Block Chain Technology and the Accounting Profession Essay

Introduction

Among the defining structures of a country's economy, legal or political systems include the contracts transactions and their records (Prathyusha, Kavya & Akshita, 2018). The structures lay boundaries of many organizations, protect assets, establish or verify chronicles events. However, the bureaucracies formed to regulate these essential tools are not up to digital economy transformation. Thus, blockchain got built as a solution to the problem. The new technology is at the heart of virtual currencies, and it is an open distributable and programmable ledger where transactions between parties can get recorded.

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What Brought About the Change

Blockchain technology got revolutionized by a significant innovation of digital currency known as bitcoins. The currency became invented in the year 2009 where transactions can get made without involving middlemen like banks (Bohme, Christin, Edelman & Moore, 2015). Bitcoin is among the many cryptocurrencies, regulated by an interconnection of various computer networks called the peers. The computers use encryption methods, and as a result, productivity is independent of authorities. Blockchain has a restriction database where the entry transactions constitute of bitcoin, hence a digital ledger. In regular business, a record of cash which moves in and out is kept, and this applies to cryptocurrency users. All the bitcoin transactions need to get recorded accordingly. Nevertheless, a significant distinction between the two scenarios is that blockchain is distributed and decentralized with open access ledger that shows permanent records (Wright & De Filippi, 2015). The recording in blockchain systems can only get verified by computers network of peers. In that way, any person can view records but cannot alter without a majority's consent.

Bitcoins are produced through mining undertaken by a computer network, where miners are organizations or individuals connecting computers using special software to avail processing abilities. Organizations use their devices to communicate with peer network, and with the help of software, complicated algorithms are performed leveraging the power of graphics cards. The service of creating new bitcoin and authenticating blockchain get rewarded with bitcoins. The so produced bitcoins are stored in a crypto-wallet, which is an application software with private code. The private keys are interconnected with public systems, bank accounts. Bitcoins are used in merchandise operations, making international payments as the tools are not tied to the subject of regulation. In most cases, small businesses prefer bitcoins due to the absence of credit card fees.

While bitcoins are digital assets concerning currencies, blockchain is a technology at which those currencies are built on, and primarily depends on the system. Therefore, in the absence of blockchain, the bitcoins would bear no value as there would be no secured transaction method. With blockchain technology, verifiable database ensures all records get purported transferred, and that is how individuals get protected from overspending or fraud. Through blockchain, computer networks responsible for verifying transactions must confirm that a transaction is valid before a block gets added to the chain. Such level of protection and security bears the significant relationship between blockchain and bitcoins. Other innovations have brought about revolutionizing the field of blockchain technology. For instance, a realization that blockchain would result in the potential global interconnection of organizations. A considerable percentage of bank institutions are investing heavily in the technology making it accessible. A smart contract is another innovation that led to emerging use of blockchain as it represents financial instruments likes loans and bonds, built on personal computers. In the present time, the idea of proving stake systems as innovation is bringing about blockchain technology. The miners in the systems have the maximum computing power and can authorize validation of carried transactions. The organization in this stake systems operates a vast data center, providing security for payment as an exchange, in forms of cryptocurrency.

Impact of Blockchain Technology on Business Community

Blockchain technology has potentially impacted the accounting profession by enhancing a reduction of maintenance cost of manual ledgers while providing certainty over a history of assets. More companies are exploring the technology opportunities in the business-like audit trails, and this means that firms have undertaken the blockchain initiatives to further its understanding (Lemieux, 2017). The audit firms and assurance profession are staying abreast of developments and continues to learn blockchain applications in business. Many organizations have realized that the technology has the potential to make impacts on all record keeping processes. For instance, blockchain not only does it affect transaction record, but also the initiation processes, authorization and the manner of reporting.

With the new model, the changes in business will affect office operations like tax preparations or financial reporting. Soon, government activities are expected to get funded by the addressed cryptocurrencies, like for instance, the authority can issue tokens such as virtual vet coins. Typically, cryptocurrencies like bitcoin have its value raised from one dollar to a hundred dollar in five years. Since it gets anticipated that the currencies are here to stay, each day economic functions will shift from monetary financial system to cryptocurrencies. The bitcoins, for example, will allow a tokenization value, and this will enable user trade with the amount of their artwork. The whole system of economy will depend on token or cryptocurrency making the need to redefine the value of money.

Along with the trend of automation like the machine the technology will facilitate more and more transactions in the accounting, level. In this scenario, the accountants will be those who successively work on assessing interpretation of blockchain information records, and individuals who are able to marry economic valuation. The possibility of existing debtor certain is high, in courtesy of blockchain technology, though the financial worth or recoverable value is being debated. Also increase in scope of accounting will take place by eliminating reconciliations and availing transparency over history records (Lemieux, 2017). Areas that are deemed too hard or not reliable to measure like data value of a corporation may get developed along with increased scope of accounting. Accounting is a study of organizational field and stands to benefit from the change. There are many challenges regarding the management of far-flung operations, and thus calls for the need of accuracy or precision. The blockchain has the ability to manage all of the mentioned work. The transparency of this change reveals visibility to all records for approved users and in that way, the work of auditors could get decreased with validation and sampling transactions. However, the auditor will be allowed more time to control or focus on investigations of anomalies. Opportunities are rising for the certified public accounts to use the technology to expand assurance services in areas such as the sustainability and cybersecurity.

Another impact is that blockchain has the ability to lottery market by availing anonymity and private participation. The potential for fraud will get reduced, and that is a significant significance brought by the change. The winning results will get publicly recorded and distributed via blockchain technique without involving intermediaries or third party. In advertising and marketing, changes will take place as well in that advertisers will lose some fraudulent operations. The technology can reduce click fraud and ensure market or advertisement executives reach their targets. The same principle applied in blockchain programs to eliminate banking fraud will get used to programming media buying.

How the Affected Groups Respond to the Change

Whenever there is new technology around, some individuals or companies like the google do not hesitate to get involved. Google corporation, for instance, has responded to blockchain technology in that it wishes to take up a startup with the change. The ledger technology has been a cause of turning many industries for the past years, and the startup is using the switch for various initiatives. Reportedly, Google company wish to work on its technology of blockchain in the effort of supporting the cloud business. According to research, the company will develop self-distributable ledgers which will get used by middle people to verify or post transactions in a similar way on how bitcoin work (Swan, 2015). The practice will be based on cloud technology and could get used to reassure consumer protection of information when in the cloud keeping. The Google company is said to have been testing the technology since the year 2016, and since then, it has explored many and expansive ways. When other companies use computing services over the internet for other business, they generate money for the firm. With much competition booming revolving the cloud services, for instance from other organization like Microsoft or Amazon, Google corporation take the opportunity of blockchain to distinguish from the market.

In other cases, centralized companies' servers that keep essential customers data have held a significant security concern in mind. We can understand that insecure servers have no potential of protection against sophisticated trick like hacking. Such incidence leaves companies exposed to financial penalties while their reputation gets damaged. The rising level of cyber-crimes has led to a reduction in consumer trust hence call for better data sovereignty. In federal standards, authorities have responded via the introduction of protection laws to restrict data. With advancement in technology, regulations are put to place companies under unprecedented pressure while integrating blockchain services. The use of blockchain as a digital identity has helped facilitate a transformation to create a better model of online information management. The effort free companies from the burden of information ownership. Technology has been embraced by many people as a tool to increase efficiency and spur the global economic advancement through peer to peer asset transfer.

Individuals have agreed that blockchain technology is sparking innovation in industries. Over five hundred companies in retail, finance, automobile, and airlines explore the change for possible benefits of ease operations and security. Recently a wave of research and development on blockchain have been carried out with high profile and concept proofs (Swan, 2015). The early software is designed to evaluate the feasibility and potentials. In the shipping industries, blockchain technology is being utilized to track shipping movements. Telecommunication industry is taking a vast thrive in the usage of blockchain as a way of approaching competition and participating in a model of service distribution.

Views Regarding Positive or Negative Impacts of Change

In my opinion, the blockchain technology will bear more positive impacts than negatives. Blockchain successively has allowed a digital currency to penetrate the world of commerce where bitcoin currencies become significantly used in the transaction process. For instance, in bank wired transactions or stock purchasing, the operations can get executed with minimal time while in the transfer of stock could take a business day as there is no access to ledgers. While intermediaries like banks resume the role of guarantors, the transaction on blockchain re...