Blockchain – What is this new buzzword? I’ve heard colleagues, clients, and even politicians throwing it around, but according to Accounting Today, only 1% of today’s workforce considers themselves an expert. So why is it becoming such a hot topic? Who is it affecting? And what does it mean for your business?
What is blockchain?
Blockchain is defined as “a digital database containing information (such as records of financial transactions) that can be simultaneously used and shared within a large decentralized, publicly accessible network” (Merriam-Webster definition). In other words, it’s a collection of transactions and data that is unchangeable and near-incorruptible. This system is known as distributed ledger technology. Blockchain isn’t just about recordkeeping; it’s about how the records are both created and kept. Each transaction is called a block, and each block is recorded sequentially, creating a chain (hence the name). Transactions are created authentically with layers of verification that make it easy to track, trust, and store. The most well-known use of blockchain is through Bitcoin and other cryptocurrencies. But its application is so much more vast than that, and its potential future usage is far more significant than most people realize.
Who’s using it and how?
A considerable number of the big banks and technology companies around the world are starting to implement blockchain technology including J.P. Morgan Chase, IBM, and Microsoft to name a few. Beyond the big business applications, many startups are using this technology for everything from payment systems, to information sharing, smart contracts, and more. Even governments around the world are starting to invest in this technology; the Dubai government has plans to issue all government documents using blockchain by the year 2020. This global change and innovation is sure to have a huge impact on businesses large and small alike. A major sector where privacy is important is the medical field. Blockchain is a solution where doctors, insurance companies, and hospitals can share patient medical files in real time if they are on the same network. The technology can maintain patient privacy while improving the quality of care received from a patient’s care provider.
Other thoughts
Is this technology safe?
Blockchain uses cryptography (secret code) which prevents records from being modified, altered, deleted, or destroyed. With this fast-paced electronic data stream, it makes it nearly impossible for a hacker to create an alternate chain more quickly than the actual valid chain.
The pace of technological change is continually accelerating. For example, as of the year 2000, the rate of technological progress was five times faster than the average rate of growth during the entire 20th century.
How can we help?
At DiSanto, Priest & Co. we’re keeping abreast of the latest technological innovations, including blockchain and its many applications. We understand that we live in a time of exponential technological advancement. With that rapid growth comes new rules and regulations for both tax and financial purposes. That’s where we come in! As your trusted advisor, we’re here to help you as we navigate through this new and exciting time.