A brief history of Accountability, Accounting and Accounts

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Accountability, Accounting, Accounts

The History of Accounting is the history of humans search of agreeable truth. Thousands of years before computer technology humans understand that data was the asset, and those who controlled data controlled the history of humanity.

Network Accountability, Cohesion in a distributed system

A long long time ago, in a land we still occupy, all humans lived in tribes. Any significant event that took place was typically a community affair with many witnesses present. These witnesses would be able to each give their perspective of the event and together they could form the the collective truth. Everybody was encouraged to tell the truth otherwise their story would differ from everyone else and their ability to be a witness would be questioned.

The reliability of tribal accountability was based on the number of community witnesses present at each event, the more witnesses the more reliable the truth was. The accountability of information is what declares its accuracy, if any event or information can be accounted for by a large number of witnesses then it has high accountability and therefore high amount of truth.

Accounting Records

As human tribal society evolved so did the number of events and things people wanted to witness. The ability for tribal witnessing to hold an accurate accounting of information became increasing more difficult. In order to increase the accountability of information, humans began to create records. The first known written records are simply just accounting sheets that recorded events, agreements, and transactions.

Each time a significant event occurred eg: birth, death, marriage, or an exchange of property, the event would be recorded in a record book. If people wanted to recall information they no longer had to reach out to the community to verify the event they could simply seek the truth from the written records. These books became a more reliable way for information to hold accuracy in time space.

Naming and Accounts

As record books grew in popularity so did the desire to control and monitor the accuracy of information. Truth was no longer decided by decentralized and distributed community witnessing but instead became centralized and controlled by a central institutional authority. Governments in tandem with their religious counterparts were created to control the record books. Those who controlled the books controlled the ability to declare what was Truth. If it wasn't written it wasn't verifiable and thus could be dismissed.

In order for information written in the record books to accurately refer to specific people in a consistent and verifiable manner, each person was given a written name that was recorded in a name registry. Names were the first known accounts and where recorded and managed by institutions using a name registry which is simply the chart of accounts. These named accounts were used to manage the information in the record books to improve the accounting process and streamline accurate accountability.

The Accounting Receipt

In order for institutions to scale their ability to account for more events they needed a means to allow people to know with complete trust that their records had been accounted for in the appropriate books. The solution was the creation of record receipts. Each time an entry was made official in an accounting book the person tied to that transaction would receive an official receipt of the entry. This allowed people to carry proof of witnessing without needing to refer to the book directly. Birth records issue birth certificates, visa departments issue passports, universities issues diplomas. The issuing of official receipts scaled Institutional accounting, without it, centralized large scaled governance would have been impossible.

These receipts work as an isolated extension of the record books. In order for these receipts to be valid they must also be verified and identical with the accounting records, this was accomplished by creating identifiable seals and signatures. These verified receipts allowed people to go to institutions who did not personally have the accounting of a transaction but still trust that the transaction had been previously accounted for. The most obvious example of this is Banks issuing receipts known as money for the official accounting of an equal deposit of Assets.

Double-Entry Bookkeeping

These isolated extensions of the institutionally backed receipts created a mutually agreed upon value that created the circumstance to form markets and initiate commerce. These receipts simply represented a proof of some recorded value, and therefore that allowed that value to pass to spread across time space. People would be happy exchanging real goods for a receipt of value that they know would be accepted by someone in the future for the same value they received it for. Most importantly these receipts held value because they had been properly accounted for and carried unforgeable signatures.

The increase volume of transactions and their growing complexity required merchants to form a reliable systems of managing the record books. Many system came and went but in 1494 Luca Pacioli, who was a friend of Leonardo da Vinci, published a synthesis of colloquial mathematical knowledge that included the accounting system used by many Merchants during the Italian renaissance, known as the double-entry accounting system or more simply Assets = Liabilities + Equity.

Data symmetry determines truth

The core principle demonstrated throughout the entirety of Luca Pacioli's famous treatise was the need to to always seek symmetry and return to balance. Mathematical symmetry held the key to understanding truth. In order for books to be true they would always need to prove symmetry between accounts.

Global Network Accountability

For the last 500 years after Luca Pacioli not much has changed in bookkeeping and accounting practices, until 2008 when a person(s) named Satoshi Nakamoto created Bitcoin and the very first Blockchain database. As the necessary evolution of institutional bookkeeping, blockchain creates a publicly accessible and distributed witnessing system that works by blocks of timestamped information coming together to form a symmetrically balanced chain of information linked to authenticated accounts.

Blockchain replaced institutional witnessing with a network of permission-less peer to peer transactions backed by transparent protocol & system structure. The blockchain becomes the new book of accounts with every transaction being publicly recorded and then verified by transaction receipts. For the first time in Human history humans are able to own and manage their accounts, and create peer to peer transactions that get automatically recorded on a publicly visible accounting record book. Information and transaction accountability can be managed on scale without an institutional control structure.

Accounting of content consumption

Money and banking were created in lieu of accounting and the creation of receipts linked to verified accounts. The next byproduct onvenient byproduct As more and more information gets recorded and stored,

Corporate vs open source. the creation of data consensus

asset exchange marketplace

Matomo the measuring of page viewership analytics, the semantic web and the wiki

ethereum evolves this by the explicit classification of programmable accounts governed by code consensus and external accounts governed by private signatures.

Data must relfect Asset ownership

Moore's law assigns physical dimensions to data

orchestrate three kinds of assets related to data processing in order to obtain the ability to influence society

data processing instruments, relevant contextualized data content, compatable algorithyms that takes advantage of advanced instruments and available data.

History of decision making

decision making is accomplished by an abiity to compute a function of given inputs and produced outputs

the rate at which humans have been able to improve our decision making has been restricted by the ability to transmission information, the density of the information function, and the information quality and resolution.

Moore's law introduced the the idea that every two years the ability to transmit data would double, or improve exponentially, and so would the density of the information being transmitted.