Business & Economy Startups Could cryptocurrency prevent accounting frauds?

Could cryptocurrency prevent accounting frauds?




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At the end of the day, it all boils down to transparency

Cryptocurrencies like Bitcoin have seized the world’s attention time and time again by dismissing their leading critics and continuing to power on despite predictions that they would tumble.

Despite the enduring nature of these digital tokens, much of the buzz that once surrounded their impressive rise to prominence has died away.

This is an unfortunate development, especially since it’s growing increasingly clear that cryptocurrencies are just getting started when it comes to cybersecurity and crime fighting.

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So, could cryptocurrency prevent accounting fraud in business?

Here’s a breakdown of how cryptocurrencies and their underlying technology stand a chance at reshaping the anti-fraud campaigns of the future.

Cryptocurrencies are going mainstream

Despite the widespread predictions that leading cryptocurrencies like Bitcoin were destined to collapse, today’s cryptocurrency market is as vibrant as ever.

As a matter of fact, cryptocurrencies are going so mainstream that an increasingly large number of banks, companies, and other financial and governmental institutions are beginning to express interest in them.

Perhaps the most important consequence of cryptocurrencies becoming more popular is that they’ve become a powerful asset for potential fraudsters and criminals who are looking to cover their financial tracks.

With so many ne’er-do-wells leveraging cryptocurrencies for illicit purposes, it’s only logical that defenders of the technology have risen up to use it for good.

Around the market, cryptocurrencies and the underlying blockchain technology that has been used for fraud prevention in a wide number of cases already.

We’re only just getting started too, as we can expect to see additional cases of relying on blockchain for fraud prevention as the technology continues to advance, proliferate, and become cheaper to master.

From thwarting identity thieves to preventing fraud in supply chains, the large list of industry use cases when it comes to using blockchain fighting fraud gives us much to be hopeful for.

Cryptocurrencies won’t be able to root out fraud entirely of course — no technology will ever be capable of eliminating fraud outright.

However, the immense promise of these digital tokens and their decentralised ledger technology makes them attractive investment options for IT specialists.

Creating secure accounting systems

For cryptocurrencies to become widely relied upon to fight fraud, they’ll need to be able to furnish secure accounting systems.

There’s good news on that front, as cryptocurrencies and the underlying blockchain tech that powers them will be used to create tamper-proof information ecosystems that are much harder to penetrate than traditional alternatives.

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The public ledgers that sprouted up to encourage the trading of cryptocurrencies like Bitcoin and Ethereum will soon morph into cryptographically-sealed information hubs where accountants can safely keep their homework.

As blockchain continues to gain prominence as a fraud-fighting tool, expect leading cryptocurrency marketers who use VPNs in Singapore to begin championing the technology as an anti-fraud asset in order to bolster the overall reputation of the crypto community.

Cryptocurrencies can only come to prevent accounting fraud in business if they can deliver on the promise of a more transparent and secure financial future, however.

At the end of the day, it will all come down to transparency.

Financial fraud statistics inform us that the vast majority of fraud perpetrators are employers of defrauded companies. So, cryptocurrency proponents can hold up blockchain as a useful tool for making the marketplace more transparent and those handling crucial information more accountable.

With payroll fraud continuing to hammer small businesses everywhere, we’ll soon see everyday entrepreneurs making use of this technology alongside corporate giants who have realised its potential long ago.

With all of the transactions of a cryptocurrency taking place on a public ledger, such things as payroll fraud and workplace deceit will become veritable things of the past. The immense transparency offered by blockchain is simply unparalleled, as it ensures that no one individual can delete official records in an untraceable fashion.

While some continue to assert that the dizzying nature of cryptocurrencies makes them unsuitable for transparency, there are already some examples proving that major cryptocurrencies can still hold rulebreakers accountable.

The market is already packed with examples

The way that Tether mercilessly tracked down and identified hackers who illicitly made off with stolen digital tokens illustrates that this technology is going to be a boon when it comes to accountability.

Also Read: Indonesia healthtech Halodoc raises US$65M funding from UOB Venture

Long gone are the days of tech-savvy accountants cleverly hiding their tracks, as modern cryptocurrency technology makes it impossible for them to alter financial records without leaving a trace.

Even those accountants deeply unfamiliar with IT matters should be able to appreciate the impressive way that cryptocurrency technology has enabled us to track down and bring to justice to those stealing paychecks.

Finally, the use of smart contracts through blockchain technology stands to upend traditional understandings of rules-based transactions.

In the future, the specifics of financial agreements may simply be hashed out by clever AI programs that work at a pace far in excess of what humans are capable of.

In other words, you can thank cryptocurrencies and blockchain for helping to crack down on contract fraud.

Blockchain technology will continue to advance in fits and starts, but the future is clearly visible, and it’s going to be dominated by tokens like Ethereum and Bitcoin.

Cryptocurrencies may still be establishing themselves, but there are plenty of reasons to believe these digital tokens will be vitally important tools for when it comes to fighting future fraudsters.

Image Credits: andreypopov

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