What is Blockchain Technology and Why Should Accounting Firms Should?

What if I told you… blockchain technology is likely impacting your clients today, in one way or another?

I recently interviewed Amanda Wilkie, PMP Consultant at Booker Consulting. Amanda is a recognized expert in the industry and regularly writes and speaks on the topic of blockchain technology. We started out the conversation by talking about what it is and how it is used as a cryptocurrency, like Bitcoin, and has many more uses. Our conversation had lots of great info, but we made sure to stay out of the weeds and keep the info relatable. Read on!

Bitcoin and Other Cryptocurrencies

You may have heard of Bitcoin, which is a cryptocurrency and uses blockchain technology, but there are many other uses of blockchain than for use in currency or assets. It is also used as security tokens, utility tokens, and other uses.

When blockchain technology is used as a currency, such as Bitcoin, the transactions are discrete and very secure, but because many cryptocurrencies are not backed by a commodity or a specific currency the per-unit price can fluctuate quickly and drastically.

What Does Blockchain Technology Mean for the Accounting Industry?

• IRS says cryptocurrencies are considered assets
• IRS says more guidance will be coming soon
• For Audits, blockchain technologies enhance privacy and they provide a new level of transparency for auditors and accountants
• Will open up new opportunities for data that has not yet been available before now

What’s Next for Blockchain?

To prepare for the future of blockchain technology from a marketing aspect, consider this example of a large company employing the technology for product tracking and consumer safety. Recently, Walmart – Corporate Website – Blockchain Usage and IBM Food Trust conducted a proof-of-concept study in China where they used blockchain to keep track of Romain lettuce. When E.coli was discovered in the lettuce packages, with this study, they were able to track the product all the way back to the source, do so quickly and with high-levels of accuracy.

(Update: IBM, KPMG, Merck and Walmart to Collaborate as Pert of FA’s Program to Evaluate the Use of Blockchain to Protect Pharmaceutical Product Integrity)

How Else is Blockchain Technology Useful?

Other uses for blockchain technology include website browsers such as Brave Browser – Blockchain Technology, which blocks most of the tracking technology out there and provides the opportunity to exchange personal data for a form of cryptocurrency. This shift puts the power of personal information management/capital back in the user’s hands and away from large companies.

For more detailed information about bitcoin technology, please watch the AAMplify! podcast “What is Blockchain, Anyways?”.