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Positive Impacts of Blockchain on CPAs

Consider for a moment, the largest retailer doesn’t own a single store, the largest provider of sleeping rooms doesn’t own a single hotel and the largest provider of transportation doesn’t own a single car?

The world has shifted in recent years to the sharing or collaborative economy – largely enabled by technology and will expand to touch almost all aspects of society in ten years or less.

The biggest change to finance and accounting is expected to be the blockchain, the underlying distributed mechanism for Bitcoin and other digital currencies. Think of the blockchain as a way of keeping track of trusted transactions based on distributed computing sometimes referred to as the Internet of Money. The blockchain is essentially a global cryptography accounting ledger in the cloud.

The blockchain has already provides programmable smart contracts for payouts between two parties once certain criteria has been met, much like collections, providing government the ability to add a small transaction tax built into the blockchain itself.

Positive Impacts of Blockchain

• Increased financial inclusion in emerging markets, as financial services on the blockchain gain critical mass.

• Disintermediation of financial institutions, as new services and value exchanges are created directly on the blockchain.

• An explosion in tradable assets, as all kinds of value exchange can be hosted on the blockchain.

• Better property records in emerging markets, and the ability to make everything a tradable asset.

• Contacts and legal services increasingly tied to code linked to the blockchain, to be used as unbreakable escrow or programmatically designed smart contracts.

• These contracts are secured in the blockchain as “self-executing contractual states,” which eliminates the risk of relying on others to follow through on their commitments.

• Tax collected for the first time by a government via a blockchain.

Unknown Impacts of Blockchain

• It is unregulated and not overseen by any central bank, meaning less control over monetary policy.

• Real-time taxation

• A 2016 mayoral candidate of London has suggested implementing technology to upgrade the existing government ledger for land and for the city’s financial and budget records. Because these records are kept permanently, there is a strong possibility (without the blockchain) for them to be altered or faulted.

The current total worth of bitcoin in the blockchain is around $20 billion, or about 0.025% of global GDP of around $80 trillion.