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A Modern Approach to Record Keeping – Data on the Blockchain

Modern Bookkeeping

Technological innovations tend to threaten careers. Some people believe that artificial intelligence and machine learning will put humans out of work.

In some industries, it could be cheaper and more efficient to have a program handle the tasks that a human usually handles. Careers that involve working with numbers, making calculations, recording information, and hosting/distributing content can easily be done by robots.

Implications of Blockchain in Business

If it is more cost-effective and the level of production increases when a company uses machines to complete tasks, then the company might consider adding more machines and keeping fewer human workers. Machines are usually more accurate than humans, and having a machine complete a task for you diminishes the percentage of human error; blockchain technologies have a positive outlook in a wide range of industries for that reason. At Consensus 2018, Frederick Smith, the CEO of Fedex, said “We’re quite confident that [blockchain] has big, big implications in supply chain, transportation and logistics, In the area where FedEx makes its living, this could be a big deal.” In industries like the supply-chain and freight industry, blockchain technologies give businesses the ability to create a transparent ledger over a cryptographically secure platform that is easy to audit.

The supply chain industry can use a blockchain to track items by assigning an address to an item and documenting its journey from its point of origin to the location it ends up at. Companies like Walmart have utilized blockchain technologies in this way to trace food like pork and mangoes from the farm to the shelves. The blockchain provides a solution to the transparency issue the supply chain and freight industries experience; items usually touch a number of hands before they end up in their final destination; and the current system does not allow for items to be easily traced throughout their journey.

Defining A Public Ledger System

On the blockchain, a public record is created when a transaction is added to a block. The item can be traced by all parties that know the item’s address. Nodes— which can be thought of as transaction verifiers— only verify transactions that are valid. The validity of a transaction depends on if the network is able to agree that the broadcasted transaction they received actually happened. This simplifies the auditing process because nodes only verify transactions that the entire network agrees are valid; this should create an honest ledger of the entire transaction history.

banks are already working on proof-of-concepts of distributed ledger solutions

Industries that store records, transfer records, and validate credentials, can benefit from switching their record management system to the blockchain. Industries like health and medicine where patient records are often transferred from one hospital to another can be simplified if record keeping was brought to the blockchain. Technologies like Github, Google Drive, and DropBox were able to help record keepers like hospitals and law firms go paperless, but tracking and transfering files still remains an issue. There are dozens of electronic file formats and not all are interoperable between operating systems and reading softwares. If a set of companies in an industry uses a public blockchain for their record management duties like RecordsKeeper’s blockchain, then a company could have an interoperable records management system that will cut costs.

Traditional Data Storage Vulnerabilities

A problem with the traditional methods of storing data is that storing sensitive information like financial, medical, and government records in a centralized location like a database makes a hacker’s life easier; all a hacker has to do is breach the one location where the data is stored to steal everybody’s information. On a blockchain, the data is decentralized over all of the nodes in the network. When one individual interacts with another individual, a message will be broadcast to the blockchain network, everyone on the network then receives a message that updates their system to the current state of all the addresses in the network. Because the data isn’t safeguarded in a central location, but rather every user has a copy of what happened, it is difficult for a hacker to breach a decentralized system because it is not clear where they should attack to obtain information.

blockchain

Streamlining Record Keeping on Blockchain

Instead of paying the hefty fees that come with obtaining medical and legal records, records can be uploaded and transferred over the RecordsKeeper blockchain for 0.1 XRK/Kbyte (20,000 XRK = 1 BTC). Handling record management over the blockchain provides proof of authenticity and proof of existence for all parties interested in the record. When a record is uploaded to the blockchain, it is assigned a unique hash (string of numbers/letters). The original document is uploaded from the origin and assigned this hash, if any changes are made to the document, then the hash assigned to the document will differ from the original hash. This allows all parties to know whether they are dealing with authentic or edited/forged documents.

When the record is uploaded to the blockchain, it becomes searchable and will have a timestamp. The time-stamped transaction provides proof that something happened over the blockchain between two addresses. Businesses can use the blockchain in this way to simplify ownership rights transfers. Ownership rights can easily be accessed and stored on a blockchain opposed to calling several government offices in a quest to obtain all the documents needed to transfer ownership rights.

Technologically Advance or Get Left Behind

Blockchain technologies go hand in hand with record keeping and record management. By nature, the blockchain is a public ledger that does not accept any invalid transactions in its record. In industries like accounting, law, medicine, freight, supply chain, and property, unique addresses assigned to documents, items, property, and transactions can speed up the process of transferring information and serve as a reliable record that is easy to search and audit.

Technological innovations like the blockchain have the ability to displace traditional methods, processes, and careers the same way artificial intelligence and machine learning do. Market giants like FedEx and Walmart have been incorporating blockchain into their strategies because they know that blockchain technologies have the ability to optimize business processes if applied correctly.

FedEx’s CIO Rob Carter told the Wall Street Journal that, “The consequences of investing in this aren’t very high, [but] the consequences of not investing are extremely high.”

If a business wants to stay competitive and not get left behind, it is necessary for some sectors to explore blockchain technologies.

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