Content area
Full Text
CPAs must be aware of emerging technologies that have the potential to disrupt their profession. Blockchain ĺ technology is one of them. Blockchain streamlines transaction accounting and enables al-time reporting and realtime audit. We are still at the days of the technology, considering the potential impact on the profession, CPAs need to understand the changes this new technology will bring.
Blockchain technology has been in the headlines of several publications and a hot topic at conferences. Many see in it a platform that has the potential to disrupt a vast array of industries. Still, there is tremendous confusion about the technology and how it is supposed to replace existing technologies. Generally, blockchain consists of a distributed ledger system that operates on a consensus basis, empowering peer-to-peer networks with a more secure and efficient way to transact, record, and analyze transactions in real time. This feature focuses on the status of the technology and its potential implications for our profession.
What Is Blockchain?
First known as the distributed ledger system behind the bitcoin digital currency, blockchain technology has evolved rapidly with the proliferation of competing products (Ethereum, Ripple, Digital Asset, among others). It is now considered much more than a digital currency infrastructure. According to technology research firm Gartner, there are more than 70 blockchain platforms on the market and at various stages of maturity.1
Blockchain is a type of highly secure, distributed ledger system accessible via a public or private network, where each server on the network has a copy of the system. Data is replicated among all servers on the network in real time and is encrypted. Each time data is recorded (from an authorized user, device, or machine connected to the system), it is validated by a consensus mechanism, time stamped, and recorded on a block - sort of a file of data, like a ledger page.To ensure that data is not tampered with, each block is "attached" or linked to the previous block by a cryptographic algorithm called a hash. Blockchain draws its name from this concept of chronological series of "hashed" blocks of safeguarded data that form a chain. The system is highly secure. To alter the data, hackers would face a much higher level of complexity due to the consensus...