Triple Entry Accounting (2005) | Hacker News Reader

Triple Entry Accounting (2005)

iang.org

60 pointsjc12319 comments

As a fan of accounting, I hasten to point out that this is only one of a couple of different triple-entry accounting schemes, which include:

* [Momentum accounting](http://en.wikipedia.org/wiki/Momentum_accounting_and_triple-...)

* [Cryptographically-sealed triple entry accounting](http://bitcoinmagazine.com/9969/triple-entry-bookkeeping-bit...)

The first link above, "Momentum Accounting" is a very different use of the term "triple entry". Arguably, it has a better claim to the use of the term accounting because it is higher layer.

The second link is more or less the same thing as the posted paper, within the bounds of journalism. Which concept probably has a better claim to the term bookkeeping because it is lower layer.

Igor also describes the same thing, more or less, in a really good hacker's guide to Bitcoin:

http://financialcryptography.com/mt/archives/001499.html

Where it gets interesting is whether Bitcoin can be considered triple-entry. I think with a fair stab, yes:

http://financialcryptography.com/mt/archives/001325.html

But we will have to let the serious accountants and also historians have their say on this one.

Darn it. That should be Ilya Grigorik's article here: https://www.igvita.com/2014/05/05/minimum-viable-block-chain...

While it's interesting from an accounting perspective, it could revolutionize payments. Imagine if you never gave your credit card number to a merchant, only signed a receipt from them in a way that assured the bank that the transaction was legitimate. PCI would be a non-issue since sensitive information is never exchanged. It also opens all new ways to pay for things, since the transaction could be submitted to the bank by either party (customer pays vs merchant charges).

Uh, Bitcoin?

Sure, but it doesn't need to be. The recipient doesn't need to care if the payment is coming from a bank account or a cryptocurrency (as long as there's a party to convert in between).

Sounds similar to the original idea of PayPal when it was an app for mobile, offline transactions between handheld computers.

What they consider to be the "third entry" is a cryptographically signed receipt.

Is that a newly invented "triple entry" or is that just a better way to keep track of the traditional "source documents"? (still a good idea, but maybe it doesn't need a fancy new term)

It sounds like the latter with a lot of shock and awe about the mathematical probability of authenticating the party who generated the source documents.

I'm building software account.I quite understand what he about to mention.When big company involve,the lot of passing layer from document a to document b. Actually this was very infective upon implement.Performance very weak. In real life,single ledger is more then people need.Double entry ledger for those requirement MSAB,FRS,FS whatever. Another page saying triple accounting was future transaction ? Sometimes Customer wanted simple application,sometimes customer wanted super complex flow system.Kinda hard to fulfill every their wishlist.

This looks like a technical solution to a business problem.

The best kind of solution.

I'm not sure if you intend that to be a dismissal of the solution. Do you?

(2005)

Knowing that this idea is nearly a decade old, and still not even briefly mentioned in passing by university accounting professors, is a fairly good indicator of the lack of value had by the idea. Whereas if it were generated in the past year, we may be on the bleeding edge of acquiring and employing this knowledge -- beta-testing it before experts in the accounting field have had a chance to review that code.

>is a fairly good indicator of the lack of value had by the idea.

Or a fairly good indicator of accounting habits inertia. I have no idea which one is true, but a great idea is not enough by itself to be adopted by everybody (end of world hunger anybody ?).

Your interpretation, unknown due to lack of value, may be valid but is more likely incorrect. Historically, ideas take a long time (decades or more), before adoption. Some are simply not marketed on a wide scale, little exposure causing little adoption/implementation. Other ideas, even though as equally valid as ones that are adopted, are simply not implemented due to circumstance (one excludes the other due to existing infrastructure, etc.). Others are actively resisted (especially in the sciences, e.g. tectonics, ulcers due to bacteria/viruses instead of stress). Please do not judge an idea based on its age or lack thereof.

10 years is not a long time in accounting. Just consider the fact that there is no complete theoretical framework behind the IFRS, or any accounting standard for that matter. But there have been multi-dimensional approaches to accounting Ellerman and Ijiri coming to mind. Furthermore, dimensions are used extensively in consolidations etc., albeit in a double entry manner. One year is definitely not the beta-testing period in accounting.

I can't tell if your are serious. Are you saying that we have implemented all good ideas that are over ten years old?

Preposterous!

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