The Smart Contract Powered Triple Entry Accounting System

Dr. Christian Lundkvist

Jeff Scott Ward

TEAM

Christian started his career as a mathematician doing research in Algebraic Geometry, followed by a deep dive into quantitative finance developing and implementing derivatives pricing models at Bloomberg.

Jeff has worked at the New York Stock Exchange, an OTC Bitcoin trading firm and now advocates for the JavaScript/Front-end community tools to be productive in building the Web 3.0 internet economy.

Double Entry Accounting

Each counter-party of a transaction will have a "Debit" and a "Credit" on their own books to reduce errors.

Alice buys a hamburger for 10 Ether from Bob.

------------------------------------------------------------
 

Bob adds 10 Ether to his Assets Account

Bob subtracts 10 Ether to his Income Account
 

Alice adds 10 Ether to her Expenses Account

Alice subtracts 10 Ether to her Assets Account

------------------------------------------------------------

If the books don't match, who has the correct set of numbers?
 

Assets:CashRegister 

-10Ξ

+10Ξ

Alice

Bob

Income:Sale 

Expenses:Food 

-10Ξ

+10Ξ

Assets:Cash 

Triple Entry Accounting

The transaction uses a smart contract that acts as a signed receipt that is linked from the individual ledgers of each counter-party.

Using Ethereum, the payment logic (in code), the pointer to the supporting documentation, and the receipt can all be one smart contract.

Proposed by Ian Grigg (the modern version)
using financial cryptography.

QmTJx4cXhPquSFJGY9

Alice

Bob

Link: 0x77e78945b7c84665ddfafe8

ETH Contract

Address: 

Product: Hamburger

Price: 10 ETH

Seller: Bob

Buyer: Alice
Bob Signature:
Alice Signature:

<menu>

<food>

<name>Hamburger</name>

<description>

A nice juicy burger with cheese, lettuce, tomato, pickles, onions.

</description>

<calories>650</calories>
<price>10ETH</price>

<rating>5 stars</rating>

</food>

<food>

</menu>

0x77e78945b7c84665ddfafe8

Link: 0x77e78945b7c84665ddfafe8

Emerging web-based standard for structured financial data. Already required by the US Gov.
 

Compliance - Auditors can ingest data easily! 

Templates/Customization - Pick or create a schema

Web Friendly - XML-based = Machine readable

All together now - Real-time auditing realized!

Data Integrity + Security

Data Storage + Distribution

Data Standards + Reporting

"Business Process Assembly Line"

@jeffscottward

jeffscottward@consensys.net

christian.lundkvist@consensys.net

@chrislundkvist

Thank you!

http://BALANC3.net