Bitcoin Stockmarket

[Cambiro]

I'm not a economic genius, I get all messed up with currencies, exchanges, and so on. But I think it would be a good discussion to think in a stockmarket ruled by bitcoins, if there's a way to do it (if this is not done already)

I'm not a computer geek too, so if there's one here, I propose you to create a software (or something) to simulate (or to truly execute) stockmarketing throught bitcoins.

I might be talkin' bullshit, but whatever

[Nefario]

I'm not a economic genius, I get all messed up with currencies, exchanges, and so on. But I think it would be a good discussion to think in a stockmarket ruled by bitcoins, if there's a way to do it (if this is not done already)

I'm not a computer geek too, so if there's one here, I propose you to create a software (or something) to simulate (or to truly execute) stockmarketing throught bitcoins.

I might be talkin' bullshit, but whatever

Im working on it.

[FatherMcGruder]

I'm not a economic genius, I get all messed up with currencies, exchanges, and so on. But I think it would be a good discussion to think in a stockmarket ruled by bitcoins, if there's a way to do it (if this is not done already)

I'm not a computer geek too, so if there's one here, I propose you to create a software (or something) to simulate (or to truly execute) stockmarketing throught bitcoins.

I might be talkin' bullshit, but whatever

Corporations would have to sell shares for bitcoins.

[Nefario]

exactly

[grondilu]

Yeah I'm working on it too.  I'm not sure how exactly would this be implemented.  I've experimented several solutions.

I want to mention something though.  Such a stock market doesn't have to be organised by corporations themselves.  Stocks can be sold on "second-hand", in a parallel market.

I've already sold 1 eBay share and 1 DRDGold share, using an auction process.  Search those terms in the marketplace forum.

[Nefario]

Yeah I'm working on it too.  I'm not sure how exactly would this be implemented.  I've experimented several solutions.

I want to mention something though.  Such a stock market doesn't have to be organised by corporations themselves.  Stocks can be sold on "second-hand", in a parallel market.

I've already sold 1 eBay share and 1 DRDGold share, using an auction process.  Search those terms in the marketplace forum.

That is meta-trading, and turns out is a different business model than a stock market. someone who is trusted needs to buy the original shares in their own name, and then trade the rights to those shares on a secondary market.

How are you having trouble with you stock market app? what language are you using? bash again?

[idev]

I'm not a economic genius, I get all messed up with currencies, exchanges, and so on. But I think it would be a good discussion to think in a stockmarket ruled by bitcoins, if there's a way to do it (if this is not done already)

I'm not a computer geek too, so if there's one here, I propose you to create a software (or something) to simulate (or to truly execute) stockmarketing throught bitcoins.

I might be talkin' bullshit, but whatever

Im trying to come up with something, but its hard
to complete what i want as i don't code.

[grondilu]

That is meta-trading, and turns out is a different business model than a stock market. someone who is trusted needs to buy the original shares in their own name, and then trade the rights to those shares on a secondary market.

Well, yes that's the idea.  But it's no different than what any broker do.

How are you having trouble with you stock market app? what language are you using? bash again?

I've actually finished it, thanks to dirtyfilthy wich made a C program which allows a user to extract private keys from a wallet.  But I don't like the ergonomic of the result, and I'm pretty sure people won't like the idea of using an other program to sign stuffs.

I'm now considering going back to the idea of using GnuPG.

Bash will be fine to this.  It's the whole design of the thing that I have to think more through.

[Steve]

A BitCoin based stock market would be fantastic.  However, as a secondary market to existing stock markets, it would lose some of it's appeal.  What is needed is a way of issuing digital shares in a manner very similar to BitCoin itself.  However, rather than be capped at a fixed number of shares (like bitcoin), companies would be able to issue new shares at any time.  Similarly, they would also be able to retire shares.  The community would need to be able to verify at any time the total number of shares outstanding.  An exchange (trading stock for BTC) would require that the actual collateral (BTC for a bid, and digital stock for an offer) be placed in escrow.  Such a system would prevent naked shorting and quote stuffing (both of which are supposed to be illegal but nevertheless are widespread in today's markets because they have no technical means to prohibit the practice).

This is also very important for an honest system of BTC lending.  Rather than lending using fractional reserve banking, you would create a lending business.  The business would obtain capital for lending by issuing shares in exchange for BTC.  The degree of success for that business rests on its ability to make good lending decisions.  If it does that well, share price will increase, if it doesn't share price will decrease.  People wouldn't have a demand deposit with such a bank, but rather they would own shares.  It would be immune to bank runs because if people did start dumping shares to obtain BTC, the price would eventually fall to a point where it's in line with the actual performance of the lending business and people would stop selling (or buyers would start to step in).  It will probably also be desirable for these lending businesses to be physically near the people they extend loans to...otherwise, it will be more difficult for them to ascertain or manage the true risk they are taking in making a loan.

Similarly, instead of lending, such a bank could instead invest by buying shares in other companies (or shorting shares in other companies), in which case the bank acts more like a mutual fund or hedge fund.

In the not too distant future, I expect the market for BTC will get very tight...people will hoard them...in which case, lending will become more and more important.

For these reasons, a system for issuing shares that's very similar to the manner in which BTC itself operates is very important IMO.

[grondilu]

A BitCoin based stock market would be fantastic.  However, as a secondary market to existing stock markets, it would lose some of it's appeal.  What is needed is a way of issuing digital shares in a manner very similar to BitCoin itself.  However, rather than be capped at a fixed number of shares (like bitcoin), companies would be able to issue new shares at any time.  Similarly, they would also be able to retire shares. 

This would be extremely easy.

First, just make a modified version of bitcoin, with a different Genesis block.  In the genesis, all monetary units will be attributed in the transaction (a generation transaction).

To increase the capital, the company would just issue a new currency, and she would guarantee an appropriate exchange rate.   Or she can modify the code directly and claim that this new code is the "official code".

Retiring shares is just as simple.


It would be very easy, really.

[eMansipater]

A BitCoin based stock market would be fantastic.  However, as a secondary market to existing stock markets, it would lose some of it's appeal.  What is needed is a way of issuing digital shares in a manner very similar to BitCoin itself.  However, rather than be capped at a fixed number of shares (like bitcoin), companies would be able to issue new shares at any time.  Similarly, they would also be able to retire shares. 

This would be extremely easy.

First, just make a modified version of bitcoin, with a different Genesis block.  In the genesis, all monetary units will be attributed in the transaction (a generation transaction).

To increase the capital, the company would just issue a new currency, and she would guarantee an appropriate exchange rate.   Or she can modify the code directly and claim that this new code is the "official code".

Retiring shares is just as simple.


It would be very easy, really.

Sort of, except that the security of the system would be dependent on the computational power, so either this company runs tons of gpu's around the clock to keep their own stock secure, or finds some way of convincing others to do it for them, which is the tough part.  Perhaps they could design with X shares retained in the genesis block, and an asymptote to a given ratio of X, thus allowing people to buy in stock with either cycles or cash?  but it seems like this would just cause generation to die off on the asymptote schedule.  without transaction fees, why would anyone keep generating?

On a complete sidenote, I think a lot of people (not necessarily on this forum) underestimate the genius of Bitcoin.  It's an incredibly effective solution to a very specific problem--without all the parts working the particular way that they do, it wouldn't make very much sense.  But it fits those parts perfectly.  I don't think I'm soon going to lose the sense of awe I felt when reading the specifications of the system for the first time.  This thing is deeply masterful!  If you're reading this Satoshi, here's to you.  And I hope you are.

eMansipater

[epdm888]

 I am professsional stock investor. For Bitcoin stockmarket, it will involve a lot of law issue. Maybe
 Starting up as a game which simulate the real stockmarket is more realistic.

[Nefario]

I am professsional stock investor. For Bitcoin stockmarket, it will involve a lot of law issue. Maybe
 Starting up as a game which simulate the real stockmarket is more realistic.

Not really, to a large extent bitcoin and companies that are bitcoin companies, that is they are not only shares from normal companies resold on a bitcoin market, will be operating outside the law, primarily in cypherspace, according to a number of common sense trade conventions.

Think of the user credit rating agency I'm building, or the bitcoin mining co-op that began a couple of weeks ago. These operate almost entirely in bitcoin, only exchanging to USD or other currencies to pay some real world expenses (electricity for example).

The membership, and share ownership, as well as the actual operators are to a large extent anonymous, and work completely by reputation and trust (very hard to earn). The companies themselves don't physically exist, their assets are scattered between their operators, again who are anonymous, but they work just as well anyway.

The market, when it comes will be in an unknown location. Backed up, encrypted, anonymous, secure. Away from the hands of any typical terrestrial law enforcement agency. And nothing short of banning cryptograhy and turning off the internet in most countries worldwide would be able to stop this one it begins.

A bitcoin stock market, will involve 0 law, it will evolve and grow at a much faster rate than any normal stock market without so much overheads or red-tape holding it back.

[Cambiro]

A bitcoin stock market, will involve 0 law, it will evolve and grow at a much faster rate than any normal stock market without so much overheads or red-tape holding it back.

Yeah, that's what I think too, because as long as I know for the little I understand about bitcoins, they are untraceable and very safe to their owner in any means. As I said, I don't get much of the hang of this, but I don't see how the law of a country can block the use of bitcoin for buying shares, if the company eager to sell them in this via.

[Cambiro]

I got such a interest about bitcoins because when I first read about it, I realized that it deals with such intricated and complex issues that it almost makes us to think that all we know about money and values are somehow wrong or single-sided.

[kiba]

I got such a interest about bitcoins because when I first read about it, I realized that it deals with such intricated and complex issues that it almost makes us to think that all we know about money and values are somehow wrong or single-sided.

Well, we must now deal to develop security practice and instrument of business needed to conduct international commerce. That in itself is a whole nother ballgame.

[markm]

Software for it could be tested in a game context.

This is something I was going to do anyway, I happened upon bitcoin when doing research looking for already existing open source code that could be useful for such a project.

Basically I have a whole bunch of Freeciv worlds, and among the standard "improvements" one builds in the cities of such worlds are Marketplaces, Banks and Stock Markets. As I want to use these worlds as backdrop for RPG characters and finance/business game players more than as playthings of immortal spirit-of-a-nation players I set out to find code useful for fleshing out the market banks and stockmarkets, which ended up causing me to discover bitcoin...

-MarkM-

[Cambiro]

Software for it could be tested in a game context.

Anyone who may try to make this game, don't forget to simulate also the BTC/USD transactions. Or there's no meaning of doing it.

[markm]

In the past I always assumed each planet's local currency is mostly useless elsewhere. In fact starports in Digitalis Data Cluster assumed all local currency left in your account at the port was left to them as a tip, the idea being only actual "cargo" had much chance of being of an use at some other starsystem.

So having many currencies has always been part of my plan. Cluster had trillions of currencies. But it did not trade the currecies directly. Instead you saw a price list of all goods one could buy/sell, and could choose any item from that list to view all other items "price" in. For example tons of fuel was a popular choice.

With the Galactic Milieu there are now even more local currencies, as "balkanised" (multiple nations present) worlds are the usual starter worlds until some nation actually manages to gain complete control of a planet.

So there will not only be trades to American currency but on each planet that has a nation named American there will be a potentially quite separate "American local currency".

It is only Bitcoin that has made me start looking seriously again at the idea of a currency that would potentially be useful on widely separated worlds, and that is because Bitcoin can be transmitted. In Cluster the "traveller" type assumption applied, that nothing travels faster than ships so all communication is essentially cargo carried by ships. But in the Galactic Milieu faster than light "subspace communicator" tech is in the tech tree. So potentially even if there are blockades preventing what you buy in one starsystem from being transportable to another star system your actual bitcoins could be transmitted.

So basically have no fear, each nation's attempts to promulgate a currency of their own is expected to be as important a part of the game as the banks and stockmarkets and so on that potentially might choose to (or be militarily forced to if within the currency fiat-er's territory) honour such currencies.

A currency that can work in more than one starsystem could potentially allow you to trade umpteen tons of a commodity on one planet for umpteen tons of the same or a different commodity on another planet without any tons of commodity actually having to move between the starsystems involved.

It certainly has the potential to be very interesting. Before bitcoin I always had strong reservations against having local currencies move from world to world. Bitcoin has inspired me to give it a try. American money from a planet so far away that you cannot ship stuff you buy there with it to where you are might be worthless, but maybe bitcoins might somehow manage to jump that gulf. Maybe by in effect having stockpiles of goods on many worlds all potentially useful for "backing" bitcoins with the goods never actually being shipped, mostly being like vaults or at most ultimately being consumed on the same planet the good originated on. Speculators owning real estate on many planets is maybe the ultimate example of that, the real estate would not be shipped from planet to planet but maybe could still somehow store value to back currencies that could jump from world to worl by offering people the use of real estate on any world the currency backers have properties on.

A key category of shares would probably be real estate companies.

For other categories I was thinking of assuming each "improvement" one can build in a city has some kind of industry involved in it, with each such industry being on the stock markets and making more or less profit as more or less cities build or maintain such an improvement.

Then from those base types (plus mining companies, terraforming companies etc) branch out into hybrid companies, so many percent invested in libraries so many percent in universities so many percent in research labs or whatever combo a designer or CEO or board of a company wants to set up...

-MarkM-