Accountants should join the block party

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Best known as the technology that underpins the Bitcoin currency, Blockchain is, by all accounts, transformative.

The finance industry is buzzing with the opportunities that Blockchain could provide in terms of how the global economy works and how businesses record transactions.

Essentially, Blockchain works as a global and public ledger, without a central database that can be tampered with. It is a permanent record that cannot be corrupted, creating a trail of financial DNA.

The excitement is understandable. Blockchain has the capacity to revolutionise the finance industry, bringing the ledger into the digital age. In accounting that means all transactions relating to a business could be logged in an internal Blockchain and recorded centrally, allowing auditors or regulators to inspect a business’s books in real-time.

Real-time accounting

At Sage, we believe in real-time accounting. We recognised that the accounting practices of most small and medium businesses were outdated and hadn’t changed their processes much over the last few centuries. We set out to fix that by launching Sage Live - making accounting real-time and giving everyone a reliable, live view of how their company is performing.

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About Jennifer Warawa

Jennifer Warawa, Sage

As executive vice president for product marketing, I lead the product marketing organization and strategy for Sage worldwide.

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06th May 2016 20:25

'Er I am still not sure I get it! how in practice do these blocks work please , have we gone from bots to blocks?

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By Locutus
06th May 2016 21:38

I don't really understand it either. I think it is just a subtle advert for Sage Live, as I don't see any businesses trading in Bitcoin, paying their suppliers and staff in Bitcoin and paying their taxes in Bitcoin any time soon. The long term future of Bitcoin is in doubt anyway.

If I remember Sage were late to the cloud accounting party, so I guess this is just to present themselves at the forefront of technology.

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09th May 2016 09:28

Bitcoin is besides the point. The Blockchain has gone past it. It's a public ledger. I mean, don't get me wrong, there are plenty of businesses paying with BitCoin, and they'll continue blossoming - but there are other applications.

Essentially the blockchain can create a verifiable record of any data, file, or business. The blockchain can also create digital assets like as stocks, or bonds or even frequent flyer miles. Another cool application is smart contracts which you can couple with a verifiable audit trail.

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to Francois Badenhorst
09th May 2016 21:19

http://www.jenitennison.com/2015/05/21/blockchain.html

As you have cribbed form the net so have I !

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to carnmores
10th May 2016 11:49
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12th May 2016 11:47

As understand blockchain, what it effectively gives you is a decentralised database in which the content is verifiable using the blockchain cryptography. That overcomes the problem of data tampering. But it still leaves questions of who can access it (privacy/security); what goes into the database in the first place (security/fraud/error/normal internal control issues); agreement on data format/content (presumably Sage's data would not be the same format as Xero's even if both were in the blockchain?); etc.

I've not heard anyone discuss how data transaction volume affects performance - again, as I understand it, part of the way it works is by cryptographic techniques across many nodes making it impossible for one data item in a chain to be corrupted without detection. That's fine when not much is going on, but in the scenarios I seem painted where billions of chips in the Internet of Things are zapping transactions back and forth, has anyone confirmed that there's enough bandwidth and storage to contain the thing?

There's no doubt it's very clever, but seems to me there's a way to go before it's a mature technology. Yet a lot of people are jumping on board because it's the next sexy project to hide their non-productivity behind (sorry, my cynicism showing there).

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