Blockchain for audit
The building blocks of cryptocurrency
Magnus Carter, finance author explores how blockchains and blockchain data are used for accounting and auditing purposes
oday, everyone in the digital world has heard about cryptocurrency in some form or another. Whether it is from the people that are making massive amounts of money investing in high-end markets, all the way down to the kiosks you see in your local grocery stores.
Magnus Carter, author
The world is changing more rapidly than ever and your options to invest in are no different. This all too new form of investing has mesmerised the younger generation, while it horrifies the older ones. Each type of cryptocurrency has its own unique markers that make it different from the next. But the technology and concepts stay the same. Some of those concepts are data blocks, blockchains, market and marketplaces...
We are going to explore how blockchains and blockchain data are used for accounting and auditing purposes. These technologies are a key part of keeping track of the available shares, sales, purchases and price per share. In other words, a fancy ledger that is encrypted and can be used to audit what the person has done. This tech has simplified how business is done on a user basis. And by this, I mean each blockchain is unique and cannot be duplicated.
Above not being able to be duplicated, anyone in the world can trade on the same platform or marketplace. As we all know crypto currencies are intangible objects that live in cyberspace. So that means someone in another country can trade in the same marketplace as you are. Also, most countries do not have age restrictions for this type of trading. (Please check with your current laws before trading). The only difference is the money that is used for the purchase. There are conversions that need to be done to purchase any type of crypto. This is also recorded in the blockchain of how much physical currency is used to trade in the marketplace.
The above information is only a fraction of what the blockchain technology can do. And how helpful it will be in the future of accounting and investing. Another fundamental item that blockchain technology does is allow someone such as an advisor or accountant to audit all transactions for the investor.
The auditing portion is definitely needed so an investor can see if there is a profit or loss in their trading. Now this is where the corporations and investors alike can use this as a benefit. It is a great way to keep records for filing taxes at the end of the year. In the US, any gains in crypto trading are being taxed as property. Other countries are figuring out how to tax these gains. Please check with your local Certified Professional Accountant or financial advisor.
As people are being thrown into the digital world of investing there are many questions. And not enough information to answer them. Now this is where the CPA’s and financial advisors come into play. They need to stay up to date with all the changes that are happening in the crypto world. This includes taxes, gains, losses, new currencies etc. If you ask any one of these professionals what makes a healthy and profitable portfolio, 9 out of 10 will say diversification.
Diversified investments allow for risks to be taken and gains to happen at the same time. Crypto is just one more option that can be used to contribute to another place where investments can be made. With investing in crypto there are a plethora of options to invest in. There are tokens, coin based, NFT’s and the list goes on. And the best part is that the blockchain technology can keep track of all the digital investments for auditing and tax purposes.
Investing in crypto is an option for young and old alike. A way out of the normal types of investing options where there are great wins and great losses. One thing that is on point when choosing this as an option to diversify is the blockchain and block data used to record and audit transactions that pertain to individual investors and corporate investments. Not only is it recorded and can be used for auditing, but this technology is also heavily encrypted which allows for amazing security.
The security aspect of the technology will give some peace of mind knowing that the financial records are secure. Every choice we make is a gamble, this is no different. There are many unknowns out there but that is what makes investing in crypto and other types of investments such a rush when it comes to making money. So, take the time with the research and make good decisions.
*Other books by Magnus Carter: Making More Money for YOU! Series: Mutual Fund Investing on a Budget for Beginners and Decrypting Cryptocurrency - Riding the Data Path to Financial Freedom