Ledger as a service by culgin

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money · @culgin · (edited)
$12.41
Ledger as a service
So we survived 2 hardforks (HF21 + HF22) in quick succession. HF22 was done to resolve a bug where huge accounts are unable to delegate. [I am glad that it is now resolved](https://steempeak.com/hf22/@steemitblog/hardfork-22-live) but at the same time finding it weird as to why it was not detected during testing. Good job nonetheless to the developers and witnesses who detected the issue and resolved it promptly. Hopefully as the platform continues to run smoothly, STEEM price will bottom out and climb back steadily.

---

#### Ledgers

<center>![image.png](https://files.steempeak.com/file/steempeak/culgin/HcKLhDzn-image.png)</center>
*[Source](https://pixabay.com/photos/ledger-accounting-business-money-1428230/)*

Anyway, I am not going to discuss HF22 today. Instead, I am going to talk about ledgers. A ledger is defined as ***"A book in which the monetary transactions of a business are posted in the form of debits and credits"***. Ledgers are used in an activity called [bookkeeping](https://en.wikipedia.org/wiki/Bookkeeping) which allows people to keep track of financial transactions. The idea of bookkeeping has been around since 2600 BCE. Before the proliferation of personal computers, ledgers were usually maintained in the form of pen-and-paper. Even till today, we still see many small businesses using physical pen-and-paper ledgers. 

#### Physical to digital

Ever since Microsoft popularized the use of the "Office Software Suite", more businesses started to adopt digital forms of ledgers. Microsoft Excel made it easy to maintain a simple form of digital ledgers. Gradually, technologies evolve and software developed for accounting started to emerge. Such software ranges from simple locally installed tools to large scale enterprise resource planning (ERP) systems. With cloud computing becoming the norm these days, Software-as-a-Service account tools are also getting increasingly popular.

#### Main motivations to keep ledgers

Why do companies keep ledgers? It is granted that being able to know what are the transactions and where exactly the funds are flowing are useful information for making management decisions. However, the most important reason for most companies to keep their books is audit and compliance. This is especially so for public-listed companies.

Serving quarterly and annual financial reports to the shareholders is a requirement for companies to stay listed. Every year, companies will be audited on their financial records. That is the main reason why businesses are investing heavily on software and systems to help them keep track of financial transactions. Having these tools not only simplify the daily operations, it also make it less error-prone and auditing easier.

#### Audits are still not cheap

<center>![image.png](https://files.steempeak.com/file/steempeak/culgin/Nl7khPPo-image.png)</center>

According to [this site](https://www.softwareadvice.com/resources/erp-software-pricing/), the cost of maintaining a ERP or accounting system ranges from $260k to $430k annually for a company with over 100 users. Despite maintaining large and sophisticated systems performing audits is still not easy. [In 2018, the big four audit firms raked in almost US$56 billions of revenue just from their audit and assurance functions](https://www.statista.com/statistics/250935/big-four-accounting-firms-breakdown-of-revenues/). That is not inclusive of revenues of other small audit firms.

Why do audits still cost so much even with technological advancements and substantial spending on accounting tools/systems? I think it is largely because a relative lack of transparency in these centralized and corporate owned systems. Having worked in one of the big fours before, an audit exercise not only needs to ascertain the integrity of the transactions, there are still many other checks required on the processes and on the system itself.

#### Centralized to decentralized?

<center>![image.png](https://files.steempeak.com/file/steempeak/culgin/1aoCJnxv-image.png)</center>
*[Source](https://pixabay.com/illustrations/blockchain-block-chain-group-3508589/)*

I have a random thought which may be too idealistic. But what if all companies leverages decentralized ledgers (public blockchains) to keep track of financial transactions? Public blockchains are essentially decentralized ledger-as-a-service. Anybody can make use of public blockchains as a ledger to keep track of their transactions. Such transactions are transparent and auditable by the public, by you and me. Under such a model, system maintenance and audit costs will be lowered. Auditors can safely assume that transactions committed to the blockchain can never be tampered with. Hence, they just need to audit the process of committing those transactions.

Having the transactions on public ledgers also forge more trust between shareholders and companies. The [Enron scandal](https://en.wikipedia.org/wiki/Enron_scandal) will become a thing of the past. This not only mean a shift from centralized ledgers to decentralized ledgers. It also mean a shift from centralized audits to decentralized audits. Radical transparency!

When this day comes, if it ever comes, which do you think will be blockchain of choice? Do share your thoughts and thanks for reading!

---

#### The "Raise to 50" Initiative

Under 50 SP and finding it hard to do much on this platform? I might just be able to raise your SP to 50. [Check this post to find out more](https://steempeak.com/raiseto50/@culgin/announcing-the-raise-to-50-initiative)!

---

This article is created on the Steem blockchain. Check this series of posts to learn more about writing on an immutable and censorship-resistant content platform:
- [What is Steem? - My Interpretation](https://steempeak.com/steem/@culgin/what-is-steem-my-interpretation)
- [Steem Thoughts - Traditional Apps vs Steem Apps](https://steempeak.com/steem/@culgin/steem-thoughts---traditional-apps-vs-steem-apps)
- [Steem Thoughts - A Fat or Thin Protocol?](https://steempeak.com/@culgin/steem-thoughts---is-steem-a-fat-protocol-or-a-thin-protocol)
- [Steem Thoughts - There is Inequitable Value Between Users and Apps](https://steempeak.com/@culgin/steem-thoughts---inequitable-value-between-users-and-apps)
- [Make my votes count! Use Dustsweeper!](https://steempeak.com/@culgin/make-my-votes-count-use-dustsweeper)
πŸ‘  , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , and 660 others
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@partiko · 
Thank you so much for participating in the Partiko Delegation Plan Round 1! We really appreciate your support! As part of the delegation benefits, we just gave you a 3.00% upvote! Together, let’s change the world!
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@litguru · 
Thank you for this clear and thorough explanation of ledgers and their importance. I am new to steemit and cryptocurrency in general, so it's good to see someone taking the time to help us newbies understand the core concepts.
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@culgin · 
Thanks for dropping by and welcome to Steem! This post is not related to Steem though. This platform requires quite a bit of learning to get started with. However, once you learn it, you will more likely to stick with it :)

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@niallon11 · 
Most large business don't want to be transparent and open for audits. That would lower their profits and hurt the top guys bonuses. We all know that a lot of stuff is done behind the scenes and not all of it legitimate.
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@culgin · 
Indeed. That's why this idea is too idealistic. Haha.. but it will be nice to have such radical transparency

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@steem-ua · 
#### Hi @culgin!

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Your **UA** account score is currently 4.016 which ranks you at **#3960** across all Steem accounts.
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@lanzjoseg · 
Hi friend @culgin,

Before making any comments regarding your publication, I must mention that when I saw the photo of the accounting book, there was a pleasant memory of my early years at the university when I study Public Accounting.

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

Well, everything you say about the accounting area is like that.

Well, everything you say about the accounting area is like that.
Another thing where you are very right and I can certify it is the great help that Microsoft Excel generated for many companies and much more for the accounting area since in a file you could carry many sheets that in turn made reference to the accounting may or link it with another file that was the newspaper, in this way was that I improve, the times.


Of course there are still many companies that carry the manual system.


I share your idealistic thinking
> But what if all companies leverages decentralized ledgers (public blockchains) to keep track of financial transactions? Public blockchains are essentially decentralized ledger-as-a-service. Anybody can make use of public blockchains as a ledger to keep track of their transactions. Such transactions are transparent and auditable by the public, by you and me. Under such a model, system maintenance and audit costs will be lowered. Auditors can safely assume that transactions committed to the blockchain can never be tampered with. Hence, they just need to audit the process of committing those transactions.


Of course, this would help the company that applies it and the accountants to us on a large scale, one of the best things the blockchain has is that:
What is written in the block, written remains, and you cannot delete. In that sense every transaction will be there forever.


> When this day comes, if it ever comes, which do you think will be blockchain of choice? Do share your thoughts and thanks for reading!



Without any doubt unless something different comes out of EOS I think that will be the best. I repeat unless in the future something better comes out.


Greetings friend. A big hug from Venezuela.
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@culgin · 
Thanks for the comment. I agree that EOS is a pretty decent platform to use

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@devann · 
Hi @culgin

Although an excellent idea, I wonder how many companies are willing to expose their ledgers to the public, allowing anyone and everyone to "audit" their books as and when they like? 

Unless a company is squeaky clean it wouldn't dare to be so transparent.
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@culgin · 
Certainly not many at this point in time. But when smart contracts are adopted more widely in the future, I think there will be a chance for a least a few companies to be that transparent

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@devann · 
Perhaps a time will come in future when companies that are not on blockchain will be looked up with suspicion as companies that have something to hide.
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@machnbirdsparo · 
>Public blockchains are essentially decentralized ledger-as-a-service.

On target article. Really, we need more of this discussion.

Allow me a more revolutionary opinion.

Ledger-as-a-program!
As-a-service alludes to a service provider, that is, a centralized axis of control.

In fact, dblockchains (imagine if we need to define decentralized blockchains :( ) with cryptocurrencies as valuations, we can do away with "as-a" and instead

* ledgers-enabled-by-"insert_program_name_here" - for connectivity through smart contracts

* ledgers-on-"insert_blockchain_name_here" - for large corporations

In case you are not a programmer, "_" has been culturally used by computer scientists to represent a space in a name, while "-" tends to represent distinction. :) so the kids would write 

#!ledger_on_STEEM-add_avatar-culgin

I am not even a script kitty, just someone who built a few modest interactive websites with a bit of javascript and php years ago. My take on it all.
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@culgin · 
You went ahead of me. Haha.. I am planning to write about Contract-as-a-Service next, which is about smart contracts. It's much powerful than ledger as a service :)
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@crypto.piotr · 
hi @culgin

I didn't have a chance to comment on your post earlier on (simply because of the fact that STEEM blockchain was down so I took few days off and allowed my eyes to rest a bit :)

> at the same time finding it weird as to why it was not detected during testing.

I'm wondering how many users/investors would consider those bugs as a reason to get rid of their steem tokens. Right now binance and other exchanges suspended deposits and withdrawals so price isn't moving much. Let's see what will happen once it's all back to normal. 

Anyway I'm glad we're not discussing HF22 any more. So much have been said already :)

Solid read. It's always great to refresh our knowledge about ledgers. I did wonder many times what are benefits of decentralized ladger over centralized one. Thx for sharing your thoughts.

> But what if all companies leverages decentralized ledgers

I'm just not sure if it's worth it. Remember that it would mean changing software, re-educating people, testing new technology and making tons of costly mistakes. I think that it's not solution for every business.

Strong upvote on the way
Piotr
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