Topic: Bitcoin: TRIPLE ENTRY CROWD ACCOUNTING (Read 11233 times)

no, it serves a useful purpose.  of course you can take the position that it doesn't matter, Bitcoin is going to succeed one way or another eventually.  but if we as a collective can explain Bitcoin to skeptics in a coherent, clear manner that eventuality will come much faster.

This is like trying to explain a gas pedal to buggy whip manufacturers.

"The gas pedal stimulates the horsepower of the engine."

"No, no, it whips the engine into working harder."

Just give it up.

yeah, i have to agree not being an accountant.

Bumping this great and useful thread.

The second date would be the posting date. Posting, meaning similar to recording or confirming. (As opposed to reconciliation. The second date is not necessarily the date your bank decided to redo the math to see if it added up, it is the date it was deemed recorded on your account.)

Of course, they can be different. The first one is date/time of value (i.e. when change of ownership took place) and the second one is date/time of accounting (i.e. when the corresponding record in the general ledger was made).

I'm not sure the block finding duration is equal to any "accounting period". A transaction has a timestamp, that's when it should be considered to have been taken place. It can only be decided at a later point (with enough confirmations by miners) wether or not it took place.

On the transaction list my bank gives me, for example, there are two timestamps. One designating the point in time when the money flow was considered to be happening (relevant for calculating interest, for example) and the point in time the transaction was validated by or inserted into the system. The two can be different.

Bold part needs rephrasing or simply scratch it. Its not like all bitcoin users are honest.


Dont like that phrase much either. Let the reader decide if its magic or not. IMO, it isnt magic, its math. Magic is something without rational explanation. Its brilliant perhaps, but no hocus pocus.  A thread holding the whole thing together also makes it sound as if its very fragile, when in reality its ridiculously robust.


As many others, I dont like the word crowd. I think words like "public" and "Open" are more appropriate.

Every notary service in every country is heavily regulated and licensed. Why do you want to break the law?

I'm not sure why you all insist to put bitcoin in a certain category that already exists? Don't you understand that you're actually trying to put it under existing legal framework? This is the government and banks that need this done, not the average bitcoin user. Bitcoin is just bitcoin. Nothing like it was created before. This is the power of bitcoin. Let people read what is bitcoin. IMO, short explanations would do more harm than good.

People have referred bitcoin as a distributed digital notary service.  I like this description.  With such a notary service it is possible to implement a triple entry accounting system.  I wouldn't say that bitcoin *is* "triple entry crowd accounting," but it certainly enables it.  I like the use of "crowd" to distinguish it from your typical triple entry system which requires an independent third party to a transaction.  In the case of bitcoin, the crowd is that third party.  I'm not especially crazy about the term "crowd" however…maybe "Distributed Triple Entry Accounting" or "Two Party Triple Entry Accounting" (since it doesn't require any trusted third party …aside from the network itself).

+1

Ideally, we want terms with similar meaning in the real world, the objective being to use language to describe concepts people already understand.  Kind of how Apple decided that a "subdirectory" would better be understood by the world as a "folder".  If most accountants and financial sector workers are familiar with accounting periods of random length approximately ten minutes long, that may or may not contain transactions that took place during the period, then sure, it is an excellent choice, and I will leave it at that.


As it should be, and so should yours (not the mining part).  If the idea of changing core Bitcoin terminology gets a consensus around it, the pros and cons of every credible choice should be well enumerated.  If you already understand the mining algorithm, then accept my apologies for assuming otherwise (most people do not understand the mining algorithm nor do they need to).

I am looking to come up with better terminology to describe what bitcoin is, not so much what it's like, so I am favoring words that mean what is literally happening.  I am considering formally proposing to the developers and the community at large that we avoid terms like "block" and "block chain" (except when talking about source code etc.) in favor of accurate non-computer-scientific terms that will be better understood by the non-technical public, while still remaining literally correct.

Accounting period can be any period. Accounting periods are not only those periods that are defined in IRS manuals... Every organization is free to define their own accounting periods to suit their internal needs. If you need reliable data for all financial transactions every minute then 1 minute can be the accounting period.

Hmm... Well, I thought you have started this thread trying to abstractly describe Bitcoin in as few words as possible with terms that would make sense to those who are familiar with banking but not with technology? So, my short answer to your initial question is miners are like auditors and what they do is like reconciling data sets of financial transactions for 10 minute accounting periods.

Obviously, your intention is to argue against every proposal and teach me what is mining.

Public ledger is scores better than block chain.  It's a term that actually makes sense to people in the business and financial world.

I like "page".

Let's use "block chain" as a technical term concerning the implementation. The bitcoin "block chain" is a type of (or: implements a) "public ledger" with certain properties.

Here is my attempt. I tried incorporating the new terminology, as well as a number of things about the security and workings of bitcoin in general.

"The recorders record the transactions to the public ledger, setting them in stone so to speak. This recording costs a lot of processing power, to prevent someone with malicious intent from adding fake pages to the ledger with their home computer. Or, for that matter, to prevent a government that wants to hurt bitcoin from adding fake pages to the ledger: the recorders' combined is larger than the 500 top supercomputers combined, which means it is impossible for anyone to create fake pages.
As a compensation for the processing power, the recorders of the network currently get new coins. These coins didn't exist before, and slowly increase the supply of bitcoins available. The speed at which these new bitcoins are generated decreases over time. Currently there are about 7 million coins, but there will never be more than 21 million coins.
This reward for the recording serves both to distribute the new coins, and also to motivate people to be a recorder. Over time, the generation reward will go down. It is expected that at that point the transactions themselves will provide enough reward: Some of the transactions will cost a small fee, in the order of half a dollarcent. This fee is a reward to the recorders.

Having this small fee also prevents people from trying to harm bitcoin by sending lots and lots of small transactions, trying to clog the network. If they want to do that, it would actually cost them money, so the recorders would not care since they're compensated by small fees on the spam-transactions."

Note that I have taken some liberty in the explanation. The bit about "fake pages" is slightly different in reality, but I think it is more important to create an explanation that regular people from all backgrounds can understand. The difference between my explanation and the real explanation is small enough that they won't ever notice it, but it's much easier to explain. This still gives them a confidence in the security which is roughly equal to the real explanation.

If using my proposed jargon replacements, it would sound like this.

"The inventor of Bitcoin stipulated that the initial distribution of Bitcoin currency would be awarded to those who gave their computing resources to storing, maintaining, and recording new pages into the public journal.  The system's design grants a fixed but diminishing reward per successfully recorded page.  It was designed this way, in part, to give a market incentive for participants to bootstrap the Bitcoin infrastructure in the initial absence of fee-generating transaction volume.  As Bitcoin grows, its inventor designed it such that the costs of creating and maintaining the public journal would slowly transition from rewards of new currency per recorded page, to charging fees per recorded transaction, particularly so that the creation of new currency would eventually reach a limit.  Because anyone can work on creating pages and collect fees for doing so, the fees are kept in check by market forces of competition to closely reflect the actual cost of maintaining the journal."

(note that I'm playing with the term "public journal" in place of "public ledger", which of course refers to what we call the "block chain"... because a "journal" sounds more like a book with "pages" being a meaningful unit, where "ledger" is more likely to bring a spreadsheet to mind, where you add rows.)

"Accounting period", as used in the finance industry and in business, means a month, a quarter, a fiscal year.  Using "accounting period" to mean a period that approximates 10 minutes - and whose actual length is totally random - will do little to help them understand what's happening.  Also, there is no requirement that a "block" include any or all of the transactions that happened during the "period" they purport to account for.  This becomes even less correlated in the event of what we presently call a chain reorganization.  May as well just continue to call it mining a block.

If miners' GPUs were busy adding the inputs and the outputs of the transactions together and comparing the sums to ensure they balance, then I would certainly agree that they are reconciling.  If you are familiar with the algorithm that miners run though, you'll know that's not the case.

There is no point in highlighting the entire quotation... The highlight is to match against your previous argument! As far as your recent point, yes, every block is a set of transaction records and the end of the block is the end of accounting period. I don't see any valid arguments against what I have suggested.

"Etching"