October 2018 marked ten years since a whitepaper written by Satoshi Nakamoto—the still anonymous individual or group of individuals—was released on the internet.
The paper described a compelling vision of the future in which “a purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”1 Bitcoin was the first decentralized cryptocurrency (the first genesis block was created in 2009) and currently has the highest market capitalization. Since then, however, numerous other cryptocurrencies have been created and there are now estimated to be over 2,000 different virtual currencies in existence. For reasons which we explore in this article, however, while there is an impetus from many organizations in this industry to become an audited institution, there still exists a gap between expectations and reality in achieving this. There are challenges in becoming “auditable”—along with practical recommendations for how organizations in this field can move forward on a path to becoming audit-ready.
The notion of the “trusted third party” in Nakamoto’s vision has the potential for far-reaching positive implications in our organizations and society broadly, not least for the accounting profession, where—depending on who you talk to or what source you read / watch—you will be met with differing opinions on the impact that bitcoin’s underlying technology, blockchain, will have on the accounting profession.
At the heart of this debate are two considerations. First, to what extent will the technology impact the accounting profession as a whole? Much continues to be talked about on this topic, specifically around concepts such as automated accounting and the role of the traditional accountant in a blockchain world.
1 Nakamoto, Satoshi. 2009. “Bitcoin: A Peer-to-Peer Electronic Cash System.” www.bitcoin.org. https://bitcoin.org/bitcoin.pdf