by Jason Meyers
On January 3, 2009 The Times UK published an article bearing the headline “Chancellor on Brink of Second Bailout for Banks”. At the time, it seemed like just another story covering the events of the financial crisis. The article, however, was the subject of an immutable inscription in the genesis block of the Bitcoin Blockchain which was launched on the same day.
Since the launch of Bitcoin, January 3 has become the New Year’s Day for Bitcoin core developers, fundamentalists, HODLers and those who sympathize with what has become the most powerful, effective and sustainable protest against the centralized financial system.
Since 2008, taxpayers have footed the bill for enough bailouts that would have otherwise funded the pension schemes of the world’s great great grandchildren. Time and time again, the People have pondered how such gross mismanagement can ever come to such a pass. Yet time and time again they head to the polls to elect the next set of politicians who promise reform that never comes. This is the heart of the January 3 Great Protest.
No credible solution was ever put forth before, or since that could prevent another catastrophe other than printing money which is inflationary on top of the taxes the People already pay.
Deeper hidden meaning?
Following the January 3 Great Protest, Tesco, Carillion, Thomas Cook, BHS and Patisserie Vallerie would become the poster children for spectacular accounting scandals that prompted the UK’s Financial Reporting Council to order the operational separation of audit practices at the largest accounting firms. The definition of insanity is doing the same thing over and over again and expecting a different result.
So what is the solution to keeping the Chancellor off the brink? The key is scientific, not political or regulatory. It lies in the consensus mechanism of the Bitcoin Blockchain and others that have launched since. Despite adoption by institutions and nations like EL Salvador and – contrary to popular belief by fundamentalists – a peer-to-peer electronic cash system may not save the world from financial Armageddon. The solution lies in the blockchains that have launched since the Great Protest.
Auditchain Labs AG, based in Zug, Switzerland is leading the development of an Ethereum based decentralized protocol that incentivises and enables accountants, CFOs, CFAs and other professionals to create, validate and own Process Control NFTs that automate immutable accounting, financial reporting, audit and analysis processes using a machine-readable global standard syntax on the Auditchain Protocol. It is designed to modernise assurance and financial state disclosure and add tamper proof precision and granularity for society’s 21st century open ledger based investor.
Auditchain Labs AG has also partnered with Digital Accountancy Media Limited which organises an annual accounting and technology conference that brings together 5,000 accountants, exhibitors, professionals and regulators.
Is printing money necessary?
Making monetary policy decisions involves reliance on data. A new form of money might be like treating cancer with a cough drop. Bitcoin is a symptom of a much deeper problem and its science holds the key to the integrity and reliability of the world’s business and financial information. This data is used by the world’s businesses, governments and central banks for analysis, publishing economic statistics, setting interest rates and making adjustments in monetary policy, (printing money).
The majority of the world’s business and financial information is filed by public and private enterprises with regulators in 50 major jurisdictions after an annual audit and a periodic review is completed. Traditional audit methodology only requires one accounting firm to take a sample of data across a sample of accounts and focuses on materiality. In other words, once a year, four accounting firms examine a small fraction of the transactions that comprise the world’s business and financial information and render an opinion if it is “fairly presented”.
This is certainly NOT how a blockchain works. Would you trust a blockchain with that architecture? On a blockchain, an army of miners or “validators” confirm 100% of all transactions. 100% of all account balances are proven all the way back to the genesis block. Disclosure is rendered in real time. Therein lies the key to new audit methodology, yet the £500 billion per year accounting and audit services profession has yet to adopt it for the betterment of society.
Wash, rinse, transform
Following the stock market crash of 1929, FDR called on the notorious speculator Joseph Kennedy to draft legislation to form the Securities Exchange Commission. The “Securities Acts” were designed to provide information through the mail about issuers of securities to investors so they could make informed investment decisions.
Other global disclosure frameworks followed. The Securities Acts were a legislative response to the speculative “rug pulls” of the 1920s, a common market manipulation that involved pumping and dumping large amounts of “pooled” shares (tokens) on the unsuspecting public (apes) who had little information (whitepaper) to rely on other than stockbrokers (Telegram). Sound familiar?
To move assurance, disclosure and compliance into the 21st century, Auditchain is solving the periodic data, integrity and reliability problem for investors in digital assets as well as public and private companies through the use of blockchain, non-fungible tokens “NFTs” and its network logic engine called “Pacioli”.
NFTs represent the accounting, reporting, audit and analysis controls and are created by accountants, CFAs and other professionals. Royalties are paid in AUDT which is the staking, settlement and governance token on the Auditchain Protocol. Each time the Process Control NFTs are used, the creators and the validators who provide assurance on the controls get paid.
If you are familiar with how a blockchain works, think of current regulatory disclosure frameworks as blockchains with one year block times and only four validators tentatively and conditionally validating a fraction of transactions on an asynchronous, unilateral basis. The Securities Acts adopted in 1933 and 1934 solved the disclosure problem for investors from the 1930s through the Great Protest.
The Auditchain Protocol will solve the conflict of singular, statistical, asynchronous audit and antiquated periodic disclosure in a twenty first century decentralised open ledger based investment society.
About the author
The Auditchain Protocol was conceived by its lead architect, Jason Meyers in response to the conclusion of a regulatory conflict over accounting in 2014 that ended his 25 year banking career. Jason took many companies public including Alexion Pharmaceuticals which was just acquired by Astrazeneca for USD$41 Billion. Jason claims that he missed the crypto boom of the roaring 20s as the result of his focus on the Auditchain Protocol. He has a strong belief that the “Joe Kennedy” type activities that occur in crypto could kill innovation. He strongly believes the crypto space needs to find a way to regulate itself, or be subjected to politically imposed and misguided regulations that may one day make us all wonder what a good idea blockchain could have been.