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It's not reinventing accounting. It's making sure that the accounting you do is public because that allows for trust. I think it would be cool if we, as a soci

It's not reinventing accounting. It's making sure that the accounting you do is public because that allows for trust. I think it would be cool if we, as a society, had easy API access to everything our governments spend their money on. Wouldn't you say that would be for the greater good? That's exactly what Vitalik is proposing.

indymike 4y ago
Making something public doesn't solve the problem. Deceiving the public is easy and the public is duped frequently. Making accounting public doesn't solve the problem at all.
- CharlieDigital 4y ago
  You're right that making it public alone doesn't solve the problem since it is easy to "cook the books". But if it's public and the results are the side effect of each transaction (e.g. the accounting is rules-driven and automatic as part of the system itself), I think it can change the game.
  - hef19898 4y ago
    In which case cryoto would even be less private than traditional banking, I guess.
  - giaour 4y ago
    So, all we need for this to succeed is for the ethereum blockchain to be the ultimate source of truth for all finance. So long as “off chain” assets of variable liquidity exist, it seems like you could absolutely cook the books.
- viscanti 4y ago
  It's not making accounting public. It's making accounting public in a way that you can't dupe the public. There's a question if that's possible, but you're arguing against a straw man here. I'm skeptical that they'll come up with something that convinces everyone that their new version of public accounting can be trusted, but maybe there's something novel they can come up with that will convince the skeptics.
  - indymike 4y ago
    Someone will just use this as plot armor for a scam.
    - viscanti 4y ago
      Which probably won't convince those of us who are skeptics that it's possible. It needs to be technically possible, but easy enough to verify for the average user that someone can't just claim they're doing it the right way but doing something fraudulent instead. There's good reason to be skeptical here. But arguing that all they're trying to do is make public accounting isn't the right counter argument here.
      - indymike 4y ago
        > But arguing that all they're trying to do is make public accounting isn't the right counter argument here. This will not solve human moral turpitude that leverages technology to self-enrich at the expense of others.
  - kordlessagain 4y ago
    If you want to make accounting public, go dig giant limestone disks out of that island with cannibals on it, then bring them back and put them on the beach so everyone can see them: https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones
  - lazide 4y ago
    The issue here is that making money by holding onto assets you can’t fundamentally make money by holding is hard. There is a huge incentive to do things that people don’t actually want you doing, so someone can actually make money. Accounting is just a word for tracking money. It can be opaque, or obvious, detailed, or vague. And it can also be fake. Knowing which is which, and if it is appropriate or not, is almost always specific to the circumstances and the goals of whoever is doing it, and that’s pretty fundamental. GAAP is a generally acceptable list of practices for public entities, but there are still a ton of judgement calls going on there, and have to be, for what is a pretty ‘standard’ way to operate pretty standard businesses. There is no automated way to do it that won’t allow manipulation. Attempts at automating it are more likely to provide something like bank account statements, than a balance sheet. Which is something, but it’s not enough. That’s what is generally referred to as book keeping (aka transactions are recorded, but not necessarily characterized or organized correctly), but may even fall short of that.
- shkkmo 4y ago
  Transparency is not a cure-all but it can make it a lot harder to hide certain types of mistakes or corruption.
candiddevmike 4y ago
Public record keeping has never prevented two sets of books/"cooking the books". You need independent audits.
yucky 4y ago
> I think it would be cool if we, as a society, had easy API access to everything our governments spend their money on. Wouldn't you say that would be for the greater good? We can't do that, because then people would realize it's all a house of cards. In an unrelated note, when was the last time US gold reserves were audited?
- Eisenstein 4y ago
  Why would anyone care how much gold the US government has?
  - mypastself 4y ago
    Do you think having insight into a country’s assets is irrelevant? Or just this specific asset?
    - cool_dude85 4y ago
      Yeah, it more or less doesn't matter. The US isn't in danger of having to liquidate assets, and if it was you'd have a lot worse problems on your hands than how many gold bars are in Ft. Knox. Why do you think it matters?
      - mypastself 4y ago
        Transparency, for one.
        cool_dude85 4y ago
        That's a very general argument for a very specific request. Transparency is good, but nobody is coming on to HN asking citing transparency and asking for audited figures for the value of US-owned dump trucks, or how much wood pulp we could produce in Grand Tetons National Park, or how much money we could make grinding up the highway system for scrap metal. So why gold specifically?
nonameiguess 4y ago
Budgets and financial statements for US federal and municipal governments already have to be public. If you're talking about the bill of materials and receipts for every individual transaction, there are some pretty serious obstacles to that. At minimum: - The government directly provides medical service via the VA and DoD and disclosing every transaction risks HIPAA violations. - It may not now be illegal, but I think there would be some privacy concerns about things like revealing every person's student loan payments. - Counseling and employee assistance type stuff for government employees can't be made public for the same reasons. - Criminal fines for anyone whose record is later expunged present a hurdle. - Payments to confidential informants in criminal investigations obviously need to stay confidential or you're going to get them murdered. - Witness protection payments same thing. - At least some transactions are classified. - Contract details are kept hidden from other contractors right now to avoid undercutting and collusion. All in all, as long as you're forced into some system where maybe some, even most, transactions can be made on a public ledger, but others have to be kept private, you'll never prevent fraud and/or suspicions of fraud in the form of transactions being kept illegally private. At some point, you have to trust the auditors and Congressional oversight committees.

indymike 4y ago

Making something public doesn't solve the problem. Deceiving the public is easy and the public is duped frequently. Making accounting public doesn't solve the problem at all.

CharlieDigital 4y ago
You're right that making it public alone doesn't solve the problem since it is easy to "cook the books". But if it's public and the results are the side effect of each transaction (e.g. the accounting is rules-driven and automatic as part of the system itself), I think it can change the game.
- hef19898 4y ago
  In which case cryoto would even be less private than traditional banking, I guess.
- giaour 4y ago
  So, all we need for this to succeed is for the ethereum blockchain to be the ultimate source of truth for all finance. So long as “off chain” assets of variable liquidity exist, it seems like you could absolutely cook the books.
viscanti 4y ago
It's not making accounting public. It's making accounting public in a way that you can't dupe the public. There's a question if that's possible, but you're arguing against a straw man here. I'm skeptical that they'll come up with something that convinces everyone that their new version of public accounting can be trusted, but maybe there's something novel they can come up with that will convince the skeptics.
- indymike 4y ago
  Someone will just use this as plot armor for a scam.
  - viscanti 4y ago
    Which probably won't convince those of us who are skeptics that it's possible. It needs to be technically possible, but easy enough to verify for the average user that someone can't just claim they're doing it the right way but doing something fraudulent instead. There's good reason to be skeptical here. But arguing that all they're trying to do is make public accounting isn't the right counter argument here.
    - indymike 4y ago
      > But arguing that all they're trying to do is make public accounting isn't the right counter argument here. This will not solve human moral turpitude that leverages technology to self-enrich at the expense of others.
- kordlessagain 4y ago
  If you want to make accounting public, go dig giant limestone disks out of that island with cannibals on it, then bring them back and put them on the beach so everyone can see them: https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones
- lazide 4y ago
  The issue here is that making money by holding onto assets you can’t fundamentally make money by holding is hard. There is a huge incentive to do things that people don’t actually want you doing, so someone can actually make money. Accounting is just a word for tracking money. It can be opaque, or obvious, detailed, or vague. And it can also be fake. Knowing which is which, and if it is appropriate or not, is almost always specific to the circumstances and the goals of whoever is doing it, and that’s pretty fundamental. GAAP is a generally acceptable list of practices for public entities, but there are still a ton of judgement calls going on there, and have to be, for what is a pretty ‘standard’ way to operate pretty standard businesses. There is no automated way to do it that won’t allow manipulation. Attempts at automating it are more likely to provide something like bank account statements, than a balance sheet. Which is something, but it’s not enough. That’s what is generally referred to as book keeping (aka transactions are recorded, but not necessarily characterized or organized correctly), but may even fall short of that.
shkkmo 4y ago
Transparency is not a cure-all but it can make it a lot harder to hide certain types of mistakes or corruption.

candiddevmike 4y ago

Public record keeping has never prevented two sets of books/"cooking the books". You need independent audits.

yucky 4y ago

> I think it would be cool if we, as a society, had easy API access to everything our governments spend their money on. Wouldn't you say that would be for the greater good? We can't do that, because then people would realize it's all a house of cards. In an unrelated note, when was the last time US gold reserves were audited?

Eisenstein 4y ago
Why would anyone care how much gold the US government has?
- mypastself 4y ago
  Do you think having insight into a country’s assets is irrelevant? Or just this specific asset?
  - cool_dude85 4y ago
    Yeah, it more or less doesn't matter. The US isn't in danger of having to liquidate assets, and if it was you'd have a lot worse problems on your hands than how many gold bars are in Ft. Knox. Why do you think it matters?
    - mypastself 4y ago
      Transparency, for one.
      - cool_dude85 4y ago
        That's a very general argument for a very specific request. Transparency is good, but nobody is coming on to HN asking citing transparency and asking for audited figures for the value of US-owned dump trucks, or how much wood pulp we could produce in Grand Tetons National Park, or how much money we could make grinding up the highway system for scrap metal. So why gold specifically?

nonameiguess 4y ago

Budgets and financial statements for US federal and municipal governments already have to be public. If you're talking about the bill of materials and receipts for every individual transaction, there are some pretty serious obstacles to that. At minimum: - The government directly provides medical service via the VA and DoD and disclosing every transaction risks HIPAA violations. - It may not now be illegal, but I think there would be some privacy concerns about things like revealing every person's student loan payments. - Counseling and employee assistance type stuff for government employees can't be made public for the same reasons. - Criminal fines for anyone whose record is later expunged present a hurdle. - Payments to confidential informants in criminal investigations obviously need to stay confidential or you're going to get them murdered. - Witness protection payments same thing. - At least some transactions are classified. - Contract details are kept hidden from other contractors right now to avoid undercutting and collusion. All in all, as long as you're forced into some system where maybe some, even most, transactions can be made on a public ledger, but others have to be kept private, you'll never prevent fraud and/or suspicions of fraud in the form of transactions being kept illegally private. At some point, you have to trust the auditors and Congressional oversight committees.