WHAT IS CRYPTO CURRENCY?
A cryptocurrency is digital or virtual money protected by cryptography and traded over an internet network. It is not controlled or maintained by any entity, such as a government or a bank. Satoshi Nakamoto was the pseudonym used by the person or a group of people who developed the first bitcoin software and introduced the concept of cryptocurrency to the world.
Cryptocurrency features practically no or extremely cheap transaction fees, no transaction limits, and 24-hour access to funds with no additional fees or delays, and anybody may use them without the hassle of paperwork.
THE EVOLUTION OF CYPTOCURRENCY
In 2009, Bitcoin, the world’s first decentralized currency, became the first cryptocurrency to be utilized for transactions. In 2008, Nakamoto set the foundation for Bitcoin and blockchain with a white paper outlining the theory and practice behind the first cryptocurrency. In 2014, Bitcoin engineers modified the protocols of the blockchain. Developers constantly generate new cryptocurrencies to take advantage of a different blockchain protocol, enhance existing technology, or build a crypto asset that does something even more innovative.
HOW DOES CRYPTOCURRENCY FUNCTION?
Blockchain is a collection of blocks that record every transaction information. It records who made a transaction to whom, the value of the trade, and so on. Thus, the data is captured and duplicated throughout each node of the blockchain network, making it more secure and hack-proof. Crypto in cryptocurrency refers to cryptography, a technique that uses encryption and decryption to safeguard data from third-party influence.
DO REPUTED COPANIES INVEST IN CYPTO CURRENCY?
Currently, hundreds of publicly listed corporations own Bitcoin and other cryptocurrencies. There are several reasons why these businesses should invest in cryptocurrencies. It makes sense for businesses to diversify their portfolios and maintain a crypto asset reserve. Likewise, as the blockchain infrastructure becomes more viable, large corporations see the advantages of investing in cryptocurrencies. As more individuals invest in Bitcoin, Ethereum, and other popular crypto assets, businesses perceive a chance to expand their consumer base.
Companies are investing in cryptocurrencies because expanding their client base and serving this expanding market is a viable business proposition. Microsoft, Paypal, Overstock, Whole Foods, and Etsy, among others, are among the major corporations that have adopted bitcoin.
WHAT ARE THE CHALLENGES IT WILL BRING TO THE FINANCE & ACCOUNTING SEGMENT?
The rise of the cryptocurrency marketplace has presented accountants and bookkeepers with several issues. Accountants have had to account for a distinct asset class that does not behave like money or a commodity. The industry must modify its procedures and compliance rules to handle this new asset and its variants.
In recent years, the accounting sector has shifted from compliance to consultancy, partly due to the rise of automation. With the growing popularity and acceptance of cryptocurrencies and blockchain technology, CPAs, accountants, and auditors will have new chances to offer their customers competent guidance.
HOW TO FACE THE CRYPTOCURRENCY ACCOUNTING CHALLENGE IN 2023?
According to the International Federation of Accounting (IFAC), blockchain technology will alter accountants’ and auditors’ duties. It verifies each transaction and removes the need to input accounting data into separate ledgers.
Whether you like it or not, cryptocurrency will continue to influence the global economy. The accounting experts of the twenty-first century cannot ignore this technological innovation. Therefore, adjusting to them is vital, and certifications such as the US CMA and US CPA with global standards can prepare financial professionals to equip themselves with future-proof skills.
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