An Introduction to Blockchain What Does it Mean for the Accounting Profession?

Bitcoin was introduced to the world under a cloud of mystery in January 2009. A white paper, Bitcoin: A Peer-to-Peer Electronic Cash System, published in 2008 under the pseudonym of Satoshi Nakamoto, outlined the concept; to date, the authorship of the paper remains unknown. What is known is that the underlining technology, the blockchain, has implications for the accounting profession. Many are still wondering what blockchain means for the accounting profession more than 10 years after its introduction.
Brief History
It is worth noting that Bitcoin was not the first, nor the last, attempt at developing a digital currency (also referred to as cryptocurrency) and the blockchain. Several attempts existed in some form in the early 1980s and continue to evolve today:

• 1983: e-Cash concept proposed by David Chaum, a computer scientist.
• 1990: DigiCash, founded by David Chaum, attempted to operationalize the e-Cash concept. Bankruptcy followed in 1998.
• 1997: Hashcash invented by Adam Back, a computer scientist. It is similar to the underlining technology Bitcoin uses but less secure.
• 1998: B-money and Bit Gold proposals created by Wei Dai, a computer engineer, and Nick Szabo, a computer scientist and legal scholar, respectively. The proposals have not been operationalized.

Presently, over 1,600 digital currencies using blockchain are in circulation. Some critics see these virtual currencies as speculative assets, while others suggest they are good investments. Regardless, the underlying technology—the blockchain—is relevant to accountants and auditors alike.
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