Andy Cromer is a certified public accountant and partner at Arledge and Associates, an Edmond-based accounting firm.
We hear a lot about Bitcoin and blockchain. Can you explain them?
Bitcoin is essentially digitalized money and is one of more than 2,000 cryptocurrencies. These digital currencies are not tied in value to the US Dollar and will fluctuate in value. However, like all things digital, cryptocurrencies do provide certain attributes that non-digital, or analog currencies — like the US dollar, cannot. Primarily, digital currencies are extremely portable — an internet connection and a smart phone are all that’s needed to transfer these currencies anywhere in the world, at any time. No bank, credit card or any other intermediary is involved. Blockchain was created specifically by the developers of Bitcoin to provide a working platform for Bitcoin. In a blockchain, data is aggregated into blocks and then linked to other blocks through mathematics for a high level of encryption. However, the focus is now on using the power of blockchain beyond these digital currencies.
Beyond Bitcoin, what other areas could be impacted by blockchain?
Blockchain could be used for anything that is, or can be, digitalized. Financial instruments such as stocks, derivatives or trading agreements are prime examples. However, other areas not necessarily financial in nature may also be impacted. Supply chain management also makes a lot of sense. Consider that the typical new vehicle has, on average, about 10,000 parts. These parts come from all over the world and sometimes must be sourced from areas with limited governance and rule of law. Ensuring these parts are not counterfeit, produced by an organization suspected to support terror or in a region susceptible to child labor, for example, is of upmost importance. A manufacturer can record the movement of materials using the internet of things and…