Why blockchain will revolutionize the audit

3 minute read 1 Oct 2016
By

EY Reporting

Insights from external journalists, academics, practitioners and EY professionals

Reporting, EY Global Assurance’s insights hub, provides high-quality content tailored for board members, finance directors and audit committee chairs.

3 minute read 1 Oct 2016

Show resources

Our simple guide to blockchain will help you understand how this technology could affect us all.

Blockchain is a type of database known as a distributed ledger that operates on a consensus basis. Whenever a user submits a new data block to the blockchain, the majority of other users must confirm that it is valid. The database does not have a central administrator.

Every data block in the ledger is linked to the previous block by a cryptographic algorithm called a hash, with the linked blocks forming a chain — hence the name “blockchain.”

Each user holds a copy of the distributed ledger on their own computer and the data is replicated and synchronized across all copies of the ledger in real time. If one of the computers holding a copy of the distributed ledger fails or comes under attack, the other computers continue to maintain the database.

Summary

Blockchain is predicted to be as big as the internet, but first organizations need to understand what it does, how it works and the ways in which it will affect us all.

About this article

By

EY Reporting

Insights from external journalists, academics, practitioners and EY professionals

Reporting, EY Global Assurance’s insights hub, provides high-quality content tailored for board members, finance directors and audit committee chairs.