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One of the things that the blockchain industry will revolutionize will be accounting and finance.
Due to the fact that smart contracts may be in the same blockchain system, and that many personal, commercial, and governmental activities will be mediated by dapps, the opportunity for continuous cash flows emerges.
Today, cash flows are a series of discrete sequential steps, divided in intervals. For example, when a sale is done, then a payment is received, then it is booked, then the money is used to pay for expenses, and then there is a general end-of-period calculation of how much was left over.
All these steps have risks and delays because they may occur in different systems, incur in mistakes, and some of the entries may take longer than others.
It is very likely that all these risks, delays, and formats will change radically with continuous cash flows.
Continuous cash flows means that instead of having entries move in sequential steps, with risks and delays, and booked in set intervals, that they may become either faster or simultaneous, reducing entry risks, and they may become real time instead of having time restrictions and reporting schedules.
For example, a sale, booking, payment of expenses, and calculation of surplus could be done either faster and continuously on a sale by sale basis, or simultaneously as the transactions occur.
Continuous cash flows means that instead of having two parallel processes, cash management and accounting, we will have them merged in a continuous stream of entries that will move the cash, produce the reporting information, and then execute the transactions that result from that reporting.
Cash flows will become constant and real time from end to end.
Ethereum Classic is composable, which is a very important quality.
Composability means that complex multi-dapp, multi-provider transactions may be performed in single executions. This is possible because in ETC all accounts, balances, and decentralized software programs are inside the same integrated system, therefore all components and entries of multi-dapp transactions may be received, verified, and executed at once.
If personal, commercial, and governmental activities will be mediated by these dapps in the same integrated blockchain, then composability enables faster or simultaneous book entries from end-user to end-provider, constantly, reducing risk, and eliminating the need for separate informational schedules with preset intervals and delayed reporting.
Self employed persons: Self employed individuals usually receive income from their clients, organize this information, and then pay taxes, expenses, and providers in separate transactions and moments. With continuous cash flows, they will receive payments from sales, and bills and taxes will be calculated, prorated, and paid immediately.
Small businesses: Similarly, small businesses, will receive payments for their sales, and then their expenses, providers, and even employees will be paid on a continuous basis in real time.
Large corporations: Large corporations will not only use continuous cash flows to receive payments and pay all constituents continuously, but will also significantly shorten their typically quarterly reporting schedules, or even make them continuous as their complete results will be live and transparent on the blockchain.
Non-profits: Non-profit organizations will receive payments from donors and simultaneously execute their budget, sending payments or grants to their beneficiaries in real time. All this will be done while enhancing transparency so that board members and donors will see the reported activity continuously, more or less like checking a block explorer.
Governments: Transparency will be the name of the game for governments. Not only will governments receive tax revenues and pay government employees, agencies, and programmes continuously, but the budget and cash flows will be visible by the public. Corruption will likely be significantly reduced under these circumstances.
Endowments: Endowment funds will receive donations and simultaneously allocate them to planned investments, which will be visible by constituents, and, similar to non-profits, budgeted payments to beneficiaries will be continuous and transparent.
Securities: As securities are promises of future cash flows, these will be structured and represented by smart contracts more or less like spreadsheets but live on the blockchain. As the scheduled payments occur, the dividends or interest will be paid to securities holders simultaneously.
Capital markets: With composability, all the settlement delays and risks associated with trades will be practically eliminated. For example, when a complex multi-party trade occurs that includes a margin loan, the purchase of an assets, and the sale of another, all the components of the trade will be executed simultaneously, and the final settlement to all parties of the tarde will be finalized in 13 seconds!
Thank you for reading this article!
To learn more about ETC please go to: https://ethereumclassic.org