Thoughts on momentum accounting financialcryptography.com/mt/archives/00…
I see a connection between Ijiri’s momentum accounting and cryptographic receipts, both called triple entry, so I'll try and draw it out. 1/10
I see a connection between Ijiri’s momentum accounting and cryptographic receipts, both called triple entry, so I'll try and draw it out. 1/10
Ijiri's third entry is a derivative of two successive accounting entries, making it like momentum in physics. Therefore, he suggests, we could in effect use this 'calculus' technique on accounting records to predict the future direction of activity. 2/10
warrenhenke.com/writing/essays…
warrenhenke.com/writing/essays…
altho everyone wants to know the future, I am not comfortable with the notion that you can measure momentum by doing a 'calculus' over accounting records. As his third entry is derivative information, I suspect that its conceptual value (use) is limited by fraud / deception. 3/10
Following the Bill Black school of accounting: because accounting records are used (relied upon) by many people for many things, once someone starts doing 'derivative' processing and relying upon those results, the opportunity for gaming that player’s outcomes rises. 4/10
Like Enron pumping the results at the end of quarter, or the sales department cutting corners at end of month to 'make the numbers.' Momentum accounting would create a new measurement to game.
Think Heisenberg, Goodhart or GIGO. 5/10
Think Heisenberg, Goodhart or GIGO. 5/10
switching to cryptographic receipts, the goal is to make the accounting records so reliable, they _can be the money_, or "the receipt is the transaction." Once rendered into a cryptographically sealed record, and shared amongst 3, it becomes the entries. Hence triple entry. 6/10
"I know that what you see is what I see" @gendal. We merge the accounting system with the reality it accounts for, we improve the quality of the base layer to the point where it's the reality not the representation. Entries become the facts, rather than representations. 7/10
Back to momentum accounting, the point about fraud & gaming is that (IMHO) you will never be able to rely on it if both the momentum calculations are simply observations from which anyone can draw conclusions, _and_ the underlying records are subject to error. 8/10
But combined, momentum accounting over the top of cryptographic receipts, the former might work. IOW, cryptographic receipts are necessary for momentum accounting. Maybe, layering observations over uncertainty sounded risky, and the market wasn't ready to take it on. 9/10
That's the relationship I see - with the newer blockchain generation systems as an accounting layer, we now have a factual base where momentum accounting might take off.
(To see the how, look at the IMDP paper on AI & blockchain. res.mdpi.com/futureinternet… ) 10/10
(To see the how, look at the IMDP paper on AI & blockchain. res.mdpi.com/futureinternet… ) 10/10
tiny postscripts: many cites/links are in the blog post financialcryptography.com/mt/archives/00… h/t to @peakchain for many of those new ones!
Also, recall that when all this was done back in the day, none of us had 2020 vision.
Also, recall that when all this was done back in the day, none of us had 2020 vision.
