This is Ryan here. I wanted to share with all of you about something that I have been thinking about a lot recently.
For those of you who do not know me, in addition to investing in cryptocurrency, I also invest in stocks.
The process I use to evaluate a new tokens is similar to the process I use to evaluate a new stock. Often, these stocks have many investment analysts covering them - and as long as I can get my hands on these reports, I am able to form a view about each potential investment pretty quickly. (Thank you, my banker friends!)
A big part of the process is reading annual reports. Annual reports are lengthy documents, often hundreds of pages long, and are produced once a year. Even shorter reports are only produced quarterly. Ever since public accountability became important about five decades ago, companies have been preparing quarterly reports and sending them to investors.
By the time the auditors have verified that the information in these quarterly reports is 'true and fair', it is often 3 or 4 weeks past the end of the quarter. So for a quarter ending on 31 March, I might get to read a quarterly update from a company only sometime in April.
Given that people in the financial sector have never really questioned this, it remains the norm even today. There is always a lag between the time information becomes available and when it is disseminated to the public.
Using a system called triple entry accounting, companies will now have the ability to produce a digital receipt every time a transaction happens (Click to Tweet) - this receipt will be time stamped, immutable and available to all members who have access to this blockchain. The result of this is that various stakeholders will have the ability to audit, verify and search the accounting records of companies in real time.
No more quarterly reports and four-week lags between the preparation and publishing of accounts.
Of course, it remains to be seen in what form companies will allow access to such a system - no company will want the world to know about every single transaction that gets recorded in its books - but a system like this will completely change the way investors, managers, and regulators use and respond to accounting information.
This is incredibly fascinating, isn't it?
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