Readers will no doubt be aware that we are at the dawn of a new system for Accounting and Money - it is called Blockchain.
The blockchain is a database that is maintained collectively by a number of users. All changes are encrypted in such a way that they cannot be altered or deleted without having a record of what the original or earlier data was recorded. Blockchain can be used to record a plethora of different data - birth records to business records. A permanent and secure record is established or if you like written “in stone”. Currently it is believed that one in ten government organisations plan to invest in blockchain technology. Sweden is testing a blockchain based land registry and Dubai wants distributed ledgers to power its entire government by 2020.
It will also be interesting to see how the blockchain affects criminals. If all transactions are recorded in perpetuity will there be a crackdown on criminal activity? There will be no hiding what amounts were sent and to where.
This will be a major transition - but we have already been there. Cash has only been a currency to tot up assets and liabilities in England since around 1829. Before then for about 1,000 years - the system of money and accounting was the “Tally Stick”.
The tally sticks were taken from one piece of wood, usually made of willow, which was then split lengthwise, meaning the pattern of the wood matched perfectly and showed they related to the same transaction. Every asset sale and purchase, tax payment and loans were recorded on both sides of the wooden ledgers. The smaller and narrower part always went to the borrower – thus the phrase - “getting the short end of the stick”. The longer part went to the lender. This was called the stock – thus the phrase “stockholder” which leads us to the term “stock market”. Holes in the board indicated your wealth.
So when it comes to blockchain - good luck with your tally!