Viewpoints: Accounting’s digital evolution in web 3.0

Artificial intelligence: here to save the day

AI is not merely a tool but a collaborative partner in finance. It can predict the trajectories of virtual asset values and streamline complex transaction data, enhancing the capabilities of professionals. It’s essential to emphasise that AI complements human expertise rather than replacing it. This synergy is particularly vital in dynamic ecosystems and will allow professionals to expand their workload and drive growth. There are many AI tools to explore, such as Botkeeper, Appzen, and Mindbridge AI Auditor.

Introducing Web3: the future of the Internet

Web3, characterised by its decentralisation and transparency, heralds a new era in online operations and aims to revolutionise the way we interact in the digital world. Web3 is all about digital ownership that is secure and easy to identify who owns the digital asset on the blockchain ledger. Every transaction is recorded on-chain and is public. If the blockchain being used is Ethereum, then one can go to etherscan.io and see every transaction made. This could also be used to track various wallet addresses or smart contracts to attain financial information. The adoption of non-custodial platforms like metamask.io holds great promise within the accounting field for crypto and digital assets like non-fungible tokens. They facilitate transparent transactions and bridge the gap between traditional and decentralised finance. You can onramp from fiat to crypto and offramp from crypto to fiat. This transformation has far-reaching implications for auditing in the decentralised finance era, as it involves navigating a global network of peer-to-peer transactions, each with its unique story.

Reshaping accounting with crypto and digital finance

Cryptocurrencies, although slightly controversial, have emerged as an innovative and secure evolution to traditional finance, and industries worldwide are actively exploring their potential. Accountants face the complexities of digital assets, tokenized resources, and the dynamic nature of crypto markets. However, these challenges also present significant opportunities. By gaining a deep understanding of the evolving cryptocurrency landscape, accountants can develop innovative financial strategies that have the potential to transform the way ledgers are recorded. New crypto accounting platforms are emerging, such as cryptio.co, where you can import multiple wallets and smart contracts as well as track all transactions on-chain with debtors and creditors.

The metaverse

The metaverse is set to be the next evolution of the Internet and computing. As digital landscapes bloom, accountants will find themselves faced with unique challenges – how do we value a piece of virtual land based in the metaverse extension? How do virtual goods in the metaverse compare to traditional assets? How to account when a physical and a digital asset are interlinked. Various decentralised open metaverses are worth exploring, such as Sandbox.game (gaming), Decentraland.org (social), and Africarare.io (social).

Implications

Decentralised ledgers, smart contracts, wallet addresses, gas fees, impermanent loss, bridges, staking – these aren’t just buzzwords of the new digital age. For the modern accountant, this lexicon is swiftly becoming the foundation of their new language.

In the era of digital transformation, industries worldwide are undergoing significant changes. Emerging technologies like the metaverse, artificial intelligence (AI), Web3 and cryptocurrencies are revolutionising how businesses manage their operations and finances.

As all these exponential technologies constantly evolve and accelerate, they are also converging, which increases interoperability and adoption. This brings profound implications for the future of work.

Author
Monica Singer CA(SA)
Blockchain Evangelist for Consensys