THE BLOCKCHAIN TECHNOLOGY (pages 24-29) by Mrs. Anusha S Sangondimath in THE INTERNATIONAL MANAGER / ISSN: 2348-9413 (Online); 2348-9405 (Print)

A Blockchain is a type of database that takes a number of records and puts a block (actually a digital information) in a chain (a database), each block is then “chained” to the next block, in a linear, chronological order, using a cryptographic signature. It was first outlined in 1991 by Stuart Haber and W. Scott Stornetta, two researchers who wanted to implement a system where document timestamps could not be tampered with. However, it found its real world application in 2008, when Satoshi Nakomoto, invented the bitcoin, a new electronic cash system that’s fully peer-to-peer, with no trusted third party. From then, it was used as a synonym for bitcoin. Now it has stepped out of the shadow of virtual currencies and its applications can be seen in almost all of the industries such as banking, education, health care, logistics, finance and accounting, corporate governance, democratic participations, social institutions, identity management. Being the Technology based on Accountancy it stores and records the assets and liabilities as well as the transactions between the parties of the business. The concept of Triple Entry System of Accounting, though proposed in 1980’s could not be practically applicable because of problems with validation and the trusted third party. However, after the developments in the Blockchain, the accounting firms have incorporated it. It has become one of the promising technological disruptions in the business and technical world because of its unique characteristics like Disintermediation, Shared Trust, Speeder and Easier Validation, Cheaper Transaction Costs, Real Time Access and most importantly, High Security because of Provence and Cryptographically sealed data. The two basic components of Blockchain are Distributed Ledger Technology (DLT), and Smart Contracts. Though it is still in the early stage, the studies state that the Blockchain has the potential to change the future in next 20 years, as internet did before 20 years, because of its capacity to solve the problems of trust and intermediation, which could not be solved by the internet till date. This study tries to give some insight on the features, applications, challenges and the global perspective of Blockchain Technology in the field of Finance and Accounting.