When people say “I have no interest in Bitcoin but the blockchain tech behind it is useful”. As a futurist accountant, that's like hearing “I’d like to use Xero but don’t need to learn accounting” 😏 We need to understand both. Maryna Kovalenko (Kova Tax) and Electra Frost (Digital Playhouse Foundation) got raw and real about Bitcoin at the Institute of Public Accountants' Noosa Conference, presenting on Crypto Technologies in SMEs & Accounting Practice.
At the IPA's Centenary Event on the Sunshine Coast in Qld, on17 March Electra and Maryna encouraged practitioners to be on the lookout for clients experimenting with Web3 business models and Lightning micropayments. 🗲🗲
Accountants' clients are beginning to adopt Bitcoin and Crypto Technologies such as NFTs and DeFi within their companies. Some are experimenting with new ways to create value with Web3 business models.
Many of us can work out clients' crypto tax obligations by now, but most of us aren't prepared to provide bookkeeping, business advisory and accounting services.
As accountants, rather than turning away business opportunities we should embrace these income earning opportunities to upskill our staff for the digital assets revolution. We are nimble entrepreneurs - we get ahead of the competition! Blockchain is a Governance and Accounting Technology. So accountants have to lead the way. Who would disagree? But to understand Blockchain, and how decentralisation creates value...
...we must first study Bitcoin. That’s how it all kicked off. There is so much to understand about Bitcoin - the philosophy, economics and technology - before we can comprehend the advantages of using decentralised blockchain applications and web3. Bitcoiners also talk about separating Money from the State, which sounds like a radical idea and makes us think about what money really is.
We asked a room full of accountants: “What is money?” .... and got some basic answers like ‘means of exchange’, ‘how we measure wealth’. But what is money, REALLY? Before bitcoin, virtually no one asked this. Bitcoin is hard to understand because money is hard to understand. But that is because few people have ever questioned money at a fundamental level — what it is, and what makes it valuable.
The fact that Bitcoin requires work, which is energy intensive, leads us to understand money in terms of energy and why Bitcoin mining is merging with the renewable sustainable energy sector. We talked about how Bitcoin derives more value than Fiat or Gold - through its durability, portability, divisibility, fungibility, scarcity, and acceptability - to be potentially treated as money. Sound money. HARD money. Its Satoshi denominations and fixed supply ensure it can support adoption by billions of people and no one can print more of it. Maryna shared her story of using Bitcoin in Ukraine when access to financial services was limited. We talked about how government issued Central Bank Digital Currencies are completely different to decentralised crypto and looked at Australia’s CBDC pilot against a global CBDC tracker map. We explained how an apolitical, permissionless global form of currency is very appealing in times of financial turmoil and with SME businesses expanding their global reach.
All money will soon be digital, after all, so it will just be a choice between centralised or decentralised. How familiar are you with the differences and likely use cases for both? We predict that the most competitive SME businesses will use both. How many clients would an accountant lose if they didn't understand and support those clients? With the Bitcoin Lightning open network being virtually free, and offering vastly greater transaction throughput compared to credit cards, plus with advances in Web3 and AI... the clock is ticking for businesses to get crypto-ready and future-proof… and accountants need to be ready. That brought us to the importance of accounting staff training and retention. Electra was reminded of job applicants asking in 2013 if her firm used cloud accounting, because they wanted to jump ship to launch their careers with a more progressive firm. With an already critical skills shortage and automation of many accounting and tax preparation functions, accounting practices should start thinking about Bitcoin and blockchain education as part of their ethics and risk management strategy. Practical steps to keep up with the crypto economy:
The next generation of accountants are crypto-curious and are noticing current trends. Accounting practice managers shouldn't just make them do all the tax returns for crypto traders. Capitalise on their curiosity and lay foundations of a blockchain business niche for the firm. Enrolling them in Diplomas of Applied Blockchain (merging AI and Machine Learning) can help them to lead your firm into future business advisory. Talk to Electra - Education Manager at Blockchain Academy International - where accountants, amongst other professionals, are upskilling with accredited Applied Blockchain Diplomas. The courses are about APPLYING blockchain, not coding. The learning outcomes equip business professionals to plan and implement blockchain transformation across their organisations. The program is project based, so your assessment work can be based on problems you would like to solve for your own industry, or your clients' industries. Electra supports and coaches students throughout the duration of their applied blockchain programs and Electra can be contacted here for information about enrolling. The School of Bitcoin, a Digital Playhouse Foundation project, is developing a Diploma of Applied Bitcoin as a next level pathway of Applying Bitcoin, for Enterprise, Government, Universities, Training Organisations and Schools. With an open source curriculum on GitHub, educators in the accounting space are also invited to participate and contribute. Maryna also shared exciting news about the Syla Tax Software partnership with BGL Simple Fund 360 for SMSF’s. Massive respect to Maryna and team for innovative work on the Crypto Transaction Data Standard, to standardise the reporting of crypto data for practitioners to more easily consolidate into accurate records. Feeling inspired to innovate within your accounting practice for its Web3 transformation journey? Be an early adopter of decentralised accounting and assurance with Auditchain, which will drive value towards smaller firms and improve our profession globally. Apply here to become a validator of the world’s financial disclosures with Auditchain, with no advanced technology skills required, and learn about proof-of-state and how decentralisation actually works to improve financial disclosures and our industry. Join a new working group for the Accountants On-Chain 'ACC DAO', a Decentralised Autonomous Organisation, to Earn2Learn CPD points through solving accounting and tax problems for Web3 startups and business adoption strategies, and thereby validating each others' competencies as Web3-ready business advisers. Subscribers to this page will soon be invited to apply to this DAO planning meetup. If you are a digital accountant, bookkeeper or business adviser and haven’t read The Bitcoin Standard and Internet of Value, study these now and listen to related podcasts… you’ll become an expert at speaking this new language before the year is out! Remember: Accountants are smart people. The Accounting Industry of small to medium practitioners onboarded half the population to the cloud. Accountants are getting ready to join the Blockchain Industry as trusted advisers in the web3 digital revolution. Most of all... Don't be afraid of Bitcoin! Thanks for reading and we look forward to seeing you at another education event soon.