Transaction systems are gradually, and very cautiously, being interconnected via the internet.

3 dimensions never fit on paper. You get a cube, or stack of squares, such as the monthly budgets for many departments, or combined budget for many product lines. It becomes more convenient to browse with a computer.

A hypercube is any cube of more than three dimensions. You get a stack of cubes. Requires computer to read and navigate.

Clearly, in the future, our transaction infrastructure will be better evolved both in internal information management, and its communications. It will become effortless for individuals and small companies, to remit funds, send invoices, order goods, etc. with browsers or network devices.

The online payments and accounting infrastructure enables individuals, for the first time, the creation of partnership accounting systems that are capable of operating mostly automatically, with feedback to the participants in real time.

These would enable individuals (or companies) to participate in collaborative ventures of arbitrary complexity by enabling allocations of revenue they helped to generate, or in allocations of costs or cost pools from which they have drawn resources by their activities. There is nothing preventing this from being realized.

Now, imagine these with a powerful accounting hypercube beneath, where you could view every cent of every transaction of the venture, and the way it was allocated to members. Imagine these with realtime facilities that give you the power, every day, to control and limit your exposure:

Imagine that the system had gotten stable and functional enough to produce all the paper filings and reports and tax returns, and print them on paper, and send to governments which so richly deserve these huge paper documents.

The sheer complexity of these affairs and the speed with which they can be created and destroyed, completely compliant with the law, will pose great challenges to regulators and taxing authorities. You will be able to analyze contracts written in JSON, to control the fine print you are signing. Agent software will recognize when overall revenue is maximized or cost minimized by a one-time throwaway entity, or one of your hundred other entities (partnerships, corporations, LLCs, JVs, etc. in various domiciles.)

Technology will reduce the risks to participants in partnering with new, untrusted ventures. Every platform vendor provides solutions for authentication, nonrepudiation, privacy, etc. There might even be standards some day. Nick Szabo’s Smart Contracts contains a useful catalogue of technologies and practices. There are many research sites pursuing solutions for reputation and Identity..

At some point, large corporations may awake to find that one remaining factor preventing teams of hundreds of employees from devolving out into collaborative groups may be the absence of standard metrics for A) what their peoples’capabilities really are, and B) what their propensities or desires really are. This is where JSON will really shine.

Five years from now there will be CPA firms and consultants will performing services that do not even exist today. For example, financial virtualization of companies. I don’t know what the term will be. Maybe “LLC Conversions”, or perhaps there will not even be any “Company” at all. A webledger having intercompany journal entries represents a frictionless trading environment among thousands of unrelated subscribers — The “eBay of partnerships” and unofficial joint ventures. Except that nobody would ever trust their root GL to a service provider. Accordingly the world awaits open source, end-to-end standards for inter-ledger semantics and methods.

“Virtualization” will come to the traditional corporation, where stockholders, employees, payroll, and perhaps other stakeholders like creditors or vendors will be groaning under the burdens of legacy Client Server stuff like SAP or Solomon, endless pension costs, hierarchic management structures, physical offices, and other overhead.

Exceptional employees will devolve themselves out to JVs or convert to partnerships or LLCs in which all the participants still hold roughly the same relationships that they hold today, but receive 20% more money by ripping out the entire admin system and legal form, and replacing it with an accounting hypercube in a web-based ledger. Everybody will get slices and allocations of every expense (or more realistically, expense pools, perhaps daily or weekly) for their inspection and approval. Ditto the income. The behavior of information will be shaped by mathematics instead of layers of management. Who shall do what when will be held in place by cryptographic algorithms.

Inrastructures as well as legal entities may reside in powerful hosts and quite often offshore. It’s perfectly legal, makes good tax sense and that’s what will happen.

After wave upon wave of integration of individual finance software, internet based accounting systems, payments systems, etc. what will emerge is a single, gigantic computer model of the entire human economy.

So why not REALIZE that fact immediately and apply what we already know about large computer models: to be useful they must be accurate. There must be tables or structures which most accurately represent the underlying territories. The attributes of entities must be represented in columns of tables, in properties and methods of software objects. Data redundancy must be eliminated. Business processes must not be bound into documents that are not computable.

Why not recognize that accounting and personal finance software at nodes throughout the network must reconcile with one another in order to be accurate? Frankly I expect web based accounting systems like Oracle Business OnLine to deploy high-level services that span the different businesses within their server (completely unrelated companies!) in order to enforce state alignment between the parties’ private models of business processes, as well as effect money transfers. The bank will truly reside on the data bus of some damned server in Redwood Shores, or Redmond WA, there will be no banks on streetcorners.

Perhaps double entry accounting will, basically, be dropped where the actual data from the actual accounting system of other side of each accounting entry is substituted for what we traditionally posted on our own ledger. Yes, your balance sheet assets and liabilities will equal the vendors’ and customers’ balances and there will be no reconciliation because there will be only one master-copy of the numbers. (Today we have eight sets of numbers -octuple entry.)

Perhaps the web-based bank of the future will be only a chronology of transactions with a few essential columns: Date/Time, Sequence number, Debit Person Number, Credit Person Number, Amount. This type of thing is entirely possible within the subscriber population of any webserver-based GL today. The rest of the information for the transaction might be optional, and kept privately or in some agreed upon tables, with field level need-to-know access. Here is a paper, describing a public Shared Transaction Repository.

Since the beginning of the computer era software has been built with the overriding purpose of making money for the developer. Rare exceptions exist, such as smtp email, and they show how brilliantly software can perform when it’s purely designed to do a job, without the constraint that it must extract rent, a percentage, spread, or fee from people reliably and robustly, permanently.

What will it take for the Vendors of Web-based accounting systems to build accurate, unbiased models that enable ubiquitous commerce and settlement? To just allow people to deal with anybody we like? At present, proprietary vertical solutions present a twisted representation to the user of what is happening. What users can buy is limited to the company store. They learn only metaphors that contain the service provider’s angle. Customers cannot sell anything to other users on the same host, on the same hard disk! — the view of financial data seems completely inward focussed. You cannot break out, you cannot click-through to view the external entities from your balance sheet.

We are living in the era when engineers build bridges without being responsible for engineering safety. Does twisted cognitive space cause harm?

Pure and accurate information systems are the key to a future, in which we will get the work done in more congenial, consensual and joyful ways.

|Crypto Educator | C++ / Python developer | #Bitcoin #DeFi supporter |Fintech Man |Advisor |Trader |