So if you have appl shares on nasdaq how would the proposed system transfer them to your counterwallet and then your bitappl (btsx bridge)? I would think you need to issue totally new assets not found on nasdaq for a long while and maybe one day appl and the likes will see value in using overstocks exchange instead of nasdaq because thats where the trading volume is... It would not be feasible i think to havd something like appl trading on the exchange because of the conversion. I GUESS it poses the general question and a bigger one that what would it take the interbank to trade on a decentralized exchange when they simply dont have to they get all orderbook info others cant see and they wouldnt have these advsntages on something like bitshares... Maybe once big companies like overstock and bigger decide that hey i dont want my stock to be ruined by quant trading bots frontrunning large trades and ruining confidence... And later maybe they will want to settle foreign accounts right there on the same exchange because of lower fees then it might make sense... Long ways away still and id think there is alot of time for either platforms to collaborate or even research how to solve the incentive issues so they are good to go when the big caps start to move in... If they do
If someone is willing to sell their AAPL for cash, Bitcoins or anything else then you can have a bridge. The entity purchases the security from the standard stock market and then sells via the bridge.
It's not really hard to set up. The regulation is the only hard part. BitPay is set up so people can use it and you could do something similar for stocks.
But people may not want to sell their positions to rebuy somewhere else because that is a high transactional cost via spread. I dont think you can bridge nasdaq for one they wont let you. So in essence you are saying nasdaq can be an entry gateway into the overstock exchsnge and thus later on btsx? I doubt nasdaq will give up exiting their system to a competitor doesnt make much sense.
People will pay whatever the fees or costs are for diversification. NASDAQ doesn't have to give up it's system because Bitshares X doesn't compete with NASDAQ. Overstock is competing with NASDAQ.
Bitshares X is in a position where it can integrate with any Gateway including the NASDAQ Gateway. If I had a position of BitAAPL and I wanted to turn it into legal securities then I would send the value to the Gateway where that value would be exchanged for the legal securities which then would be legally transferred to me.
So it would be no different from purchasing legal securities with Bitcoin or cash. The same process could apply to any kind of asset which can currently be purchased with Bitcoin so really the point is to make the process streamlined and do it behind the scenes like how BitPay does it.
Even if you are right and NASDAQ fights against Overstock it doesn't mean NASDAQ will be fighting against Bitshares. Anyone who can sell stocks can sell stocks and they can sell stocks for Bitcoins or cash. So the only difference will be how many processes it takes to get them to sell the stock. BitPay proves that if you make the process transparent and streamlined then merchants and customers (stockholders and buyers) need not know Bitcoin, BitUSD, or BitAssets are involved at all.
This would make Bitshares X a virtual exchange which exists as a parallel market rather than an actual securities exchange like NASDAQ or the Overstock idea. This means NASDAQ and Overstock have to go through legal processes, take on legal risks, while we do not. The regulation for us would happen if we want to exit the Bitshares X ecosystem and make our virtual assets into legal assets.
Answer this: If you had millions of dollars worth of Bitshares X because you were a smart investor so that now you can cash out and be considered a "sophisticated investor", own the legal assets, have the legal protections, you wouldn't diversify out? I think there will be demand to diversify out once the market cap reaches a point where some people trading these BitAssets will want the real thing.
I think it would be more useful for smaller companies. Penny stocks. Think BitShares Me. Bigger, publicly traded companies are subject to way too many securities restrictions and you are right that the exchanges will not allow them to float stock elsewhere. Patrick Byrne doesn't have the patience for dealing with that and I'm not sure why publicly traded companies would want this anyway. If they could figure out a way to do bond notes, that would be another possibility, but it might get into lending also. Whatever they try, this will be squarely in the sights of regulators.
They have the money to try it. The GPL wasn't guaranteed to work either but it was tried and now we have free software.