Bitcoin Masterclasses Series 3 with Craig Wright: Yes, human accountants are still needed

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Blockchain can record all information for future reference, but does it guarantee that the information is true? No, it is not. Imagine you want the world to trust a universal ledger of truth and use it for important operations like supply chains, logistics and accounting, how do you ensure that the data in that ledger is actually valid? That’s the opening introduction from Dr. Craig S. Wright in the third and final edition of The Bitcoin Masterclasses series, held this week in Zurich.

If you want to learn more, recordings of all previous Bitcoin Masterclass series workshops are available on CoinGeek’s YouTube channel.

“When we look at data, Bitcoin doesn’t solve everything by itself. One of the biggest problems in any system is ‘garbage in, garbage out.'” This is a problem with any blockchain – if I store data on a blockchain, it suddenly not right, says Dr. Wright.

Dr. Wright launches right into Ian Grigg’s concept of “Triple Entry Accounting” (TEA): that is, the checks and balances of traditional double entry, but with a third-party ledger keeping track of everything that goes through. However, even TEA does not guarantee truth in itself. Regardless of where and when data is recorded, there is a chance for accidental errors or deliberate corruption.

“There weren’t any big material frauds … there were just a lot of small frauds that turned into something material,” he says, giving an example from an audit case he once worked on.

He mentions physical gold storage. Sure, you can count gold bars, but you also need to be able to check if the bars are real or contain the claimed gold purity. Very detailed (and often invasive or time-consuming) checks are required.

“Bitcoin is not getting rid of accountants, contrary to popular belief,” says Dr. Wright.

Of course, not everything that happens in the world is electronic, which means that there are some problems that technology alone cannot solve. No matter what control system you create, people will find a way to game or work around it after a while. Even laws and regulations are only effective if they are followed (and enforced).

However, Bitcoin provides a more secure and verifiable way of tracking data, especially where that data may have been altered or duplicated. It also allows data to be “pseudonymized”, meaning that changes can be traced to an individual actor, but the link is not necessarily visible to everyone. This allows more detailed data to be collected, recorded and shared without the privacy concerns this would normally cause.

An electronic system also means it’s easier to build more frequent checks into the process or automate it, so human complacency isn’t an issue. It is more difficult for people to deliberately falsify registrations after being registered. Overall, it is easier to identify where a problem has occurred.

Dr. Wright refers to TQM (total quality management) and Six Sigma as earlier attempts to develop systems that reduce errors in business processes. These will continue to evolve as ideas and technologies improve. In terms of technologies, the hardware is also getting smaller and more affordable.

So while the human element is still necessary in any process, Bitcoin and the blockchain can still improve data security by streamlining the processes and making them more thorough but efficient. This also requires a massively scaling blockchain like Bitcoin SV (BSV).

Dr. Wright sets his Masterclass “students” to brainstorm some of these possibilities in the following workshop session. It’s educational, thought-provoking and worth watching The Bitcoin Masterclasses – it could provide a potentially valuable business idea.

See: How to use IPv6 and Bitcoin

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New to Bitcoin? Check out CoinGeeks Bitcoin for beginners section, the ultimate resource guide for learning more about Bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.