The Definitive Guide to Blockchain for Accounting and Business: Understanding the Revolutionary Technology

by Saurav K. Dutta (Editor)

Overview

Blockchain: a disruptive technology, or a new chance for the business world? The answer is both. With potential to change how economic transactions are recorded, stored, and verified, blockchain is changing the very face of the accounting industry. Despite its ramifications, business students of today and the practicing accountants of tomorrow are not being adequately trained in this new technology, due to a lack of resources exploring it from an accountant and business expert's perspective. 

 Through its discussion of real-world and 'use-cases' The Definitive Guide to Blockchain for Business and Accounting distils an abstract technology into relatable experiences for business professionals. Including chapters from practicing professionals in the blockchain industry, The Definitive Guide shows readers how this innovative technology is changing the fundamentals of the business world. With international subject matter experts, this exciting new book includes perspectives from accountants, auditors, CEOs and CTOs on how blockchain is rewriting the future of the business and accounting world.

Product Details

ISBN-13:	9781789738681
Publisher:	Emerald Publishing Limited
Publication date:	09/30/2020
Pages:	320
Product dimensions:	5.98(w) x 9.02(h) x 0.67(d)

About the Author

Professor Saurav Dutta is Head of the School of Accounting at Curtin University, Australia. His academic career spans over 25 years, during which he has engaged in high-impact research which has greatly informed industry practices. He is the author of Statistical Techniques for Forensic Accounting: Understanding the Theory and Applications of Data Analysis. He has published over forty publications in research journals.

Table of Contents

Foreword xv

About the Author xvii

About the Contributors xix

1 Introduction 1

2 The infrastructure Supporting Bitcoin: Blockchain

2.1 Introduction 7

2.2 Evolution of Trade - Barter System to Cryptocurrency 8

2.3 Trust - Foundation of Trade 10

2.4 Cryptocurrency - Basic Features and Challenges 13

2.5 Blockchain Introduced 15

2.6 Illustration of Bitcoin Transaction Enabled Through Blockchain 17

2.7 Blockchain Beyond Bitcoin 21

3 Basic Primer on Blockchain Terminology

3.1 Introduction 23

3.2 Participants and Transactions 25

3.3 One Word, Two Meanings and Other Misconceptions 28

3.4 Blocks, Hashes and Merkle Trees 30

3.5 Types of Blockchain 34

3.6 Essential Features of Blockchain 36

3.7 Blockchain Platforms 37

3.8 Monopoly on Blockchain 39

3.9 Summary 40

4 The Consensus Mechanism

4.1 Introduction 43

4.2 Importance of Consensus 44

4.3 Byzantine Generals Problem 46

4.4 Economics of Validity and Verifiability 51

4.5 Proof of Work 52

4.6 Proof of Stake 57

4.7 Conclusion 58

5 Smart Contracts

5.1 Introduction 61

5.2 Smart Contracts Defined 63

5.3 Economics of Microtransactions 66

5.4 Features of a Smart Contract 67

5.5 How Does it Work? 69

5.6 Smart Contract Applications 71

5.7 Advantages of Smart Contracts 73

5.8 Blockchain Facilitates Smart Contracts 74

5.9 Legal Complexities of Smart Contracts 75

5.10 Conclusion 77

6 Tokenization

6.1 Introduction 79

6.2 Untapped Potential of Tokenization 80

6.3 An Illustration of the Appeal of Tokenization 82

6.4 Operationalization 83

6.5 Use-Cases 85

6.6 Process of Tokenization 89

6.7 Growth in Tokenization Market 91

6.8 Prevailing Risks 93

6.9 Back to the Future - Asset Securitization 98

6.10 Tokenization and Securitization - The Similarities 102

6.11 Conclusion 103

7 A Framework to Evaluate Blockchain Use-Cases Contributors: Phillip G. Bradford and Roger M. Benites

7.1 Abstract 107

7.2 Introduction 107

7.3 Technical Primer on Cryptography and Encryption 112

7.4 Framework to Evaluate Use-Cases 113

7.5 Applying the Framework 116

7.6 Smart Contract: A Distinctive Feature 118

7.7 Sample Use-Cases 120

7.8 Caveats and Risks 125

7.9 Summary 126

8 Financing Corporate Expansion Through Tokenization Contributor: Mike Rogers

8.1 Introduction 127

8.2 Company Background - Curzio Research 127

8.3 Private offering - Alternatives and Challenges 128

8.4 Security Token Offerings versus Traditional Private Placements 130

8.5 The STO Process 133

8.6 Financing in the Mineral Industry 145

8.7 Conclusion 146

9 A Transparent New World: Ethically Sourced Mineral Supply Chain

Contributors: Nathan Williams and David Lee Williams

9.1 Introduction 149

9.2 Complexify of Mineral Supply Chain 150

9.3 Lack of Transparency in Mineral Supply Chain 153

9.4 Evolving Regulation on Traceability of Minerals 153

9.5 Money Laundering Through Mineral Sourcing 158

9.6 Traceability Requirements 159

9.7 Blockchain Solution 160

9.8 Incentivizing Participation in Blockchain 168

9.9 Conclusion 174

10 Tokenization of the Japanese Real Estate Market Contributor: Mike Rogers

10.1 Introduction 177

10.2 Financial Transformation Sparked by Blockchain 178

10.3 Smart Contract Standards Expedite Digital Asset Functions 179

10.4 Harmonizing Financial Regulation Across Jurisdictions 180

10.5 Digital Securities - Migration To Web 3.0 181

10.6 Projected Growth Of Security Tokens 183

10.7 Digital Securities Ecosystem 187

10.8 Real Estate Market Inefficiencies 188

10.9 The Japanese Real Estate Market 190

10.10 Tokenizing Japanese Real Estate Investments 197

10.11 Conclusion 205

1 Blockchain-Supported Business Innovations

11.1 Introduction 209

11.2 Cryptotax Business Model 210

11.3 Collateralized Lending in Cryptoworld 213

11.4 Application in Automobile Industry 218

11.5 Microrental of Parking Spaces 220

11.6 Insurance to Protect Against Flight Delays and Cancellation 221

11.7 Establishing Provenance 224

11.8 Conclusion 227

12 Internal Controls

Contributor: Gerard Brennan

12.1 Introduction 229

12.2 Risk Management and Internal Controls Framework 231

12.3 Types And Assessments of Infernal Controls 240

12.4 Auditing Blockchains/Distributed Networks 244

12.5 System Audit for Blockchain 252

12.6 Controls for the Entire Ecosystem 260

12.7 Conclusion and Other Considerations 263

13 Future Opportunities and Challenges

13.1 Introduction 267

13.2 Health Services 268

13.3 Energy Sector 270

13.4 Maritime Industry 272

13.5 Governmenta Agencies 274

13.6 Vulnerabilities 276

13.7 Threats to the Development of Blockchain 281

13.8 Opportunity - Amalgamation of Technologies 283

13.9 Conclusion

Bibliography 287

Index 291

Editorial Reviews

'A well written book that provides a timely examination of the many challenges and opportunities afforded by blockchain technology. Thoroughly recommended reading for professionals, managers and educators.'

John Cordery

'This is a timely book explaining the essence of blockchain technology as digital ledger creating an incorruptible and de-centralised record-keeping system. Professor Dutta discusses the potential impact on bookkeeping processes and the required skillsets. The book is highly recommended for teaching students and upskilling professionals in the industry.'

Claus Otto

'A great account of evolving blockchain technology and its application across varying industry sectors. Will be a key resource in educating accounting and business professionals of the future.'

Colin Pavlovich

'Professor Saurav Dutta has been engaged in accounting education and research for many years and is committed to promoting academic and cultural exchange between China and Australia. The blockchain era has arrived which will bring many changes to accounting and finance professions. This book will enhance our understanding of the subject, deeply and comprehensively.'

Xiao Xue

'Professor Dutta is a brilliant researcher, recognized teacher and an accomplished administrator. In this timely book, he guides a non-technical reader through a complex topic with effortless ease. A must-read for everyone connected with Business.'

Bin Srinidhi

'An outstanding and valuable work for the accounting professionals and learners to understand how to apply the method of blockchain on accounting and business management.'

Professor Tao Meng

'A valuable resource for business and accounting professionals to gain a non-technical perspective o. AADDn the inherent opportunities in blockchain.'

Professor Carla Wilkin

'Through the description of various scenarios, this book illustrates blueprints for possible applications of blockchain. This book will lead in the education of future professionals in accounting and business.'

Birong Dong

'An excellent coverage of blockchain evolution with an industry perspective of how it will mature in the future. It has several examples of how blockchain will be used, and that makes it easier for readers to apply the blockchain techniques as well.'

Shyam Mamidi

'A very intuitive and comprehensive book on blockchain technology and its business applications. Particularly relevant for professionals to understand the implications for business and accounting.'

Wes Bricker

'Professor Dutta has provided a fascinating and comprehensive introduction to a technology with critical applications to financial reporting, risk management, and auditing.'

David Marcinko

'I have no doubt that Professor Dutta’s book will be very well-received. He presents a clear and comprehensive overview of developments in blockchain technology that is both timely and highly accessible to those looking to understand its wide range of business and industry applications.'

Professor Deborah Terry AO

'Blockchain technologies have redefined the way businesses operate. A great book for those who want to master the knowledge of blockchain.'

Deborah Leung