nasdaq to use bitcoin technology

[cylonmaker2053]

@Helikopterben The premise of a blockchain is not decentralization it is information symmetry

No.  The purpose of a blockchain is decentralization in which no single entity has control over what is recorded or how it is recorded and consensus has to be reached for most all decisions.  You can achieve information symmetry with a distributed database, but not consensus.  Why even coin the term "blockchain" in the first place if you are just going to use a centralized distributed database, which is nothing new and has been around for decades?

while i absolutely personally agree that that is the best use of blockchains, the tech sure can be used by private entities. as to why firms might adopt blockchains if they don't enable external commits ...that's a good question and i'm sure we'll see in the coming years whether there are any real economic reasons. some may adopt blockchains just bc they're the cool new buzzword, others might find some feature advantages, or there could be organizational efficiencies in enabling internal commits but restricting external ones ...creating a sort of private consensus mechanism shared amongst organizations. who knows...time and market evolution will tell.

[cylonmaker2053]

@Helikopterben The premise of a blockchain is not decentralization it is information symmetry, which allows for participants in the network to more efficiently work together and manage risks. I don't think you understand how our financial system works. The government dictates property rights and there is no way around that particularly in the information age where most property is digitally recorded. I don't care if there is a central authority that controls the blockchain so long as the inherent transparency of the blockchain ensures that entity is accountable for their breach of protocol. In the end you're vision is not practical by any measure. So long as we have national governments we won't see it play out since governments will always seek to control the flow of capital within their borders, for security and policy reasons.

or simply to be able to extract rent from all transactions and assets on their turf, like any other gang.

So won't companies that list in safe & tax haven jurisdictions on a globally accessible, effectively decentralised and very private blockchain make them obsolete, because of the savings to companies and their shareholders in the form of reduced taxes/rent?

yes, i think jurisdictional safe havens + globally accessible DAC capabilities will ultimately give a sustainable competitive advantage to firms locating outside of gang territories. the War on Drugs and War on Terror have largely cartelized so much of the business world, justifying government collusion to eliminate tax havens and financial privacy; blockchain tech & emerging DACs could potentially reverse that trend.

[donkeypong]

I see no reason why we cant get a major exchange like Nasdaq to invest

If NASDAQ invested, it would be kind of like that Overstock thing: they'd control it, or it would have to be oriented towards their needs. I'm sure we'd all be richer and glad the technology was going widespread, but it would be like a startup getting bought out by Google. 12 months later, the original folks would quit the new project, fork it and go out to (re-) build what they really wanted. Or they'd retire to the beach.

Which part of your assertion is bad for us. Exchanges, central securities depositories and central counterparties can use the blockchain to make their operations more efficient transparent and less risky. I want the broader financial system to gain from this technology if its centralized or not. And if you don't like the restrictions exchanges put on their markets you don't have to trade in them. Its really that simple.

I actually agree with you. My scenario above was just that, a scenario, for better or for worse. Not everyone would be happy with it. But on balance, I'd take the deal also, because I think it would make the world better.

[Helikopterben]

@Helicopterben let's agree to disagree. I can't really conced any of my points if you don't see the logic

Fair enough

[Empirical1.2]

@helikopterben, I largely agree with you

It often happens still today in Africa, the ME & even Eastern Europe that you have military coups or extremist governments temporarily in power that dispossess segments of the population.

Trying to retro-actively discern which property sales were legitimate under a central authority controlled blockchain would be a fool's errand because they would have sanctioned all of their activities as legal and legitimate at the time. However on an effectively decentralised blockchain, forced property sales/confiscations during that period by governments could be recorded as such.

The restitution of nazi confiscated or stolen property still continues to this day, but the process would have been made infinitely easier with a decentralised blockchain on which the original owners obviously wouldn't have given their consent for the sale/transfer.

So whether for the local populations themselves or too attract global investors, it's likely that we'll see the free market choosing decentralised blockchains over central authority controlled ones for long term property rights over time.

[clout]

@Helicopterben let's agree to disagree. I can't really conced any of my points if you don't see the logic

[Helikopterben]

@Helikopterben The premise of a blockchain is not decentralization it is information symmetry

No.  The purpose of a blockchain is decentralization in which no single entity has control over what is recorded or how it is recorded and consensus has to be reached for most all decisions.  You can achieve information symmetry with a distributed database, but not consensus.  Why even coin the term "blockchain" in the first place if you are just going to use a centralized distributed database, which is nothing new and has been around for decades?

I don't care if there is a central authority that controls the blockchain so long as the inherent transparency of the blockchain ensures that entity is accountable for their breach of protocol.

This won't work.  Transparency alone won't ensure accountability.  Transparency and consensus with other parties involved is required for true accountability. 

In the end you're vision is not practical by any measure. So long as we have national governments we won't see it play out since governments will always seek to control the flow of capital within their borders, for security and policy reasons.

I think you are to short-sighted.  The political landscape is due for as much disruption as the financial landscape, and the bulk of disruption has yet to occur.  The world may look vastly different in the coming decades and that includes disruption of government, disruption of national boudaries, disruption of property rights, disruption of law, and disruption of the way we even think about finance and money.  Legacy fiat monetary systems and markets may be rendered completely obsolete. IMO, we are about to embark on the broadest and most encompassing wave of the internet and there are many changes that we just wont be able to predict.  The world will look vastly different in 20 years.

[Empirical1.2]

@Helikopterben The premise of a blockchain is not decentralization it is information symmetry, which allows for participants in the network to more efficiently work together and manage risks. I don't think you understand how our financial system works. The government dictates property rights and there is no way around that particularly in the information age where most property is digitally recorded. I don't care if there is a central authority that controls the blockchain so long as the inherent transparency of the blockchain ensures that entity is accountable for their breach of protocol. In the end you're vision is not practical by any measure. So long as we have national governments we won't see it play out since governments will always seek to control the flow of capital within their borders, for security and policy reasons.

or simply to be able to extract rent from all transactions and assets on their turf, like any other gang.

So won't companies that list in safe & tax haven jurisdictions on a globally accessible, effectively decentralised and very private blockchain make them obsolete, because of the savings to companies and their shareholders in the form of reduced taxes/rent?

[cylonmaker2053]

@Helikopterben The premise of a blockchain is not decentralization it is information symmetry, which allows for participants in the network to more efficiently work together and manage risks. I don't think you understand how our financial system works. The government dictates property rights and there is no way around that particularly in the information age where most property is digitally recorded. I don't care if there is a central authority that controls the blockchain so long as the inherent transparency of the blockchain ensures that entity is accountable for their breach of protocol. In the end you're vision is not practical by any measure. So long as we have national governments we won't see it play out since governments will always seek to control the flow of capital within their borders, for security and policy reasons.

or simply to be able to extract rent from all transactions and assets on their turf, like any other gang.

[clout]

@Helikopterben The premise of a blockchain is not decentralization it is information symmetry, which allows for participants in the network to more efficiently work together and manage risks. I don't think you understand how our financial system works. The government dictates property rights and there is no way around that particularly in the information age where most property is digitally recorded. I don't care if there is a central authority that controls the blockchain so long as the inherent transparency of the blockchain ensures that entity is accountable for their breach of protocol. In the end you're vision is not practical by any measure. So long as we have national governments we won't see it play out since governments will always seek to control the flow of capital within their borders, for security and policy reasons.

[cylonmaker2053]

First of all, it's impossible for a centralized entity to create its OWN blockchain.  That is contradictory.  They would just end up with a database.  Maybe a distributed database, but not a fully decentralized database, a.k.a blockchain.  Perhaps they could create a ledger distributed among multiple exchanges, banks, and/or financial institutions in which all entities compete among each other to validate transactions and change parameters on the network, but it's difficult to tell how decentralized such a system would be.  Likely it would be even more centralized than ripple.  It almost surely would not be opt-in... we could call it a psuedo-blockchain, but not a real blockchain such as bitshares or bitcoin.  The best chains will be the ones that started from a grassroots effort and grew organically over time.  Chains started and maintained by the establishment will most likely not keep end user interests in mind with regards to monetary inflation, theft, confiscation, ect.  In other words, they will be more centralized and consequently less secure.  Their best bet is to adapt to the technology already being produced, and many of them are doing just that.

My grand vision would be for exchanges such as the nasdaq to replace their backend databases with the bitshares blockchain, doing so in a way that users retain control of their assets at all times, even when in trade or under contract.  I imagine we are quite a ways off from this becoming a reality.

i think your definition of 'blockchain' is too restrictive. a blockchain is just a distributed database with commit rules for appending blocks of data. there's nothing saying the distribution of the database need be outside of a single organization. whether the security of such a scheme is higher or lower than what we think of today with cryptocurrencies will be debatable for some time, and i think it safe to assume that the banking cartel will prefer opacity and private restrictions to commits over an open system...just in their nature.

nonetheless, i love your grand vision and obviously support it

[cylonmaker2053]

These exchanges arent going to build there own block chain. They think that the technical limitations are that of bitcoin. Nasdaq has no clue that it can use a block chain for trade execution on the scale that they're accustomed. They are only looking at it for post trade services.

Also have you missed the memo on the compliance features that have been implemented in graphene. Exchange can remain fully compliant if they so choose. Nasdaq is also a huge proponent of open source and I don't think thats a deterrent. They wouldn't use this for their equities markets. Where this is most needed is in the standardization of OTC products that aren't currently exchange traded.

why don't you think exchanges won't build their own blockchains? i'd say it's a strong possibility. either that, or subsets of financial institutions forming collaborative, but still privately operated, chains. i'd also strongly assume that what we're doing here with Bitshares is fully on the Wall ST radar; these guys aren't idiots, money can buy a lot of brilliant minds.

good point re: the OTC assets...i can see that being a first step to apply the new tech.

You should read flash boys. While the book is mostly about the practices of HFTs, it provides pretty good insight on the disconnect between financial professionals and the software engineers that create and operate the platforms they use. I don't think the ppl at these companies that make the decisions have any idea how to technically integrate blockchain solutions into their business model.

The thing about the block chain is that the concept of a public database is antithetical to MO of a competitive company or a fiduciary institution. The blockchains not a big priority for them even if they make the claim that they think the underlying tech of bitcoin can have widespread implications for the financial system.

Flash Boys is a good story, but still just a story filtered through available information and lens of the author. money can always buy a lot of really smart people, so there are no real barriers for banks or other institutions adopting their own blockchains. hell, anyone can hire CNX to do it for them if they wanted.

but yeah, i don't think any of this is a big priority for most financial institutions. that prob won't come for awhile, or until we start taking away a nontrivial amount of their business.

[Helikopterben]

These exchanges arent going to build there own block chain. They think that the technical limitations are that of bitcoin. Nasdaq has no clue that it can use a block chain for trade execution on the scale that they're accustomed. They are only looking at it for post trade services.

Also have you missed the memo on the compliance features that have been implemented in graphene. Exchange can remain fully compliant if they so choose. Nasdaq is also a huge proponent of open source and I don't think thats a deterrent. They wouldn't use this for their equities markets. Where this is most needed is in the standardization of OTC products that aren't currently exchange traded.

why don't you think exchanges won't build their own blockchains? i'd say it's a strong possibility. either that, or subsets of financial institutions forming collaborative, but still privately operated, chains. i'd also strongly assume that what we're doing here with Bitshares is fully on the Wall ST radar; these guys aren't idiots, money can buy a lot of brilliant minds.

good point re: the OTC assets...i can see that being a first step to apply the new tech.

First of all, it's impossible for a centralized entity to create its OWN blockchain.  That is contradictory.  They would just end up with a database.  Maybe a distributed database, but not a fully decentralized database, a.k.a blockchain.  Perhaps they could create a ledger distributed among multiple exchanges, banks, and/or financial institutions in which all entities compete among each other to validate transactions and change parameters on the network, but it's difficult to tell how decentralized such a system would be.  Likely it would be even more centralized than ripple.  It almost surely would not be opt-in... we could call it a psuedo-blockchain, but not a real blockchain such as bitshares or bitcoin.  The best chains will be the ones that started from a grassroots effort and grew organically over time.  Chains started and maintained by the establishment will most likely not keep end user interests in mind with regards to monetary inflation, theft, confiscation, ect.  In other words, they will be more centralized and consequently less secure.  Their best bet is to adapt to the technology already being produced, and many of them are doing just that.

My grand vision would be for exchanges such as the nasdaq to replace their backend databases with the bitshares blockchain, doing so in a way that users retain control of their assets at all times, even when in trade or under contract.  I imagine we are quite a ways off from this becoming a reality. 

[clout]

These exchanges arent going to build there own block chain. They think that the technical limitations are that of bitcoin. Nasdaq has no clue that it can use a block chain for trade execution on the scale that they're accustomed. They are only looking at it for post trade services.

Also have you missed the memo on the compliance features that have been implemented in graphene. Exchange can remain fully compliant if they so choose. Nasdaq is also a huge proponent of open source and I don't think thats a deterrent. They wouldn't use this for their equities markets. Where this is most needed is in the standardization of OTC products that aren't currently exchange traded.

why don't you think exchanges won't build their own blockchains? i'd say it's a strong possibility. either that, or subsets of financial institutions forming collaborative, but still privately operated, chains. i'd also strongly assume that what we're doing here with Bitshares is fully on the Wall ST radar; these guys aren't idiots, money can buy a lot of brilliant minds.

good point re: the OTC assets...i can see that being a first step to apply the new tech.

You should read flash boys. While the book is mostly about the practices of HFTs, it provides pretty good insight on the disconnect between financial professionals and the software engineers that create and operate the platforms they use. I don't think the ppl at these companies that make the decisions have any idea how to technically integrate blockchain solutions into their business model.

The thing about the block chain is that the concept of a public database is antithetical to MO of a competitive company or a fiduciary institution. The blockchains not a big priority for them even if they make the claim that they think the underlying tech of bitcoin can have widespread implications for the financial system.

[clout]

I see no reason why we cant get a major exchange like Nasdaq to invest

If NASDAQ invested, it would be kind of like that Overstock thing: they'd control it, or it would have to be oriented towards their needs. I'm sure we'd all be richer and glad the technology was going widespread, but it would be like a startup getting bought out by Google. 12 months later, the original folks would quit the new project, fork it and go out to (re-) build what they really wanted. Or they'd retire to the beach.

Which part of your assertion is bad for us. Exchanges, central securities depositories and central counterparties can use the blockchain to make their operations more efficient transparent and less risky. I want the broader financial system to gain from this technology if its centralized or not. And if you don't like the restrictions exchanges put on their markets you don't have to trade in them. Its really that simple.