Digital Transformation & Blockchain – Against Traditional Accounting
Keywords – Digital Transformation
It is a well known fact that emerging digital technologies are disrupting most markets.
In the financial sector though, technology has taken a little longer to catch up.
In previous articles, we have discussed how accounting softwares have developed. However, the impact of digital transformation goes far beyond.
In fact, traditional bankers are having to rethink a long lasting strategy now. This is because the likes of Sterling and Monzo are catching up quick, given their freedom from legacy systems and an ability to adapt to customer needs far quicker.
So, what is the future of currency?
The Future Currency
How often do you have cash these days?
Now think about how often do you use cash as compared to five years ago?
Most probably, your use of cash has declined considerably.
In short, you are now able to track your spending far more effectively through digital means. This potentially indicates that our financial eco-system demands security of economic value. And, here, the issue with traditional banking is that transactions can easily be manipulated. To counteract, the 2007-08 financial crash has put blockchain on steroids.
Imagine that you are able to track and access any transactions triggered by real people, without the ability to edit. In short, the data remains open but safe from any form of manipulation.
This is the exact idea behind blockchain.
The presented idea of blockchain above works with ‘blocks’, where as spreadsheet works with “rows” and “columns”.
A block in a blockchain is a collection of data. This data is added to the block in blockchain, by connecting it with other blocks in chronological order, creating a chain of blocks linked together. The first block in the Blockchain is called a Genesis Block.
As a collective, Blockchain is a distributed ledger, which simply means that the collection of financial accounts is spread across the network among all peers within the network, and each peer holds a copy of the complete ledger.
It can be concluded that communities are steering towards a financial system that is collaborative, flexible, and multi-agency supported to dilute power.
Most importantly, financial wealth security and transparency are the drivers of the future of money and accounting.
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