November 27, 2021

Triple Entry Accounting: Harebrained or Genius?

I've never been to SXSW, but I imagine that all the smart people talking about smart ideas and getting all smart with each other is nauseating. Still! If I had been in Austin yesterday, I probably would've enjoyed this Bitcoin presentation that included a heavy dose of accounting history from Jake Benson, founder of LibraTax: 

Benson, in a bravura performance filled with self-deprecating humor about accounting, argues that Bitcoin is “just a system of accounting, nothing more.”

Benson, after walking through highlights of the 7,000-year history of accounting, noted the fundamental transforming moment — the “most important day in accounting history” — the 14th-century invention of double-entry accounting by the Italian Luca Pacioli.

The so-called BlockChain system of computer records that underlies Bitcoin’s use is just a form of ledger deriving from the same principles as the double-entry ledger of 700 years ago.

Easy enough. Although, it should be stated that Pacioli did not invent double-entry accounting, he merely was the first to produce "the first detailed manual on double-entry accounting." In other words, Pacioli was the first to document the principles of double-entry accounting. And I guess for some accountants, that's everything
ANYWAY. What's even more exciting than tracing Bitcoin back to the Renaissance is what this means for the future of accounting: 
In concluding his talk, Benson mused about whether BlockChain could be the beginning of something big in accounting: a triple-entry ledger. “BlockChain gives us a public book of all Bitcoin transactions,” said Benson. “What if there could be another public book, beyond just Bitcoin,” meaning a ledger that would tally and keep public all transactions, including traditional real currency.
I can't decide if this is the most crackpot idea I've ever heard or if it's on the cusp of genius. Maybe one of you get to work on this and report back by Friday?   
 

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

New SOX In the U.K.? It’s (Probably) Coming Soon

The February gloom was broken recently by the news that the British government will be introducing reforms targeting company financial reporting and audit oversight. In truth, none of this should be a surprise. There have been several accounting scandals in recent years where the directors of various companies have been unscrupulous and their external auditors […]