Blockchain Technology: Its Applicability, Challenges, and How these Challenges can be Handled in the Normal Accounting Cycle

Abstract

The tremendous advances in digital technology continue to affect how people live nowadays. In the fields of education, business, medicine, and science, among others, the fast-paced modernization of different processes is tremendously evident by adopting the latest digital resources to add value in the provision of services. In the world of finance and accounting, the presence of cryptocurrencies, the prevalent use of electronic wallets, and blockchain technology (BCT) are indicative of the revolutionary impacts of digitization. BCT is a distributed ledger, which contains different potential benefits on the one hand and different potential challenges on the other. Potential benefits are in terms of security, digital identity, and cost savings. Meanwhile, potential challenges include its technicality, complicated features, and scalability. The potential benefits and challenges are worth noting to find out its applicability in the normal accounting cycle. Despite the available literature about the use of BCT, no study has been conducted yet on how it would be possibly applicable in the normal accounting cycle. The purpose of this paper is to give a general overview, based on a literature review, of the potential applicability of BCT in the normal accounting cycle. This study used the theory synthesis, a method that included an examination of 17 recent or current literature published from 2017 to 2021 about the BCT and its potential applicability in the accounting cycle, including its challenges and how these challenges can be handled. The potential benefits of BCT in terms of security, digital identity, and cost savings might be considered on its applicability in the normal accounting cycle. However, the potential challenges shall also be considered to have a holistic perspective on dealing with the subject matter.

Keywords: blockchain, blockchain technology, normal accounting cycle