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The blockchain is coming

22 December 2017

Blockchain could one day replace both banks and lawyers, claims the ICAEW.

A new report Blockchain and the future of accountancy explains that blockchains that transact with one another could supersede central authorities such as banks, clearing-houses and lawyers.

ICAEW’s David Lyford-Smith said blockchain means organisations can work together without an intermediary, but also no longer need to have institutional trust in each other.

He ventured: “This is potentially a seismic shift in how we do business. It will have knock-on effects on everything from record keeping to supply chain management and accounting and audit.” Lyford-Smith felt that it could have the potential to remove the middleman institutions, gain transactional certainty, reduce costs and bias, and open up access to more participants.

Blockchain is a foundational change in how financial records are kept and updated, akin to “universal entry bookkeeping”. Instead of having one single owner, blockchain records propagate identical copies to all their users. Any participant in the ledger can trace all previous transactions, allowing increased transparency and making the blockchain ‘self-auditing’ and transactions permanent.

* Think-tank Reform has said that passports should be put on the blockchain, along with other official forms of identification, to create one single online identity for UK citizens. It said that the technology can be used to provide a single source of authenticated information and using it to underpin public services could spend up payment of benefits. Reform suggested that an app should be paired with biometrics so the public can give approval for the use of information using a thumb print or face scan with their smartphone.

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