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Could Blockchain-Based Fractions of Digitized Stocks Revolutionize Markets? (venturebeat.com)
An anonymous reader quotes VentureBeat:
Despite being championed as a decentralized form of money that puts individuals firmly in control of their own wealth, cryptocurrencies mostly remain the preserve of the super-rich and the super-nerdy. 1,000 Bitcoin wallets currently hold 35.18% of all Bitcoins, for example, and only a select few computer scientists understand the inner workings and machinations of blockchains... Such inconvenient truths undermine the oft-repeated claim that blockchains will democratize wealth, largely by lowering barriers to entry in financial networks and by preventing central banks from devaluing money via inflation. Nonetheless, this prediction has moved one step closer to realization in recent months, with the emergence of tokenized stocks....
In contrast to a new cryptocurrency designed specifically to conform to securities legislation (i.e. a security token), tokenized stocks provide digitized versions of existing shares in established companies, such as Google, Facebook, or Apple... [W]hat's interesting and potentially radical about such digital stocks is that they permit customers to buy fractions of stocks in big companies. This will open up trading to millions of people who wouldn't otherwise be able to afford buying shares in Apple or Amazon...
One significant side effect of tokenized stocks is that they could change the fundamental nature of global stock markets and how they behave, by opening them up to round-the-clock trading... It's interesting to note that some commentators believe the growth of round-the-clock exchanges might, in the long term, result in the emergence of a single global stock market.
The article also notes that it will be cheaper to trade digital versions of stocks, "since person-to-person trades circumvent the need to go through a broker...
"They look set to make the financial world more accessible to millions people, in addition to having serious implications for global markets."
In contrast to a new cryptocurrency designed specifically to conform to securities legislation (i.e. a security token), tokenized stocks provide digitized versions of existing shares in established companies, such as Google, Facebook, or Apple... [W]hat's interesting and potentially radical about such digital stocks is that they permit customers to buy fractions of stocks in big companies. This will open up trading to millions of people who wouldn't otherwise be able to afford buying shares in Apple or Amazon...
One significant side effect of tokenized stocks is that they could change the fundamental nature of global stock markets and how they behave, by opening them up to round-the-clock trading... It's interesting to note that some commentators believe the growth of round-the-clock exchanges might, in the long term, result in the emergence of a single global stock market.
The article also notes that it will be cheaper to trade digital versions of stocks, "since person-to-person trades circumvent the need to go through a broker...
"They look set to make the financial world more accessible to millions people, in addition to having serious implications for global markets."
Long answer: fuck, no.
Instead of the whole tulip, we will sell you individual petals. Bitcoin tulips have 100 million petals each.
No of course. But I already invented and implemented several long tail solutions that truly revolutionize markets so no way they could beat it! :)
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Remember?
This will just make corporations even more obsessed with ever growing profits. Likewise, it will open up new pathways for insider trading and stock manipulation through self trading.
Krypto kurrency is for suckers. Make 'murika Greedy Again.
You can buy fractional shares of stock today. This claims to save some broker fees, but that has nothing to do with blockchain and sensible (small) investors don't trade stocks very often anyway.
...bollocks.
Then we will all win at Buzzword Bingo!
Why does every single article editordavid and msmash publish here, and their summaries, sound like an idiot wrote them?
After the next recession and tech bubble bursts all of this nonsense will be gone. Until the next one.
Quit it with the questions in the headlines. And the buzzwords in the headlines. And the buzzwordy questions in the headlines.
If you have a case to make, make it. But be sure it's not an obviously buzzword-laden clickbaity vapid "case" whose only answer is going to be "only time will tell, but probably not". How stupid do you think we are, EditorDavid? As stupid as the stupidity of all current slashot "editors" combined?
They happen all of the time with dividend reinvestment into an existing position. Controlled inflation is a necessary part of managing a money supply. A big reason why Bitcoin and other crypto tokens suck at actually being money, although certainly not the only one, is due to the fact that they were setup by persons who did not understand the value of centralized banking and why it's a necessary part of money supply stewardship. Instead, they recreated a speculative asset that pays no dividends or coupons and that nobody uses for day to day transactions, rather like gold and arguably even less convenient. In fact, the best use of crypto tokens so far has been to enable criminal transactions. Perhaps that was what the creators really had in mind all along. Blockchains have proven themselves unable thus far to offer serious competition to the US dollar. How can people ever think that they will challenge the existing structures of the securities markets? That's some kind of crazy, but the Blockchain fanatics remind me of nothing so much as religious fanatics. Those people have clearly drunk the Kool-Aid, but wealthy people didn't get that way by being stupid. If ordinary people can see through the Blockchain scam, then Wall Street certainly can too.
But tech companies usually don't pay them. Voting will also be an issue.
this is exactly why slashdot should stop reporting on something that has nothing to do with technology and everything to do with ponzi-scheme economics for the super rich.
So far we've heard that blockchain-based solutions will let us:
- Track shipments
- Buy fractional shares
- Buy things without cash
But everything on that list is already covered by easier/cheaper methods (that also have smaller carbon footprints). Other than buying drugs/hacking/childporn from a distance...will there ever be anything POSITIVE we can do with this technology or is this stuff basically just digital Esperanto?
Buzzword bingo it is!
How long does it take? Do I have to wait around for a day or 5 to actually execute a stock trade?
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Here's a good response...
No thanks. Relearn the lessons again, youth.
Blockchain has some great uses, but it isn't the solution for every stupid idea.
1 - Stocks go from being owned based on a ledger to being "barer". If you own the stock on the block chain, you own the stock. This means that if someone hacks your computer he can own your stocks. Much easier than trying to get ownership of your stocks via Vanguard or Fidelity, even if they get your password to those accounts.
1a - If someone owns the ledger, they can own all your stocks. I'll trust Vanguard or Fidelity. Thankyouverymuch.
2 - Trading stocks currently has a cost and a tax implication. Cost may go down to zero. Selling a stock without getting a tax implication is going to get the IRS on your case. You don't want their attention. Al Capone sure didn't.
3 - This will promote more trading for stocks. Trading stocks versus a 'Buy and Hold' strategy loses out the vast majority of the time. Market timing doesn't work in the long run. The number of fund managers that can beat the market yearly for a decade or more is vanishingly small and cannot be predicted in advance. Individual investors would be much better served by investing in low expense ratio total market index funds.
Help! I'm a slashdot refugee.
The original bit coin is failing badly because the processing cost of a small transaction is larger than the value of the transaction. Attempting to apply block-chain based fractions to micro-stock trading is going to face the same barrier.
The authors need to do some serious studying and get out of LOL land.
Stock shares are quantized because the company wants them quantized. They are free to change the multiplier with a stock split or join.
But if you have large priced shares you can influence who buys them and sometimes you wnat institutional buyers rather than whimsical day traders. Likewise if they are voting shares you prefer, usually, institutional voters over people who vote randomly.
Some drink at the fountain of knowledge. Others just gargle.
How about bringing back slow trading and dividends. People investing in a company because they think it will succeed or because they want it to succeed instead of "investing" for a microsecond to earn $0.003 on a multi-thousand dollar transaction?
... at the moment. Fraud abounds, insecurity is rampart, major problems are unsolved. This half-baked idea would never have gotten big, were it not for the widespread greed and stupidity in the human race. For the moment, the idea has failed. It may get a revival when major problems have been solved, but that will take some time.
And unlimited, direct stock-trading? Are you serious? There is a reason major stocks are only traded at exchanges. Also, small-time investors are basically the victims that provide the profits of the large ones. Hence I can understand the desire to separate even more fools from their money, but a good idea it is not.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
It used to be that stocks paid dividends to shareholders. This rate was above and beyond interest on bank deposits, who loaned the money. There was extra risk, but there was also extra reward.
Fast forward to today and stocks are essentially a fun and lucrative gambling market for those so inclined. Money is made from trading and arbitrage, not dividends. The difference between a Google Class C stock share (non-voting, non-dividend-paying) and a unit of cryptocurrency is minimal, other than the class C has some favorable tax treatment. Dividends as a portion of share price is similar to bank deposit interest rates - tiny, with no risk premium, in chance that dividends are even paid.
This creates another market gamblers can play in. It will be dominated by the inside players with dedicated computing setups, and superior information and intelligence, like the existing financial markets. I don't know that it creates anything of value. It's a new gambling game. Central bank prints money, injects it into Wall Street, and it'll wind up here, and in other financial markets. Direct participants become richer, people with 401K's feel richer. I don't know that it will improve health care, education, housing, improve the standard of living of non-participants, or otherwise spark technological improvement.
So hackers/malware can easily/instantly steal stocks too (not just cryptocurrency)?
No thanx!!!
just gave me a heading reading it...
Linearity is good, and shares traded (effectively) as a real instead of an integer would probably be a good thing.
But who votes the share?
If a blockchain aftermarket is not endorsed by the corporation, then the shares get voted in the same old way: as integers.
If the share (or share block) is voted by majority within the share, that just makes things less linear than they were before. (Now a person with the Levi stake—0.501—is essentially exercising a voting power that is twice his or her economic exposure).
[*] Once upon a time, Levi 501s were the biggest meme since Woodstock, but I guess they died and went to Etsy.
Or you could solve the majority voting problem with employ stochastic dithering: a fair cryptocoin is flipped—on the blockchain almost certainly—so that every partial vote has an equal, pro-rated chance of voting the whole share (or share block). How the share's registered entity is compelled to recognize the internal coin flip (and vote accordingly) is another small problem to solve.
With stochastic dithering, you can make a lot more problems quasi-linear than ever before. The fair voting problem under a collective coin flip is almost impossible to implement without something like a blockchain to establish collective verification. Many, many things in this world would function better if the governance regime were closer to linear (non-linearity = more politics, almost assuredly, every time).
I tend to regard the stochastic nature of stochastic dithering is a feature, and not a bug, as it prevents micro-planning down to the last penny: the problem tilts from "how can we twist one last arm?" to "how can we twist one more arm, to reduce the lingering margin of uncertainty?". The first algorithm is accomplished by aggressive divide and conquer (henchman tactics, best pursued by being more of a dick), the second algorithm is accomplished by bulk persuade (cogent advocacy, best pursued by being less of a dick).
Cryptocurrency bachelorhood: mostly worthless.
Crytocurrency wedded to stochastic dithering: finally worth welcoming into the family in a big way.
Bright-line systems with their non-linear winner-take-all politics are potent dickhood incubators. Moths have never flocked to a flame along the pure, minimum-time geodesics of dicks to a bright line.
Fees are for stock trading are already around $5. Also, what's the point of owning less than 1 share of FB? Both stocks trade around $170. If you can't afford $170 for a stock, you really shouldn't be in the stock market. Also, most stocks aren't $170, they'll often split the stock before its gets too expensive. Apple last did this in 2014.
The other obvious problem is tax regulation. Brokers are required to report on capital gains. Is this fly-by-night company, based out of freaking Cyprus (A massive red flag for a shady company) going to provide that? What happens if this fly-by-night, Cyprus company goes bankrupt? Any shares you own go bye-bye.
This whole thing stinks to high heaven of massive fraud.
Congratulations. You're re-invented the mutual fund.
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
Bill got caught lying 12-25 times repeatedly stating "Blood plasma is sterile" and then later that "The Chinese Govt does not directly censor Chinese citizens" and other absolute bullshit head-in-ass retard-level lies. You're not trustworthy.
You are not a source of information that anyone should or even could trust, knowing your dishonest history. Sorry. That's what accountability means when you get caught lying repeatedly, over and over, even after directly corrected.
You're a liar, Bill.
Google Limor Patarkazishvili: the owner.
Bill got caught lying 12-25 times repeatedly stating "Blood plasma is sterile" and then later that "The Chinese Govt does not directly censor Chinese citizens" and other absolute bullshit head-in-ass retard-level lies. You're not trustworthy.
You are not a source of information that anyone should or even could trust, knowing your dishonest history. Sorry. That's what accountability means when you get caught lying repeatedly, over and over, even after directly corrected.
You're a liar, Bill.
It's pretty light on details, and the mitigation strategy to avoid the risk of ending up out of pocket (without shares or money) when buying or selling isn't explained unless i've managed to miss that in the article. The real complexity of making chains of transactions work out is through a clearing counterparty (CCP) and it's not clear how the equivalent functionality is provided by blockchain (as far as I can see, it can't be).
Next question.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.