By Jessica Salerno, OSCPA senior content manager
CPAs increasingly see blockchain as a valuable business tool instead of just a buzzword, one expert says.
“Even if on your everyday Tuesday afternoon blockchain is not a topic of active conversation, it is actually becoming more and more part of the overall business conversation than you might otherwise think,” said Sean Stein Smith, CPA, CGMA, assistant professor at Lehman College in New York. “And as a direct offshoot of that the blockchain space has evolved quite a bit.”
Smith joined The State of Business podcast this week to discuss how the pandemic is impacting blockchain, what to expect from blockchain in 2021 and more. And blockchain, like everything else, has been impacted by the coronavirus pandemic in 2020.
“Blockchain and cryptocurrency have almost been turbocharged during 2020,” he said, “as entities and individuals are trying to find the tools and the applications to get data out the door to be able to analyze it and store it in a manner that is safe but accessible.”
In the accounting profession there is a growing understanding of how impactful blockchain can be, he said. Although this is progress, like with any technology, there are still some misconceptions.
Smith said some still have the misunderstanding that after implementing blockchain all the information that's passed back and forth between entities is accurate and unable to be hacked.
“The blockchain consensus protocol is not checking the accuracy of the information in those blocks. What it is checking is that those blocks are being added in accordance to the rules of the blockchain,” he said. “It might seem like a nuanced difference, but ultimately, there can be data uploaded onto the blockchain that is added correctly and appropriately and actually looks good but is actually incorrect information. So, it's still really important to have good controls over the data input points and the output points.”
Therefore, it’s crucial for firms to understand the technology when working with blockchain and not just to understand it at a surface level, Smith said.
“This is an opportunity for the firms and the individuals working at those firms who are proactive and educated to keep themselves up to date to answer questions and help their clients understand what questions to ask,” he said. “And understand how those questions are going to impact how blockchain is actually onboarded at their firm.”