Blockchain has recently become a topic of major concern to internal auditors. And while there is a lot of hype around blockchain, many internal auditors are just starting to ask basic questions: What is it? What can it do? How can it be used? Is it really as unhackable as promised? Although the hype is well founded—many big companies are already investing millions in research—we’re probably at least a few years from widespread use. That said, now is the time to get involved, get educated, and prepare for the near-term transition into this new technology.
To that end, Jim Pelletier, vice president of professional and stakeholder relations for the Institute of Internal Auditors recently wrote a primer to answer basic questions about blockchain, including, what is it? He answers that “blockchain is a transaction record, peer to peer, that provides transparency, pseudo anonymity, and irreversibility. A computation provides proof that a transaction occurred and then a computer locks it in. The transactions are saved in blocks, and a new block is appended or “chained” to all of the pre-existing blocks (creating a chain) when it becomes full.”
