On this special episode of the CoinGeek Weekly Livestream, Kurt Wuckert Jr. welcomed legendary financial cryptographer and inventor of the Ricardian Contract, Ian Grigg. The conversation covered accounting, identity, and blockchain’s potential role in both.
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Welcome, Ian Grigg!
Wuckert introduces Grigg, telling us how he was an early pioneer of the concepts many think are new in blockchain today. Grigg was involved in the early Internet and helped shape some of its culture today, and he has been involved in blockchain in some form or another from the outset.
Grigg reminds us that people have been working on electronic cash since the ’90s. He and some of his peers built the first digital currency exchange, but that was all long before Satoshi came along with Bitcoin.
Smart contracts are built from older concepts
Wuckert acknowledges that people think of smart contracts as 2015 technology, but they’re decades old. People like Grigg helped form this tech, and he wants to know if any of his predictions from then came true.
Grigg says that, back then, many of the people involved were standard engineers and businesspeople. When he invented the Ricardian Contract, it was delivered so that value couldn’t be exchanged without some extra magic on the server side. This was deliberate because they feared people would issue value and pump and dump it. That prediction, at least, came true.
Now that regulators have stepped into the picture and are coming after ‘crypto’ criminals, some of that older, trusted technology will be relied upon or iterated again. Grigg is clear that there’s no avoiding regulators, whatever one may think of them; the digital asset community has completely failed to self-police.
Will regulators embrace the tech, and can it deliver on its promise?
Wuckert notes how many of the concepts in the industry come out of the liberty movement. He had hoped that something so good would be created that governments would embrace and move toward it. Can we forget all of the malfeasance and move toward an economy like this?
“This, too, shall pass,” Grigg replies.
He points to the $TRUMP coin as an example of blatant value extraction with no work involved and notes that the Securities and Exchange Commission (SEC) was formed to stop this sort of thing. You’re supposed to publish a contract and stick to it, and $TRUMP coin is a perfect example of how ‘crypto’ has taken the worst elements of the American markets and brought them to the highest office in the country. He wonders how we can stop this and emphasizes that we must since it’s all negative value.
Wuckert tells us he initially hoped that small businesses across America could issue stocks on the blockchain without going through the gatekeepers. He wonders if this is still possible.
Grigg says he believed in those ideas in the 90s, too, but he soon discovered that stocks are not just bought; they are sold. While blockchain makes some elements of the process, such as accounting, easier, it does nothing to address distribution. Just as Hollywood controls the distribution of movies, Wall Street controls stock offerings and the like. The parties that maintain this distribution haven’t even started to look at this seriously, so we’re a long way off.
Part of the problem is that people chase the latest shiny object, Grigg laments. That has been true from the Crusades until now, and there are still far too many bright, shiny things but not enough true value.
Why does Triple Entry Accounting Matter?
Grigg explains that Triple Entry Accounting (TEA) is a computer science concept linked to accounting. Since very few people are interested in both, it’s difficult to get traction for the idea, but he remains convinced it is world-changing.
“It changes everything about accounting,” Grigg says, noting how it does away with simply replicating paper books onto computer systems. In the current paradigm, the founder or owner of an entity can alter the books and do things the accountant doesn’t know about, but TEA changes this. Thus, accounting moves from being a founder’s opinion to a set of market facts with all transactions signed off by a third party.
Given how entrenched players in politics and elsewhere rely on kickbacks and aren’t likely to embrace this concept, Grigg believes it will first catch on in a new business or industry. That’s part of why he runs the Triple Entry Accounting conferences; eventually, someone will realize how much it matters and will utilize it.
The Triple Entry Accounting Conference
Grigg has run TEA conferences before. This next one will try to balance the academic side, which is important, with the business world. However, Grigg says he doesn’t want it to become dominated by business either.
For those interested, the next Triple Entry Accounting conference will take place in Malta on April 25 and 26. You can register or express interest on the official TEA Conference website.
To hear more about Grigg’s thoughts on AI, how TEA could be used in the gig economy, and whether KYC is a good or bad thing, check out the livestream episode here.
Watch: Utilizing Triple Entry Accounting
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