Using the blockchain as a ledger for stocks?

[Elwar]

Ok, I've read several mentions of it and listened to some talk of it but I would like to know a bit more about how using the blockchain would work as a public ledger of stocks.

From what I am understanding, in theory, I could take maybe 1 bitcoin and split it into 1 million bits with an address for each one designating it as a "stock". Then take that list and make it publicly available. If you want to buy a share, say for $1 per share the company would send you the bit to your address and thanks to the transparency of the blockchain, since you know the original address, you can track any address it transfers to. You can then sell your share to anyone else by sending that bit to someone else.

Is this how it works?

Does colored coins make this simpler? I am sure there are other things that came out that do this as well that I heard about.

I'm not looking at creating a separate blockchain since Bitcoin has the built in security of petabytes of computing power behind it.

[odolvlobo]

It seems unwieldy to have each share represented by an address. For example, Apple has about 6 billion shares. Just the initial distribution of 6 billion shares would require more than 200 GB of space on the block chain.

[LiteCoinGuy]

Ok, I've read several mentions of it and listened to some talk of it but I would like to know a bit more about how using the blockchain would work as a public ledger of stocks.

From what I am understanding, in theory, I could take maybe 1 bitcoin and split it into 1 million bits with an address for each one designating it as a "stock". Then take that list and make it publicly available. If you want to buy a share, say for $1 per share the company would send you the bit to your address and thanks to the transparency of the blockchain, since you know the original address, you can track any address it transfers to. You can then sell your share to anyone else by sending that bit to someone else.

Is this how it works?

Does colored coins make this simpler? I am sure there are other things that came out that do this as well that I heard about.

I'm not looking at creating a separate blockchain since Bitcoin has the built in security of petabytes of computing power behind it.

i cant explain it very good but colored coins seems to be a way:

http://www.nasdaq.com/press-release/nasdaq-launches-enterprisewide-blockchain-technology-initiative-20150511-00485


(this news alone is huge but not many people seem to be exited - lol   )

[Elwar]

Ok, I've read several mentions of it and listened to some talk of it but I would like to know a bit more about how using the blockchain would work as a public ledger of stocks.

From what I am understanding, in theory, I could take maybe 1 bitcoin and split it into 1 million bits with an address for each one designating it as a "stock". Then take that list and make it publicly available. If you want to buy a share, say for $1 per share the company would send you the bit to your address and thanks to the transparency of the blockchain, since you know the original address, you can track any address it transfers to. You can then sell your share to anyone else by sending that bit to someone else.

Is this how it works?

Does colored coins make this simpler? I am sure there are other things that came out that do this as well that I heard about.

I'm not looking at creating a separate blockchain since Bitcoin has the built in security of petabytes of computing power behind it.

i cant explain it very good but colored coins seems to be a way:

http://www.nasdaq.com/press-release/nasdaq-launches-enterprisewide-blockchain-technology-initiative-20150511-00485


(this news alone is huge but not many people seem to be exited - lol   )

That looks like yet another "We like the blockchan but not Bitcoin".

I don't understand why people would not want to incorporate into the Bitcoin blockchain considering it is the most secure ledger in the world.

In the news: NASDAQ blockchain taken out by a 51% attack

[chek2fire]

Something like this will work. I think with one satoshi will pass the informations they want in blockhain and i think will be not one per transaction but a group of them. The big question for me is can handle the current blockchain system 54.000 transactions per second tha nasdaq do in real time?
In my opinion this is a big news for the bitcoin ecosystem and we see that the financial system finally use the bitcoin blockchain and not a funny altcoin system.
You can see the news here

https://www.youtube.com/watch?v=UvJPILRdRIo#oo

http://www.wsj.com/video/nasdaq-to-test-bitcoin-related-technology-for-trading/F331CAAF-667E-4E94-9824-5085368AA960.html

http://www.bloomberg.com/news/videos/2015-05-11/nasdaq-experiments-with-bitcoin-s-blockchain-technology

in my opinion the 51% attack is not a problem at all for this big financial companies. If in the future they use the blockchain will secure and the system with their own miners to prevent the 51% attack

[Alley]

Don't forget the dust rule.  You need something like 456 sothashis for a minimum send. 

[chek2fire]

oκ so we say about 456 satoshis per transaction. How many transactions can they do with one bitcoin and how many mb information can add to this?

[Alley]

I don't think making a colored coins takes any additional space.

[franky1]

It seems unwieldy to have each share represented by an address. For example, Apple has about 6 billion shares. Just the initial distribution of 6 billion shares would require more than 200 GB of space on the block chain.

people dont buy just 1 share. thus numbers of tx's will be far less than you predict. also companies can send out tx's in batches to reduce data volume.

also most tx's would be done offchain. EG people deposit onto the nasdaq and then mysql databases log most daytrading transactions and then only do onchain tx's when people withdraw funds to make their own personal bearer certificates or to move between exchanges (LSE, NYSE, etc)

take for instance current bitcoin exchanges. more tx's happen offchain due to coinbase, btc-e, bitstamp, etc than happen onchain (person to person)

[Elwar]

Ok I see colored coins and counterparty working toward this.

Are there any others? I am working on a startup with a team right now and would like to propose to the others a viable solution that uses the Bitcoin blockchain.

About 100,000 shares, $100 each.

[NeuroticFish]

I think that:

1. The blockchain will get bigger than we'd expect for the near future. (bad)
2. The tx fee may get bigger - maybe size related - to not store so much extra info only for some dust in return (bad)
3. The miners' future may start looking better. (good)
4. Trust in bitcoin will rise a lot. (v. good).

Over all, the news are.. mixed to good, of course some are dancing and some are worrying. But blockchain is a wonderful tech and this is the most secure blockchain. I expect more and more start using it.


Colored coins, from what I know, could make this easier and may somehow void points 2, 3, maybe 1 too.
Off-chain operations could be used a lot indeed to reduce the tx fees they'd pay. And yes, each transaction will have to pay the miners and contain the minimum amount, else, sooner or later, the miners will stop processing their data.

[odolvlobo]

It seems unwieldy to have each share represented by an address. For example, Apple has about 6 billion shares. Just the initial distribution of 6 billion shares would require more than 200 GB of space on the block chain.

people dont buy just 1 share. thus numbers of tx's will be far less than you predict. also companies can send out tx's in batches to reduce data volume.

6 billion shares. 1 address per share. 32 bytes per address. 6,000,000,000 addresses x 32 bytes = 200 GB

Ok I see colored coins and counterparty working toward this.

Are there any others? I am working on a startup with a team right now and would like to propose to the others a viable solution that uses the Bitcoin blockchain.

Colored coins is fairly simple. I recommend reading about it before embarking on your own solution: https://www.github.com/OpenAssets/open-assets-protocol

There is  also Omni (aka Mastercoin): http://www.omnilayer.org/

[LiteCoinGuy]

Something like this will work. I think with one satoshi will pass the informations they want in blockhain and i think will be not one per transaction but a group of them. The big question for me is can handle the current blockchain system 54.000 transactions per second tha nasdaq do in real time?
In my opinion this is a big news for the bitcoin ecosystem and we see that the financial system finally use the bitcoin blockchain and not a funny altcoin system.
You can see the news here

it can in the future. because it is software.

[neurotypical]

Ok, I've read several mentions of it and listened to some talk of it but I would like to know a bit more about how using the blockchain would work as a public ledger of stocks.

From what I am understanding, in theory, I could take maybe 1 bitcoin and split it into 1 million bits with an address for each one designating it as a "stock". Then take that list and make it publicly available. If you want to buy a share, say for $1 per share the company would send you the bit to your address and thanks to the transparency of the blockchain, since you know the original address, you can track any address it transfers to. You can then sell your share to anyone else by sending that bit to someone else.

Is this how it works?

Does colored coins make this simpler? I am sure there are other things that came out that do this as well that I heard about.

I'm not looking at creating a separate blockchain since Bitcoin has the built in security of petabytes of computing power behind it.

i cant explain it very good but colored coins seems to be a way:

http://www.nasdaq.com/press-release/nasdaq-launches-enterprisewide-blockchain-technology-initiative-20150511-00485


(this news alone is huge but not many people seem to be exited - lol   )

That looks like yet another "We like the blockchan but not Bitcoin".

I don't understand why people would not want to incorporate into the Bitcoin blockchain considering it is the most secure ledger in the world.

In the news: NASDAQ blockchain taken out by a 51% attack

It's a stupid ego fight, or they are just simply clueless. If you are going to use a blockchain, and you aren't using Bitcoin's (the most secure network in the planet) you are either in for an ego fight or a total retard. Maybe they want some sort of centralized method?

[Chris_Stewart_5]

It seems unwieldy to have each share represented by an address. For example, Apple has about 6 billion shares. Just the initial distribution of 6 billion shares would require more than 200 GB of space on the block chain.

people dont buy just 1 share. thus numbers of tx's will be far less than you predict. also companies can send out tx's in batches to reduce data volume.

6 billion shares. 1 address per share. 32 bytes per address. 6,000,000,000 addresses x 32 bytes = 200 GB

Why on earth would you do just 1 share per address?

[QuestionAuthority]

I'm still confused about what value Bitcoin's blockchain adds to the issuance of eShares. Tens of billions of stock shares have already been issued electronically. Far more than the current blockchain could ever deal with. Soon no one will get a big piece of paper when they buy stocks. I'm not sure the blockchain can handle what's already been issued much less every stock that converts in the next five years.

See: http://www.giveashare.com/stockcertificates.shtml

[adhitthana]

I'm still confused about what value Bitcoin's blockchain adds to the issuance of eShares. Tens of billions of stock shares have already been issued electronically. Far more than the current blockchain could ever deal with. Soon no one will get a big piece of paper when they buy stocks. I'm not sure the blockchain can handle what's already been issued much less every stock that converts in the next five years.

See: http://www.giveashare.com/stockcertificates.shtml

Would it be the decentralisation? No trusted third party?

[H.W.Z]

It seems unwieldy to have each share represented by an address. For example, Apple has about 6 billion shares. Just the initial distribution of 6 billion shares would require more than 200 GB of space on the block chain.

people dont buy just 1 share. thus numbers of tx's will be far less than you predict. also companies can send out tx's in batches to reduce data volume.

6 billion shares. 1 address per share. 32 bytes per address. 6,000,000,000 addresses x 32 bytes = 200 GB

Why on earth would you do just 1 share per address?

You misunderstood the meaning.

I could take maybe 1 bitcoin and split it into 1 million bits with an address for each one designating it as a "stock"

Issuing address contains the whole shares,  just one address! Buyers can buy bunch of shares with his address, only one address is enough.

[Undermood]

Ok, I've read several mentions of it and listened to some talk of it but I would like to know a bit more about how using the blockchain would work as a public ledger of stocks.

From what I am understanding, in theory, I could take maybe 1 bitcoin and split it into 1 million bits with an address for each one designating it as a "stock". Then take that list and make it publicly available. If you want to buy a share, say for $1 per share the company would send you the bit to your address and thanks to the transparency of the blockchain, since you know the original address, you can track any address it transfers to. You can then sell your share to anyone else by sending that bit to someone else.

Is this how it works?

Does colored coins make this simpler? I am sure there are other things that came out that do this as well that I heard about.

I'm not looking at creating a separate blockchain since Bitcoin has the built in security of petabytes of computing power behind it.

i cant explain it very good but colored coins seems to be a way:

http://www.nasdaq.com/press-release/nasdaq-launches-enterprisewide-blockchain-technology-initiative-20150511-00485


(this news alone is huge but not many people seem to be exited - lol  )

That looks like yet another "We like the blockchan but not Bitcoin".

I don't understand why people would not want to incorporate into the Bitcoin blockchain considering it is the most secure ledger in the world.

In the news: NASDAQ blockchain taken out by a 51% attack

It's a stupid ego fight, or they are just simply clueless. If you are going to use a blockchain, and you aren't using Bitcoin's (the most secure network in the planet) you are either in for an ego fight or a total retard. Maybe they want some sort of centralized method?

I think they are just want to take advantage of the blockchain technology, like security, low cost, high speed etc. It is nothing to do with decentralized, cos ppl trust their company's brand and absolutely go there to trade.

[Miracal]

Something like this will work. I think with one satoshi will pass the informations they want in blockhain and i think will be not one per transaction but a group of them. The big question for me is can handle the current blockchain system 54.000 transactions per second tha nasdaq do in real time?
In my opinion this is a big news for the bitcoin ecosystem and we see that the financial system finally use the bitcoin blockchain and not a funny altcoin system.
You can see the news here

it can in the future. because it is software.

IMO it is not a problem at all. The block size is considered to be increased at the moment. The higher the block size, the more the blockchian can handle the number of transactions in one block time!