stock coins? p2p virtual stock & debt equity / cryptostocks

[prophetx]

Like many people I have thought of the virtual companies who had recently in the last year or so created shares on centralized exchanges, and thought why were not these shares created using a peer-to-peer system like bitcoin?

WHY

Right now our weakest point are a few stock exchanges and/or manual tracking of shareholders- it posses a single point of failure, which can be easily brought down by any government.  We already have an example a few weeks after this thread was initiated:

News 23-09-13:  BTC-TC a leading exchange has announced that they will shut down http://thegenesisblock.com/btc-trading-corp-shutters-operations-cites-regulatory-environment/
News 08-10-13:BitFunder No Longer Available to US entities https://bitcointalk.org/index.php?topic=292384.msg3316080#msg3316080


WHAT

A system where people can transfer shares using the same technology we use to transfer virtual currency eliminates that issue.  It also makes it easy for companies to track ownership, and for all crypto exchanges to implement a new stock so that we can trade it for BTC, LTC, etc.

There are a few options available right now: colored coins, bitcoin or alt clones, ripple, Mastercoin as well as developments like bitshares and OT.  

HOW

That's to be determined by the survey and research at this point.  We want to keep it as simple as possible, at least in the beginning.

Most likely in this type of system, the miners would only get paid tx fees for changes in ownership, and possibly distribution of shares of dividends.  


INTERESTED?

I would suggest the thread is used to evaluate the viability of these options.  Then organize a test IPO to document the processes involved, test assumptions, document problems and deliver something that can be used by entrepreneurs to raise funds for their ventures without consuming their time in managing relationships with online exchanges, etc.

Working Document: P2P Digital Debt & Stock Equity System Based on Bitcoin, this includes a link to Trello account

I have tried to separate out different efforts so that people from different backgrounds (technical/development, business/marketing, regulatory/legal) can contribute.

https://docs.google.com/document/d/10YdUCKQ8MLOrjpxZtuQc6PhBVfThX6XU-stTOfGSOQE

CURRENT STATUS:

researching direction of technology effort.

CONTACTS:

jordan.dev https://bitcointalk.org/index.php?action=profile;u=85784
Prophetx https://bitcointalk.org/index.php?action=profile;u=90917

If you like your named added here PM me, or just start getting involved all the documents are open


If you want to help promote:

Code:

[size=11pt][url=https://bitcointalk.org/index.php?topic=292384.20][glow=yellow,12][b]Trade stocks and bonds P2P?!  Get FREE CryptoEquity shares in our proof of concept :D [/b][/glow][/url][/size]

The thread to get your CryptoEquity shares when we launch the proof of concept is here, this will be used as part of a crowdfunding campaign to support the development team involved as well as to get user feedback, so make sure you make a post.¨

https://bitcointalk.org/index.php?topic=307417

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[prophetx]

this is something similar conceptually but for assets like currency and commodities

http://www.coindesk.com/bitshares-p2p-trading-platform-to-offer-dividends-on-bitcoins/

[chriswen]

It's an okay idea but you still need exchanges.

[prophetx]

It's an okay idea but you still need exchanges.

generally yes you can still have them, however this allows you to take your stock offline.

also, i wonder if if there is a way to create a dual confirmation system, so that the stock p2p network only confirms a stock transaction once a bitcoin tx to a specified address has been confirmed by the btc network?   

[nomailing]

I also hope that this will soon be implemented. And hopefully the exchange will be incorporated into the P2P system. So that trustless trading of bitcoins against stocks is easily possible. That would be the ultimate breakthrough for large scale bitcoin adoption.

[prophetx]

I also hope that this will soon be implemented. And hopefully the exchange will be incorporated into the P2P system. So that trustless trading of bitcoins against stocks is easily possible. That would be the ultimate breakthrough for large scale bitcoin adoption.

When you wrote this it made me think about that crowd funding legislation that the SEC has yet to implement the regulations for (they are almost a year late I think).  Just think how huge that would be.  There is NO WAY that any regular stock exchange could expeditiously implement stocks for thousands+++ ideas that could get crowd funded, nor would they want to as the money involved would be too low for them to profit from the operational costs.

Nor should one exchange have a monopoly, so the obvious (to me) answer is a bitcoin style cryptostock, and of course using bitcoins as a medium of exchange.  

all those asics could potentially be put to use for trading and maintaining such stock networks.

and as a side benefit we would get TX fees for the miners, and ideally control for the crazy high frequency trading that happens on wall street

[jungle_dave]

Its refreshing to see this type of new thinking!
Good idea, It could be profitable..

Ill be watching

[jordan.dev]

Def. think this needs to happen, otherwise, it appears to me that ownership in "shares" of these companies are just database entries, and can't be moved or traded accross multiple exchanges.

I would like to contribute to this project if you get it going.

See my post about creating a centralized list of these virtual exchanges: https://bitcointalk.org/index.php?topic=283997.msg3039773#msg3039773

Furthermore, this idea also hints at a larger issue that block-chaining can solve: replacing the system of "Clearing", "Settlement" and "Chain of Custody" that is one of the biggest inefficiencies in interparty exchanges today... ever bought a house and signed a mortgage and paid for insurance on the "title" to your "title agent"? Or bought a stock and waited 3 days for it to "settle"? It's imbecilic in the 21st Century - but it gives plenty of useful idiots something to do for a living 

[prophetx]

Def. think this needs to happen, otherwise, it appears to me that ownership in "shares" of these companies are just database entries, and can't be moved or traded accross multiple exchanges.

I would like to contribute to this project if you get it going.

See my post about creating a centralized list of these virtual exchanges: https://bitcointalk.org/index.php?topic=283997.msg3039773#msg3039773

Furthermore, this idea also hints at a larger issue that block-chaining can solve: replacing the system of "Clearing", "Settlement" and "Chain of Custody" that is one of the biggest inefficiencies in interparty exchanges today... ever bought a house and signed a mortgage and paid for insurance on the "title" to your "title agent"? Or bought a stock and waited 3 days for it to "settle"? It's imbecilic in the 21st Century - but it gives plenty of useful idiots something to do for a living 

Thanks for posting this.  It lends more economic credence to why adapting the bitcoin code base to "shares" would hold some new productive value. 

My short term goals are two-fold: to gauge people's interest and to produce a paper via crowd effort to flesh out the concepts, such the ones as you have mentioned as well as the technical aspects. 

[jordan.dev]

Thanks for posting this.  It lends more economic credence to why adapting the bitcoin code base to "shares" would hold some new productive value. 

My short term goals are two-fold: to gauge people's interest and to produce a paper via crowd effort to flesh out the concepts, such the ones as you have mentioned as well as the technical aspects. 

Cool, I would love to start developing and spend more time programming on "core functionality" of a POWBC system. Right now, I mostly write trading software / engines.

I have also discussed ideas related to integrating BTC into common messaging systems that exist in real world trading protocols, and I think these area is "related" so this would be a good cross section.

I for one am happy to participate so put me on the list and we'll get it going if there is some interest (:

[prophetx]

Just some thoughts I had, if any cares to comment. 

Also I will be putting up a google doc soon, turns out it is the easiest solution for collaborative writing (there is a comment feature I found which I was previously unaware of)

-------

I know there is the concept of colored coins and open transactions and now bitshares, but none of those are really working yet.  Or not as adopted as the qt client we are all used to.

What are your thoughts on issuing coin  based on a clone of btc or ltc, etc that is representative of a company's stock?  This would be the easiest way to test market to do a proof of concept with an imaginary company stock.

Essentially since the coins would be representative of shares they would need to be almost completely premined and the network supported by just network fees.  Do you think that would work economically? How large would the tx fees need to be if so?

How difficult is it to pull off a clone in man hours?

And how to ensure that the blockchain for the stock is secure from attack?

If sha256 is used it would seem that someone pointing  a few asics at a particular stock could easily do a double spend attack right?  Or would users need to up the number of confirmations to ensure that stock transfer confirmations were legit?  How can this be addressed?

[jordan.dev]

Think we really need to get moving on this (not sure if you've seen but: http://thegenesisblock.com/btc-trading-corp-shutters-operations-cites-regulatory-environment/)

Obviously the need for a blockchain supported securities environment is necessary as the majority of the issues on these site crashed following this announcement, revealing one of the fundamental flaws we have previously identified.

I am also aware of "bitshares" and "colorcoins" though I have spoken to the creator of "Bitshares" I believe his projects differs in scope than this.

I will read more into your questions later -

Just a thought I had over the weekend - I think using a BTC or LTC blockchain clone would be fine with modifications to support initial "issuance" as a "genesis block" or "pre-mining" determination. The issue being that having multiple sets of securities running their own block-chains exposes them to all sorts of attacks due to the disparate nature of their mining (thus lower difficulty) - so it might be necessary to consider a sort of "controlled" mining environment where a key is used to "unlock" the mining so to speak for trusted miners whom earn as a payout of shares...

[bitcoinstarter]

Let me know how I can help. If you want to leverage any of my brand name toward this let me know as I'm currently seeking a way to integrate IPO's/Stock into the platform .  I'll be watching this thread.

[jordan.dev]

Let me know how I can help. If you want to leverage any of my brand name toward this let me know as I'm currently seeking a way to integrate IPO's/Stock into the platform .  I'll be watching this thread.

awesome!

[prophetx]

Let me know how I can help. If you want to leverage any of my brand name toward this let me know as I'm currently seeking a way to integrate IPO's/Stock into the platform .  I'll be watching this thread.

Awesome, I have actually had you in mind as I think this would be very useful for you.

[prophetx]

Think we really need to get moving on this (not sure if you've seen but: http://thegenesisblock.com/btc-trading-corp-shutters-operations-cites-regulatory-environment/)

Obviously the need for a blockchain supported securities environment is necessary as the majority of the issues on these site crashed following this announcement, revealing one of the fundamental flaws we have previously identified.

I am also aware of "bitshares" and "colorcoins" though I have spoken to the creator of "Bitshares" I believe his projects differs in scope than this.

I will read more into your questions later -

Just a thought I had over the weekend - I think using a BTC or LTC blockchain clone would be fine with modifications to support initial "issuance" as a "genesis block" or "pre-mining" determination. The issue being that having multiple sets of securities running their own block-chains exposes them to all sorts of attacks due to the disparate nature of their mining (thus lower difficulty) - so it might be necessary to consider a sort of "controlled" mining environment where a key is used to "unlock" the mining so to speak for trusted miners whom earn as a payout of shares...

It was only a matter of time before the centralized stock exchanges would be targeted. I wrote about this a while back and still cannot believe that people did not think to put these on Tor....

And I agree about the controlled environment,  and in the future guys like bitcoinstarter or the ipo company can manage keys for mining service providers who are paid either in stock or btc fee for mining services. Perhaps some perpetual mining fund will find this as an extra source of income.

Note that professionalized mining operators would suffer legal and reputation repercussions if they were found to have launched or aided a double spend attack.

[markm]

The problem of how to secure a block chain is why coloured coins are so suitable for this kind of application. The whole blockchain thing is already taken care of for them.

-MarkM-

[prophetx]

The problem of how to secure a block chain is why coloured coins are so suitable for this kind of application. The whole blockchain thing is already taken care of for them.

-MarkM-

Yes but is the implementation ready or not?  From what I can tell it is not ready for prime time.  

I am looking at this from a market development perspective and my own research into uses of p2p tech, I could care less whether the car has a honda or chevy engine when only one of the engines is available today.

If colored coins cannot be done today but there is a need to handle p2p transfer of stock and debt equity, then the market need has to take precedence and people can deal with a migration later if color coins materialize as viable and a more efficient means.

Note that I agree that it would be better to use colored coins, due to the pre-existing network, but I just do not see any evidence of it being ready for use.

[bitcoinstarter]

Let me know how I can help. If you want to leverage any of my brand name toward this let me know as I'm currently seeking a way to integrate IPO's/Stock into the platform .  I'll be watching this thread.

Awesome, I have actually had you in mind as I think this would be very useful for you.

Yes, been talking to a few people how to bring something like this into the platform. Obviously, using the blockchain/decentralized type system with color coins or something along those lines. I'm glad to be part of this!

[jordan.dev]

The problem of how to secure a block chain is why coloured coins are so suitable for this kind of application. The whole blockchain thing is already taken care of for them.

-MarkM-

yeah I'd be interested to see what the options are around "coloured coins" and if it fits the needs no need to "reinvent the wheel" - Any recommended reading??