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Bitcoin, the digital currency, has taken the world of financial transactions by storm. Its decentralized nature cuts out the typical financial intermediaries like banks or brokers, and is used directly between the trading parties. As such, it is not only used for purposes like enabling trade and financial transactions in areas where this is not possible, such as some emerging economies; it is not only useful to link people to trade that have not been able to even get a bank account to do so; it has also notoriety as the go-to currency for illegal activities via the Dark Web, such as gun or drug trade.
Foregoing its ambiguous nature, bitcoin can become (or already is) a powerful new financial reflection of trading that is not limited by barriers or financial intermediaries. From an accounting point of view, its decentralized nature begs the question how these are recorded, and how these records can be trusted. The answer is blockchain, a distributed database of of a continuously growing set of records (blocks) that are difficult to be tampered with, and that are clearly identified as to who and when did the transaction. In this blog post by Karlin Lillington, she describes the blockchain idea, and how this system of ledgers might supplant the traditional financial transaction system using financial intermediaries.