thought others might find them useful.
“Here Are 10 Industries Blockchain Is Likely To Disrupt”
The following is from Bernard Marr (LinkedIn profile)
Here are highlights that I found especially useful:
“ In simplest terms, blockchain refers to a decentralized database. If you think of a traditional database like a spreadsheet, running on a single computer, blockchain distributes that so the spreadsheet runs on millions and millions of computers.”
“The real disruption here is that trust is established through collaboration and code, rather than a central authority. So you no longer need a bank to make a money transfer around the world. You no longer need an escrow account to buy a home, or a real estate agent to facilitate the transaction.”
The industries mentioned do not refer to accounting, but clearly, it will ultimately have ramifications on our industry.
Accountants will need to understand and work with those responsible for implementing blockchain projects.
Takeaway — Read up and stay informed on this topic as much as possible!
“Here’s What You Really Need to Know About Blockchain”
“ Eliminating information bottlenecks is how blockchain will truly make an impact”
The following is from Greg Satell. Greg’s writes mostly on innovation related topics and I find them informative, insightful and well written!
Here are highlights that I found especially useful:
“Still, — and very contrary to the current hype — very few of us will ever work with a blockchain or even know it is there. The real revolution will come not from the technology itself, but from its secondary effects in the form of new business models.”
Greg’s analogy to relational databases was especially helpful for me.
“With relational databases, however, all you need to know is the query language and you can extract what you need from any database, no matter who set it up. That’s why today, we can hop on a system like the Internet and pull data from just about anywhere we want. It’s what made the information age possible.”
Very few accountants actually understand relational database structures or work with them in any great detail. However, we all use them and pull information from them everyday.
This conceptual “idea” for blockchain — that we will use it in the way we work, but not actually construct or develop blockchain projects seems logical to me. That said, working with those that do “do the work” seems like a reasonable expectation all accountants should have (as I said above…)!
“The most salient aspect of blockchain is that it functions as a distributed database. Unlike relational databases that house data in one location, blockchain distributes data everywhere at once in a secure form. So we can track data wherever it goes, what it’s used for and see who alters it in any way. That will create a radically more transparent information economy.”
Accountants LIVE in the “information economy”, so we better be getting ready!
“Blockchain and Crypto Courses Explode In 2018”
Michael K. Spencer posted this Medium article which provides a insight to the explosion of interest in blockchain.
“Even Mary Meeker presented something on this. Former Wall Street analyst Mary Meeker’s well-known annual Internet Trends report for 2018, published May 30, shows interest in cryptocurrency “exploding” since January of last year.”
Don Note — The Mary Meeker report is great reading every year!
Whoa…
Wrap Up
Clearly, blockchain and it’s ramifications on many industries, including accounting, is a big deal!
Stay informed and up to date on what is developing, but it appears unlikely that we will need to implement blockchain anytime soon!
Hope this helps!
About Don
“It’s time for DIFFERENT”
Don is passionate about helping professionals and organizations keep up, develop and adapt to the changing business world that we operate in.
