Whether you’re aware of it or not, blockchain is revolutionizing and disrupting industries across the board, and the accounting profession is no exception. There are several promising benefits of blockchain in accounting, but exactly what is it and should you be embracing this new technology?
What is Blockchain?
Although blockchain technology has been associated primarily with cryptocurrencies, there are other applications where it can be used. According to Brad Bulent Yasar, a cryptocurrency expert:
“A blockchain is a continuously growing list of records, called blocks, which are linked to each other and secured using cryptography. Each block typically contains a hash as an identifying link to a previous block, a timestamp, and transactional data. Blockchains are inherently resistant to modification of the past data and can serve as an open, distributed ledger that can record transactions between two parties efficiently, verifiably and permanently.”
Blockchain in Accounting
So, how can blockchain technology be used in the accounting profession? Blockchain is an open, digital ledger of transactions that is both public and shared among a network of members. According to, Deloitte’s recently published whitepaper, Blockchain Technology: A game-changer in accounting?:
Instead of keeping separate records based on transaction receipts, companies can write their transactions directly into a joint register, creating an interlocking system of enduring accounting records. Since all entries are distributed and cryptographically sealed, falsifying or destroying them to conceal activity is practically impossible. It is similar to the transaction being verified by a notary – only in an electronic way
In order to add a block to the chain, it must be reviewed and approved by all network members first. No individual member can add, delete, or alter any block without the knowledge and consent of the network.
Is Blockchain Secure?
While there are still questions about blockchain’s security and possible loopholes, the general consensus is that any tampering should be impossible.
How Will It Affect the Accounting Industry?
There are theories about which sectors will be hit first, but it’s hard to see exactly how blockchain will affect the accounting industry at the moment. However, with the nature of blockchain, it’s almost a given that record keeping will fundamentally change. It’s a pretty simple idea when you think about it, but its impact is profound.
Auditing, too, will likely be impacted as blockchain ensures every transaction is recorded, verified, and shared immediately, possibly paving the way for a fully-automated system. The process of transferring of money is also a likely target, as transactions could be made in real-time.
Adapting to Blockchain Technology
When any new technology is introduced, the key is to accept and adapt, instead of reject and fear. Yasar states that, “One of the greatest advantages of using blockchain is its inherent adaptability for virtually any use. It is not all that complicated to create a blockchain to specifically cater to the needs of a particular business or organization.”
Learning all you can about blockchain and how it will move the accounting profession forward is your best bet to staying relevant and valuable. Try figuring out where blockchain can be applied to create new business opportunities in order to replace the ones that may become obsolete. Understanding as much as you can about blockchain now, will give you the advantage to pivot when the profession begins to shift.
For a great visual of how blockchain will affect the accounting industry, check out this infographic by Maryville University.