The internet disrupted the distribution of information and blockchain could prove to be as disruptive in the distribution of value. There is an imperative to to further our understanding of blockchain and its long-term impacts.
FinTech and blockchain are on the radar for many. Some of the examples often given are about the benefits around cheaper, faster and more secure transactions and operational chains in industries like education, pharmaceuticals, banking and international development. Such innovations would pose challenges to many intermediaries, including accountancy and finance professionals.
Trust is fundamental for our profession and there is a need for more understanding and confidence building around technologies like blockchain. While it will be premature to claim that blockchain will eliminate intermediaries, it will create a different typology of intermediaries. Therefore, we need to first think about the shared norms that will inform and orient the approaches of creating blockchains. This could be a key role for the accountancy profession to play – in the designing and implementation.
We believe that blockchain is not a technological solution – it is cultural and governance solution. Technology should follow the need. Technology opens the opportunities to think about a problem but the use cases should be developed from a number of perspectives.
Most of our business practices are based on very Renaissance notions of seeing the world. We tend to think about objects and entities in isolation. Like thinking about the atom as the indivisible single element. Even today, our institutions are designed by our world views – seeing things in isolation. This is how we think about corporations, about individuals. We approached it like that because it was easily manageable. Now, we see that things are actually interdependent and we are trying to understand systems risks.
The big caution here is how we start to think not only about technology but also world view. In the western world view, the narrative has always been about the individual, about the corporation at both cultural and product level. We can see this now being challenged because… You could argue that the individual as a discreet method of measurement, the corporate philosophy – are both a product of the existing bureaucracies. This is the true cost of our existing model of bureaucracy structured in the way we say the world.
Now technology is changing the cost of administration. And this will allow to unleash new types of organisations and new types of behaviours.
Blockchain could be as innovative as the double-entry bookkeeping. Or it might not change anything – it all depends on us taking the right approach.