Chapter 15 - Emerging Technology: Blockchain and AI

Blockchain

An internal data structure of transactions in the system is packaged in blocks and chained together

Benefits of Blockchain

• No middleman

• Less fees

• Faster

• Allows people who do not trust each other to work together

Blockchain Criteria

1. Distributed and decentralized (no single authority and many participants)

2. Consensus (transactions are validated by participants)

3. Immutability (cannot be altered)

Blockchain - Proof of Work

• Must use solve problems for access

• Requires either a lot of computer power or many bad actors

Blockchain - Proof of Authority

Few identities are known

Blockchain - Proof of Stake

Cryptocurrency held as collateral

Types of Blockchain

1. Private - NO public acess

2. Private - controlled by one organization

3. Consortium - multiple organizations, can have private channels

Challenges with Blockchain

1. Concerns with speed, confidentiality, governance

2. Integration with existing technology

Blockchain impact on Audit and Assurance

• Continuous audits

• Future roles and audit tasks

  • make sure blockchain and smart contracts comply with laws

Machine Learning

• Subset of AI

• Models learn from training data/cases

• Makes predictions

Neural Networks

• Subset of machine learning

• Inputs go through one node

Deep Learning

• Subset of machine learning

• Goes through multiple nodes

• More complex inputs and outputs

Natural Language Processes

Understand language and text to communicate