Business

Erik Gibbs

Forex accounting using Bitcoin SV is revolutionary—and could be the future

Bitcoin SV (BSV) isn’t just about trying to offer another digital currency—there are already too many that serve no real-world purpose. What it provides, though, is a mechanism with global implications for financial stability and transactions, as well as a solid and stable blockchain for businesses, that will continue to find greater acceptance as more people around the world begin to truly grasp the cryptocurrency concept. Dr. Craig Wright delves into how BSV can be beneficial for forex accounting in a recent Medium post and how it can be useful for Ricardian contracts.

Smart contracts may be “the killer application of distributed technology,” according to Datafloq.com, but they could be only a precursor to something even better. The Ricardian contract is a type of legal contract first introduced by Ian Grigg in 1995. Grigg defined it as “a form of digital documents that act as an agreement between two parties on the terms and condition for an interaction between the agreed parties.”

Given that Bitcoin was never meant to be a currency that operated outside the boundaries of a lawful society, Ricardian contracts fit within the confines of the Bitcoin concept. As Wright asserts in his post, “law is law, and code is mere evidence at best.”

Implementation of Ricardian law could allow for the creation of an entirely automated accounting system—all taxes could be paid automatically, all contracts could be registered automatically. The system would ultimately become “self-enforcing and self-auditing,” according to Wright, who explains, “As a simple example, imagine an online store selling goods. If the goods are being sold internationally, they can be sold without VAT being charged and any international customs fees can be incorporated. When sold locally, VAT (a goods and services or value-added tax, a consumption tax) can be accounted at the time of the transaction. Using tokenised notes, the organisation could instantly pay any and all tax that it has collected as a part of its trade. Doing so simplifies contracting for small businesses, and stops many forms of fraud within large organisations. More importantly, it allows governments to collect revenue with minimal interference to business.”

Wright, and the group at nChain, have already received a number of patents (in pdf) to cover systems that cover end-to-end development contracts, and which are legally enforceable in their completely digital forms. The patents have been approved in jurisdictions around the world and “developers have certainty when building on Bitcoin (BSV).” This certainty also extends to business owners, who will appreciate that only BSV can provide stable blockchain development that is robust, yet flexible, to allow for long-term business implementations.

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