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As the author mentioned, shareholder voting is ripe for disruption with a blockchain based system. What is the market size at stake for the middle-man companie

by jlj 10y ago

As the author mentioned, shareholder voting is ripe for disruption with a blockchain based system. What is the market size at stake for the middle-man companies?

simoncion 10y ago
The author also mentioned -you know- building a solution on 1980's-era tech, namely a single database of actual (rather than proxy) shareholders and contact information/voting instructions/other useful info: "You could just, you know, build a big database of who owns shares, and transfer shares on that database, and not rely on a system in which people own shares in brokers' databases and brokers own shares in DTC's database and DTC owns shares in companies' (transfer agents') databases. The big database could send out voting instructions directly to the shareholders, cutting back on the outsourcing. You could build a new system, from the ground up, corresponding to the actual practices of finance rather than to the archaisms that they're built on." [0] No need to go all blockchain and shit, just consolidate the mess of systems into a single well-designed and well thought-out one. [0] That 'graph is -incidentally- the 'graph that immediately precedes the one that mentions The Blockchain(TM).
- ajdlinux 10y ago
  In countries that aren't the US, things tend to be somewhat closer to this situation... Here in Australia, for example we've basically completely abolished stock certificates for publicly traded companies, and we don't have any equivalent of DTC as far as I am aware. Nominee holdings still exist, but it's significantly less common than in the US, and it's significantly more common for shareholders to be directly registered. http://www.computershare.com/News/TransparencyofShareOwnershipShareholderCommunicationsandVotinginglobalcapitalmarkets_12032014.pdf http://www.computershare.com/News/TransparencyofShareOwnersh... is an interesting read.
  - kasey_junk 10y ago
    When reading that, it's important to recognize it was compiled by Computershare, a transfer agent, who in some ways compete with DTC. Computershare has virtual monopolies in that business globally. I don't think they are wrong, but they aren't a disinterested party.
- shuzchen 10y ago
  So what I imagine when we talk about a single database is just some mapping of stock shares to owner. So to keep track of who owns what share, when some shares gets transferred you just update each row accordingly. (Imagine a stock with 10 total shares and X sells to Y shares #1, #2, #3, you'd just update the table and set owner=Y where share id is in (1, 2, 3)) But for such important financial data you don't want to just update your table and throw away your history. You'd like to also keep a record of what changes occurred. Maybe you'd like to audit your database, and find out the path of ownership from which a current owner obtained their shares. Maybe you'd like to make your history immutable, so as to not have headaches later on trying to validate the current state, or to discourage tampering with the database. So now you have a datastore where the current state relies on an ever-growing stack of immutable changesets. This sounds exactly like what we talk about when we talk about blockchains. There are people who define a blockchain more strictly (e.g, The Blockchain(TM) with decentralization and crypto), but I think the author was going for the former meaning. That is to say, you can implement a blockchain and still be using a single well-designed and well thought-out database.
  - simoncion 10y ago
    > So what I imagine when we talk about a single database is just some mapping of stock shares to owner. Mmhmm. Keep simple things as simple as possible. > So now you have a datastore where the current state relies on an ever-growing stack of immutable changesets. This sounds exactly like what we talk about when we talk about blockchains. Well, if that's what a "blockchain" is, then git [0] was doing blockchains way before they were cool. > There are people who define a blockchain more strictly (e.g, The Blockchain(TM) with decentralization and crypto) I can see not having a distributed ledger, but if you eject the cryptographic part of it then you don't get any of the tamper resistance. Without that, all you have is a linked list. And -as we all know- "linked list" is a much less sexy phrase than "blockchain". [0] And -if we drop the cryptographically verifiable history part- pretty much every VCS ever.
  - Natanael_L 10y ago
    It also sounds like Git and other version control systems with hash chains. What Bitcoin did different was adding chain selection using accumulated proof-of-work, incentivized using scarce digital tokens within the same database.

by jlj 10y ago

As the author mentioned, shareholder voting is ripe for disruption with a blockchain based system. What is the market size at stake for the middle-man companies?

simoncion 10y ago

The author also mentioned -you know- building a solution on 1980's-era tech, namely a single database of actual (rather than proxy) shareholders and contact information/voting instructions/other useful info: "You could just, you know, build a big database of who owns shares, and transfer shares on that database, and not rely on a system in which people own shares in brokers' databases and brokers own shares in DTC's database and DTC owns shares in companies' (transfer agents') databases. The big database could send out voting instructions directly to the shareholders, cutting back on the outsourcing. You could build a new system, from the ground up, corresponding to the actual practices of finance rather than to the archaisms that they're built on." [0] No need to go all blockchain and shit, just consolidate the mess of systems into a single well-designed and well thought-out one. [0] That 'graph is -incidentally- the 'graph that immediately precedes the one that mentions The Blockchain(TM).

ajdlinux 10y ago
In countries that aren't the US, things tend to be somewhat closer to this situation... Here in Australia, for example we've basically completely abolished stock certificates for publicly traded companies, and we don't have any equivalent of DTC as far as I am aware. Nominee holdings still exist, but it's significantly less common than in the US, and it's significantly more common for shareholders to be directly registered. http://www.computershare.com/News/TransparencyofShareOwnershipShareholderCommunicationsandVotinginglobalcapitalmarkets_12032014.pdf http://www.computershare.com/News/TransparencyofShareOwnersh... is an interesting read.
- kasey_junk 10y ago
  When reading that, it's important to recognize it was compiled by Computershare, a transfer agent, who in some ways compete with DTC. Computershare has virtual monopolies in that business globally. I don't think they are wrong, but they aren't a disinterested party.
shuzchen 10y ago
So what I imagine when we talk about a single database is just some mapping of stock shares to owner. So to keep track of who owns what share, when some shares gets transferred you just update each row accordingly. (Imagine a stock with 10 total shares and X sells to Y shares #1, #2, #3, you'd just update the table and set owner=Y where share id is in (1, 2, 3)) But for such important financial data you don't want to just update your table and throw away your history. You'd like to also keep a record of what changes occurred. Maybe you'd like to audit your database, and find out the path of ownership from which a current owner obtained their shares. Maybe you'd like to make your history immutable, so as to not have headaches later on trying to validate the current state, or to discourage tampering with the database. So now you have a datastore where the current state relies on an ever-growing stack of immutable changesets. This sounds exactly like what we talk about when we talk about blockchains. There are people who define a blockchain more strictly (e.g, The Blockchain(TM) with decentralization and crypto), but I think the author was going for the former meaning. That is to say, you can implement a blockchain and still be using a single well-designed and well thought-out database.
- simoncion 10y ago
  > So what I imagine when we talk about a single database is just some mapping of stock shares to owner. Mmhmm. Keep simple things as simple as possible. > So now you have a datastore where the current state relies on an ever-growing stack of immutable changesets. This sounds exactly like what we talk about when we talk about blockchains. Well, if that's what a "blockchain" is, then git [0] was doing blockchains way before they were cool. > There are people who define a blockchain more strictly (e.g, The Blockchain(TM) with decentralization and crypto) I can see not having a distributed ledger, but if you eject the cryptographic part of it then you don't get any of the tamper resistance. Without that, all you have is a linked list. And -as we all know- "linked list" is a much less sexy phrase than "blockchain". [0] And -if we drop the cryptographically verifiable history part- pretty much every VCS ever.
- Natanael_L 10y ago
  It also sounds like Git and other version control systems with hash chains. What Bitcoin did different was adding chain selection using accumulated proof-of-work, incentivized using scarce digital tokens within the same database.