Implementing Triple Entry Accounting System with π Account on Block-chain Protocol

Abstract

Lao Tzu (“ 老子 ”) described in the Tao Te Ching (“ 道德經 ”) that “The Tao begat one”. One begat two, Two begat three, and “three begat the myriad things”. “Three” is a magic number in Chinese society, and we believe that “triple”-entry accounting can also magically connect to the world. We have verified that all accounting activities can be recorded on blockchain through the triple-entry accounting design, and transaction with layer-by-layer journal entry could connect all economic activities of the world each other. In this paper we redefine the term “triple entry accounting” with blockchain protocol and proposes new π-account concept to visualize and analyze the journal entry of accounting book, and gain full picture of economic activity on blockchain. We also introduce hierarchical deterministic structure on blockchain protocol mapping into account book structure in compliance with international accounting standard. At the same time, we have verified that the distributed ledger technology has completely implement both internal and external straight through processing. In the near future, we will have a visual tool to exam the results of our research through data structure of triple-entry accounting.