Impact of Block Chain in stock trading

in #blockchain7 years ago (edited)

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Blockchain technology is being explored by Citi, Credit Suisse, and JPMorgan. R3 a firm by these corp is working towards implementing blockchain technology in conventional banking. Microsoft has also teamed up with this conglomeration of banks to provide support and services for R3’s blockchain labs. The potential for blockchain technology in the banking sector is huge. Blockchain will be useful in trading anything from remittances to securities exchanges.
http://bankingonblockchain.com/uncategorized/applying-blockchain-to-clearing-and-settlement/

Trading security
Nasdaq has been at the forefront of the blockchain revolution. At the turn of 2015, Nasdaq unveiled the use of its Nasdaq Linq blockchain ledger technology to successfully complete and record private securities transactions for Chain.com—the inaugural Nasdaq Linq client. Nasdaq and Citi announced an integrated payment solution using a distributed ledger to record and transmit payment instructions based on Chain’s blockchain technology. The technology overcomes challenges of liquidity in private securities by streamlining payment transactions between multiple parties.

http://www.nasdaq.com/article/how-stock-exchanges-are-experimenting-with-blockchain-technology-cm801802

The interesting aspect of about Clearing and Settlement is that the current industry structure is dominated by centralising institutions: central banks, Central Counterparty Clearing structures, Central Securities Depositories (CSDs) and centralised collateral management systems, such as the ECB’s Correspondent Central Banking Model (CCBM). Yet blockchains are meant to be decentralised, so how can this work in a centralised operation? Well it can because most of the developments are being run as permissioned or double permissioned networks by these central operators, on behalf of their markets. Banks and stock exchanges globally are working with blockchain start-ups, led by people who have been immersed in these market spaces, to realise this dream of billions of dollars of savings.

Meanwhile, there are quite a number of start-up companies that are leading the charge to create shared clearing ledgers with Digital Asset Holdings and R3CEV at the forefront. They are not the only ones though as there’s also SETL, T0 (Overstock), Clearmatics, Symbiont, itBit, Colored Coins, Tradeblock, Epiphyte and more. This is not surprising as when we say Clearing and Settlement, there’s a lot to clear and settle and it’s not just over here, but it’s everywhere. European Clearing and Settlement of equities, derivatives and more; American Clearing and Settlement of equities, derivatives and more; and Asian Clearing and Settlement of equities, derivatives and more. Then there are different ways of doing Clearing and Settlement of equities, derivatives and more. You can do it on an Erethreum blockchain; a Ripple blockchain; a HyperLedger blockchain; and even the Bitcoin Blockchain (if you want to clear and settle bitcoins).

https://thefinanser.com/2016/08/applying-blockchain-clearing-settlement.html/

Having discussed this, I feel there is a fight going on here, on onside there is centralized services while block chain itself is decentralized but for effective use of it, we may have to meet in the middle.. I will explain it in another blog. This is where
companies like https://chain.com/ have an advantage!!!
My view is Hyperledger and private Ethereum block chain will lead enterprise market (B2B)
and others will be a mix of everything including graphene based block chain

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I am looking at trading algorithm and I realize most of block chain application talked about is applicable to settlement, But I a wondering there can be trading algorithm derived with the help of block chains...Already decentralized prediction markets like Augur and decentralized voting system exist, then why not make use of these approaches to trading as well

augur.png

Credits given to image owners

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