Ledger systems are changing every day. With the juggernaut Blockchain looming, this post will explore some of the basics of the Blockchain platform and how it will mold accounting and finance in the near future.
As technology continues to advance, the financial industry is evolving in lockstep. The introduction of cryptocurrency into the market in recent years has revolutionized traditional accounting and finance practices. Perhaps the most disruptive technology that has been born as a consequence of the cryptocurrency revolution is blockchain. This is the digital ledger system which records and keeps track of the innumerable cryptocurrency exchanges happening each day, and it promises to dramatically alter the face of accounting and finance jobs in the very near future.
Until now, the task of maintaining a careful record of financial transactions has been reserved for CPA’s and financial experts. Keeping an accurate record of cryptocurrency transactions, however, requires instantaneous documentation, verification, and oversight of millions of transactions simultaneously. Demands which are beyond the capabilities of even the most well-trained accountants, but they are specifically what blockchain was designed to achieve. As cryptocurrency continues to become a more and more popular currency, an increasing number of industries — such as the automobile and real estate industries — are now increasingly relying on blockchain over human financial experts to track the market value of their assets.
With the trend towards blockchain only expected to accelerate, the world’s leading accounting firms have begun to explore ways of adapting their business models to the new technological paradigm. Thus far, the industry leaders’ attempts at integrating blockchain into their business models has been purely experimental and has yielded mixed results. The technology is too new and too unlike traditional accounting methods to allow for companies like Ernst & Young to be able to integrate it into their business practices and platforms seamlessly. This is only the beginning of the blockchain era, however. As time goes on, accounting firms will continue to develop more effective solutions for adapting their businesses to the blockchain model.
What does this mean for the future of accountants? It’s too early to tell exactly, but what can be said with confidence is that major changes are underway. While experts agree it’s unlikely that blockchain will actually make human financial experts obsolete anytime soon, there’s no question that the new technology is going to have an impact on the day-to-day lives of CPA’s very soon. In order to keep pace with the rapid changes happening within their industry, it’s crucial that accountants take all necessary steps to educate themselves about blockchain in the present. A fluency in blockchain will give accountants a tremendous edge in the years to come.
The future of cryptocurrency and its effect on the financial industry remains uncertain, but the continued rise of blockchain is virtually guaranteed. Rather than viewing this forecast as a harbinger of their own displacement from the market, accountants should be viewing it as an opportunity. The new technology will change their industry and their job descriptions in new, exciting and unpredictable ways, which means that those are able to adapt quickly to the new changes that will thrive in the new blockchain frontier.
The future of the financial industry has arrived — are you ready to meet the new challenges?
To learn more about how you can prepare your team for the future, contact us here.