Banks rely on ledgers, and the most fundamental aspect of blockchain is also ledgers. But there is a fundamental difference between this ledger and that ledger. Today's banks face the same choice as newspapers/magazines at the beginning. They either embrace the Internet and become new Internet media, or stick to paper media until few people subscribe. The arrival of stablecoins further strengthens this trend. On the surface, we can see that many banks are starting to adopt encryption technology. If we look at it from the bottom level logic, why will encrypted ledgers eventually replace bank ledgers? This involves accounting bookkeeping methods. Traditional banks mainly adopt the double entry bookkeeping method, while blockchain has introduced the triple entry bookkeeping method. The double entry bookkeeping method originated in Italy during the Middle Ages and is the general accounting basis for most countries around the world. It requires that every transaction, such as deposits, loans, and transfers, must be recorded in equal amounts in at least two related accounts simultaneously to ensure two-way verification of each transaction. For example, if one party is a "debit", it will always correspond to the associated "credit". This ensures that assets=liabilities+equity, achieves balance, and facilitates auditing. When you deposit 1000 yuan into the bank, the bank will record: Debit: Cash 1000 yuan; Loan: Customer deposit of 1000 yuan (liability subcategory). However, traditional double entry bookkeeping relies on independent bookkeeping by all parties, and there is a possibility of tampering and inaccurate reconciliation. For example, a person's money in the bank is essentially a number on the bank's ledger. In theory, banks can modify this number, and people can only trust the bank's brand/third-party audit/supervision, that is, they need to believe that the bank does not do evil and trust that third parties can audit and supervise. For example, in the 2001 Enron scandal, a double entry accounting loophole was used to falsify accounts, leading to bankruptcy. Speaking of double entry bookkeeping, is there a single entry bookkeeping method? There really is, the single entry bookkeeping method is a journal that only records one transaction. In contrast, the double entry bookkeeping method is more rigorous. So, what are the differences between the three accounting methods of blockchain? The triple entry bookkeeping method adds a "third entry" on the basis of double entry bookkeeping: a shared and tamper proof record. And this record can currently be achieved through a blockchain that does not require trust or intermediaries. This is the benefit of distributed ledger. This third entry is often an encrypted signed receipt or timestamp block, which requires network consensus to verify in order to prevent tampering, such as BTC's PoW mechanism and Ethereum's PoS mechanism. This method solves the trust issue of double entry bookkeeping, it cannot be tampered with, and there is no problem of inaccurate reconciliation. The so-called three formulas mean that transactions can be trusted and audited through blockchain as a "third-party" arbitration. For example, Ethereum is essentially a distributed ledger, where each transaction is recorded in the sender and receiver accounts (similar to debit/credit in double entry bookkeeping), and there is also a network consensus mechanism (PoS mechanism) to generate an immutable "third entry": a timestamp block with encrypted signatures. The three formulas essentially create immutable records in blocks, and their existence is more efficient than double entry bookkeeping, without the need for intermediaries to coordinate management and reduce audit work. In plain language, duplex refers to each party writing a copy; Three types plus one "smart lockbox", automatically stamped and witnessed across the entire network. Cannot be tampered with, audit in seconds. Ultimately, going live on the blockchain for banks means changing their double entry bookkeeping method and moving towards triple entry bookkeeping. Once privacy issues (ZK certification) and compliance issues (KYC) are resolved, going live on the blockchain for banking services can greatly improve efficiency, and banks no longer need to maintain large and outdated financial systems. Instead, they can switch to a brand new, non crash encrypted on chain system. Embracing or marginalizing is one of the most important issues that banks and other financial institutions will face in the next two decades.