Estimated reading time: 6 minutes, 1 second
Looking for an accounting solution that isn’t completely centralized? Well, Fizcal is bringing in the blockchain. In this episode of ICO or NO, Jeremy covers the Fizcal ICO, an ICO that hopes to provide a sustainable accounting solution by incorporating blockchain technology. Does the product add up? Jeremy gets you up to speed on everything you need to know about the Fizcal project!
What is Fizcal & what problem are they aiming to solve?
Accounting has been a historical issue that has faced even the earliest of societies. When people try to organize into a community, they usually have to establish trade. It was simply too difficult to create all of the products that you needed to live. So you specialized in something, made extra, and use what you don’t need to trade for things that others specialized in.
While trade solved one problem, it created another. Each transaction has a credit to one person and a corresponding equal debit, and these numbers have to balance out. For every input, there has to be an equal and opposite output. For example, if I buy a movie ticket for ten dollars that transaction has to be recorded and recognized that I am giving up the ten dollars, while the box office is gaining those same ten dollars. Both of our books reflect this. It seems like a huge concept, but double bookkeeping is how our cash and credit systems both work. We couldn’t have banking or a monetary system without it.
However, there are some issues with double entry bookkeeping. Currently, all transactions are restricted to centralized ledgers run by those processing the transaction. Since they have this control, conflicts of interest may very well occur, and some records of transactions may be manipulated. Ever heard of someone fudging the books? It is definitely something that happens, as does tax fraud and other unethical practices that are associated with bad accounting.
Fizcal’s answer to these problems is something they are calling “triple entry bookkeeping.” Instead of the old method of keeping separate records in localized ledgers, companies can write their transactions directly into a joint distributed register, creating an interlocking system of enduring accounting records. So instead of just having the payer and and those receiving funds recording their records separately, by incorporating blockchain technology, a third ledger containing a copy of these transactions is recorded to the blockchain. This transaction cannot be manipulated and is permanent. It also creates an independent reference in case the two party’s books don’t match up.
This could completely change the way auditing and record keeping occurs. If you implement triple entry bookkeeping as the standard, there is a lot less room for fraud if there is that third ledger being maintained where everyone can see.
What are the market conditions facing the Fizcal project?
A huge part of the Fizcal platform is their mobile app, which is currently being developed and will be available for both iOS and Android. The app isn’t out yet, but Fizcal has listed its features, and they include:
- facial recognition for security,
- a way to automatically keep track of your income versus expenses,
- a functioning loan market,
- buying cryptocurrency,
- and bank reconciliation.
It’s an absolutely huge industry, and I haven’t seen many accounting solutions on the blockchain. But I do know for a fact, the industry leaders are making it a point to make sure that their clients are informed about blockchain technology. Deloitte, Ernst and Young, their message has been loud and clear. Get ready for blockchain technology because it’s going to be disruptive, and it isn’t going to go away.
The hurdle of the market is getting accountants to use their app, and it’s always an uphill battle getting companies to implement new practices or software. However, Fizcal aims to make their software easier to use than current accounting solutions, and adoption could change the way current account practices occur.
A big part of this would be integration into a tax system and legal recognition, and for that to happen the government would likely have to accept these triple entry accounting practices. Not saying this is impossible, but for that to happen, a government would have to legislate some new accounting framework. This means the government giving up control and basically accepting blockchain technology. I’m not sure if governments are there yet. That’s a tall order here in America, but places with less legislative gridlock that could fast track a reformation of their tax plan to include the blockchain.
Is this feasible? Yes. However there is no guarantee that the necessary steps will be taken in order for the implementation of this technology to occur in the accounting sector.
Who is the team behind the Fizcal project?
The team is led by Ishmael Rahim, who has lots of experience in the tech industry and has worked for several significant businesses. Beyond that, the team looks like any other inconspicuous team. No major pros, no major cons. Just one small criticism, and this may be nitpicking, but their team page on their website did not list the LinkedIn profiles for their team members. Just a small thing!
What is the design of the Fizal ICO?
This is an interesting ICO structure for sure. The price of the tokens and the bonus you receive vary significantly based off of when you participate in the ICO. The ICO is divided into ten rounds. The total target, or cap, the ICO is looking for is set at $50 million, and each round will conclude once $5 million is reached, and then the next round starts.
The first round will be priced at 18 cents per token, but you will receive an 18% coin bonus. Once the $5 million is raised for that round, the price of the tokens will increase, and the percent coin bonus will decrease, incentivizing those considering participating in the ICO to get in as early as possible. The last round contains no bonus, and each token will be sold at 36 cents — double the price of the first round.
The presale will start on October 16th, 2017, and the ICO will start following that.
We’ve already discussed how the ICO will progress, there is that hard cap of $50 million, showing some restraint on the part of the Fizcal team, and let me tell you, that’s refreshing to see in an ICO, even though $50 million is still an insane amount of money.
So there you have it! That’s our a review about the Fizcal ICO. Definitely has an uphill battle for implementations, but then again, what ICO isn’t going to face that. It’s definitely a cool concept, and if they can achieve the transparency and efficiency they are aiming for, it could very well change tax systems around the world.
Fizcal ICO details can be found here.
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*Patent Maybe Pending