April 16, 2025
Defining Data Accounting
By Tim Bansemer, CEO of inblock.io
While financial accounting has been a global standard for centuries, data still lacks an equivalent systematic verification framework. This gap creates serious trust challenges: manipulated or forged information requires substantial time and resources to verify, and organizations face high costs when exchanging sensitive data across boundaries.
What Is Data Accounting?
Data accounting is the systematic process of ensuring data's integrity and history by linking it to secure digital identities (accounts), using computer checks to build trust without middlemen. Technically, it involves cryptographically hashing data content, signing hashes with public keys, and timestamping results to registries.
A Three-Dimensional Framework
The article proposes three interconnected namespaces that together form the foundation of data accounting:
- Data - Unique hashes that identify content
- Account - Public keys that establish identity
- Time - Cryptographic timestamps that anchor events
Together, these create a three-dimensional coordinate space where each dataset occupies a unique position, enabling stable graph structures that link data revisions into verifiable chains.
Beyond Blockchain
While Bitcoin and Ethereum demonstrate fully trustless, fully accounted systems, blockchains remain unsuitable for general data accounting due to scalability constraints, high costs, and privacy limitations. A practical solution must work at the scale of everyday data exchange.
The Aqua Protocol
This framework has been implemented in the Aqua Protocol, deployed on Ethereum since April 2021. The system demonstrates applicability across identity, access control, and document authentication use cases. Cryptographic data accounting reduces collaboration costs, protects against tampering, enhances sense-making capabilities, and enables peer-to-peer data governance without intermediaries.
Read the Full Article
The original article was published on Substack: Defining Data Accounting