Since Bitcoin went mainstream, a large number of people have begun questioning whether the currency could also be used in the trading of shares in private companies on the stock market. So far, many people stayed away from the idea because of the volatile nature of the cryptocurrency, but the stock exchanges operator NASDAQ OMX Group is a strong Bitcoin believer, which is currently evaluating Blockchain, in order to see if the technology behind the digital currency can actually be used for trading.
In the case that the company’s effort ends up being successful, then the trading of financial assets will most likely be revolutionized from all the points of view. This will not only replace the technology that is currently being used, but it’ll also make a large number of slow processes obsolete, thus making trading a more dynamic activity.
The chief executive of NASDAQ went ahead and declared that utilizing the Blockchain is a natural digital evolution for managing stock trades, but also that the technology has the potential of benefiting both the global capital markets and the company’s clients as well.
To start things off, the company will test out the technology in the NASDAQ Private Market, where private companies can handle pre-IPO trading and then move on to the public ledger. However, many may not understand how the Blockchain technology has the potential of revolutionizing the stock market. Well, as soon as someone makes a transaction on the stock market, a digital representation of the share certifications could then be introduced into the popular minute Bitcoin transactions, which in turn, will facilitate an immediate transfer of stock ownership, which can be checked both by the buyer, but also by the seller, to ensure that the transaction was carried out as planned.
However, there are also a good number of risks that the folks at NASDAQ have to keep a close eye on. Stock market trading platforms are often attacked by hackers as a direct result of the large transactions, so hackers may want to initiate a takeover of the network, which definitely won’t benefit the system.
If you’ve been keeping an eye on the latest stock market developments, then chances are that you have noticed that stock exchanges are currently displaying more interest towards Bitcoin and the potential that it has. A relevant example would be that the New York Stock Exchange recently announced a large investment in Coinbase, which is one of the biggest exchanges around, hence further promoting the idea that the cryptocurrency is getting a bigger number of believers.
Based on everything that has been outlined so far, what do you personally think about NASDAQ using Blockchain technology to facilitate future trades? Let us know your thoughts.