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Ah okay thanks a ton! I think that clears it up. So basically: - The idea is that every source/destination ("node") of funds keeps their own account for every
by mehrdadn 6y ago
Ah okay thanks a ton! I think that clears it up. So basically:
- The idea is that every source/destination ("node") of funds keeps their own account for every node they deal with. And every transaction ("directed edge") necessarily needs to be tracked by both accounts in an equal and opposite manner.
- This is mainly only useful for businesses, as they generally have multiple sources of income (and/or multiple creditors) and need to be able to explain/track them. (At least as far I can see, I don't really see much of a point in doing this for the average person.)
- sago 6y agoYes on both fronts. Thanks for continuing until we've got on the same page. The only slight curve ball in your part one is that transactions are not always between two accounts. The joke is that 'double entry' sometimes has more than two. The classic example is sales tax. E.g. a transaction: Revenue>Product $100CR Liability>Sales tax $5CR Asset>Bank $105DB (Although the specific form/standard categories will massively depend on how sales tax works in your jurisdiction.) There are plenty of other examples (in my consulting: the customer paid some their bill in advance, or I pay a bill in a different currency and have to pay a fee). So I like the idea of making it a topology question, but it would be nice if it were only two.
- mehrdadn 6y agoYeah I almost mentioned multiparty transactions too, but thought I'd keep it simple since I got the crux of it :) thanks!