We all talk about Blockchain, DLT (Distributed LEDGER Technologies), Wallet, and many other terms that refer to this new and destabilizing technology, but do we know exactly the concept that follows?
To be able to introduce the topic, we need to take a small step back, let's go back to Mesopotamia alongside a Sumerian accountant.
With his faithful tablet and cuneiform inscriptions he had full control over the credits and debts of various subjects.
This is the first and simplest form of accounting that has come down to the present day, with the simple batch name.
Gradually the progress and development of the market has forced humans to make improvements in these recordings.
We have to wait for the renaissance when Genoese merchants and Florentine bankers introduce debit / credit or Costs / Revenues.
Once completed, these registers are then endorsed by higher bodies such as notaries, auditors, who certify their veracity
Thus was born what is still used today and takes the name of double entry, a subject that all accountants and auditors know as very complex, even if fascinating.
Clearly, the certifying bodies may not be able to demonstrate the reliability of these writings, therefore they rely on the correctness of the editors.
In fact, systems have been set up to have a cross-check to confirm the correctness of the data, but, as we know human nature is unpredictable, the control systems can also be tampered with.
In fact, if we want a result that conflicts with the variables entered, it is sufficient to modify the input variables and we will get the desired answer.
In this regard, the Japanese Yuji Ijiri intervenes in 1989, about 600 years later.
He added a third party made of a public register, where all the transactions both debit and credit are reported as in the image below.
At first glance it could be an obvious thought and without implications, as long as a team known by the name of Satoshi Nakamoto decides to implement a digital transposition.
We are in 2009: nineteen years later.
This development team, through Cryptography, makes Yuji's lighting operational and a great precursor.
But let's see how it works exactly.
Let's take a Wallet, what is a digital wallet; during the registration operations, a Recovery Phrase is created: 12 or 24 words (depending on the Wallet) chosen by the procedure.
These are words that at first glance are meaningless, but that the Wallet algorithm knows what it is, in fact it immediately creates a 32-character alphanumeric code.
This is my electronic key, unique, encrypted and irreversible that protects my identity and gives me the opportunity to interact with everyone, remaining anonymous (Pillar of the Cypherpunk philosophy, here some information)
This code is non-reversible since it is recovered from the sentence, while the sentence cannot be traced from the code (elliptic asymmetry).
Therefore it is vital to keep it, otherwise everything in the account is lost.
Attention, anonymity not for law enforcement, in fact, registration must follow the KYC (Know Your Customer) rules.
With this address, I move around the network, I buy, sell, vote, download music.
The operations are saved, with date and time (the timestamp, here [link to the article] I talk about it), in a public and immutable register.
Everyone can see my "movements" following my public key, but no one knows who I am until I decide.
One more thing: this register belongs to no one in particular, and mine, ours, yours, theirs.
In a word, it is "for everyone", all those who have an encrypted digital identity which is that and only that: it cannot be duplicated.
Do you understand why I called the Blockchain the earthquake of classical accounting?
In this way we are faced with an unparalleled upheaval.
The certification and control bodies disappear, as this register, being public, cannot be modified and is self-managed.
All company accounting becomes certified by this public and immutable register.
But there is the usual "But" in between.
Who can certify that the transactions written on the register are reliable?
The answer is given to us by the Ethereum Blockchain which established the Smart Contracts: they define the rules of truthfulness of the data.
If they are respected, the data is considered true and therefore it is recorded.
Once again, this technology has shown itself to be at the forefront with the aim of simplifying and lightening certain operations.
The same operations that, today, are managed by banks at a high price!
