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What is double-entry accounting?

Double-entry accounting tracks transfers between accounts. It records the amount of the transfer along with where the amount came from and where it goes.

Why does double-entry accounting matter?

Double-entry gives you something stronger than raw data consistency, namely financial consistency, by acting as a financial error correcting code to keep the books balanced.

It does this just like Newton's Third Law—for every movement of money into an account, there is an equal and opposite movement of money from a different account. This ensures that money cannot be created or destroyed, but is merely transferred from one account to another, just like the law of conservation of energy.

Because it's so simple, it's also highly composable. And so it gives you tremendous flexibility to model your business, even as product lines come and go, or as your business evolves. We have often seen organizations rediscover double-entry accounting over time, requiring painful database migrations as they evolve toward double-entry.

Double-entry accounting is the language of business, the world over. It's the tried and tested schema for representing any kind of business, any kind of transaction. While you can think of double-entry as the perfect way to describe any kind of financial state transition, it's also the perfect way to track and “account” for anything, any kind of business or real world event, not necessarily financial.

"What advantages does he derive from the system of book-keeping by double-entry? It is among the finest inventions of the human mind; every prudent master of a house should introduce it into his economy." — Goethe, 1795

Why would I want a dedicated distributed database for accounting?

You can do accounting with any database, it's true. Existing companies use PostgreSQL or MongoDB or any other general-purpose database. However, this leaves significant work for the developer and operator. You must figure out high availability, fault-tolerance, and consistency. You must figure out how to scale as you add users and transfers. And of course, you must re-implement all the double-entry and ledger primitives, which are subtle to get right!

TigerBeetle is focused on just one thing: accounting reliably at scale. TigerBeetle does double-entry accounting and as a database has only two data types: accounts, and transfers of money between accounts. TigerBeetle also goes beyond typical ledgers in that it's not only great at tracking money within a system, but has a built-in two-phase commit coordinator to help you track money as it moves between systems—even different companies that have entirely different ledger architectures! It has built in consensus for high availability, and recovery mechanisms that surpass most databases today.

Additionally, TigerBeetle was designed precisely for high performance accounting. We've seen teams struggle to reach on the order of 1,000s of transfers per second when they've built on PostgreSQL and MongoDB. The reason is that the nature of double-entry is contention on either the debit or credit side. For example, a business may have a few million customers but only a few bank accounts. You can imagine that processing transactions for these customers will contend for row locks when touching these bank accounts and deoptimize the ability of group commit to amortize disk flushes. With these challenges in mind, we've designed TigerBeetle to achieve 1,000,000 transfers per second on commodity hardware.

With financial data, it's also important not to lump it together with general purpose data. The risk profile is different: retention policies, compliance requirements,and privacy concerns. In auditing the term is “separation of concerns”. And the performance characteristics, auditability, and availability requirements are also dissimilar from general purpose data. In much the same way that you would store large objects in an object store, or streaming data in a queue, you really do want separation of concerns for your financial data and a mission critical database to store it.

What is two-phase commit?

This is a reference to the two-phase commit protocol for distributed transactions.

Single-phase transfers post funds to accounts immediately when they are created.

In contrast to single-phase transfers, a two-phase transfer moves funds in stages:

  1. First, the pending transfer reserves funds. While reserved, they cannot be used by either the payer or payee.

  2. Later (in a future "commit", i.e. a separate request), the application creates another transfer — either a post-pending transfer or a void-pending transfer. The former moves all (or part) of the reserved funds to the destination; the latter reverts them to the original account. The pending transfer's amount is reserved in a way that this second step will never cause the account's configured balance invariants (e.g. debits < credits) to be broken.

How does TigerBeetle fit into my architecture?

TigerBeetle is a ledger. It is not designed to be a general-purpose metadata store. But there is no single correct way to use TigerBeetle.

Here is an example of how you might integrate with TigerBeetle in a payment system.

You might keep account metadata in your existing database (say, PostgreSQL or MongoDB). Then create an account in TigerBeetle with a random id mapping it back to the account with metadata in your existing database.

Then as you need to process transfers between accounts, you store those transfers in TigerBeetle.

TigerBeetle comes with built in business logic like accepting/rejecting related or linked transfers atomically as a unit, rejecting transfers if the accounts involved would exceed their net debit or credit balances, and other business logic that you can toggle.

When you need to report on transfers, you'll use our query API. Queries are currently limited to lookups by account ID or transfer ID. However, we're already indexing all fields and a rich relational query engine is in the works.

You will also be able to export all historic accounts and transfers.

Why is TigerBeetle written in Zig?

Coming from C, it's the language we've always wanted—OOM safety, bounds checking, rich choice of allocators (and test allocators), checked arithmetic, explicit control flow, explicit control over memory layout and alignment, no hidden allocations, no macros, first class C ABI interoperability, and an insanely good compiler. Comptime is a game changer.

We realized that our roadmap would coincide with Zig's in terms of stability. We wanted to invest for the next 20 years and didn't want to be stuck with C/C++ or compiler/language complexity and pay a tax for the lifetime of the project.

Is TigerBeetle ready for production?

Not yet! TigerBeetle was started in 2020 and you're watching us build the plane while we're flying it. We are working with design partners and TigerBeetle is being used in corporate "lab" settings. Likewise, we encourage you to try out TigerBeetle, follow our development, and give feedback!