7 ms·

Daimler Uses Blockchain to Issue Bonds

67 points by caublestone 9y ago

revicon 9y ago
Twitter link to article to bypass paywall: https://twitter.com/infosblockchain/status/885940500666003456 https://twitter.com/infosblockchain/status/88594050066600345...
- downandout 9y ago
  I didn't run into a paywall, perhaps because it's on the blogs subdomain. But if anyone needs it, here is the paywall bypass code for all WSJ articles: http://salzeko.com/wsj http://salzeko.com/wsj
empath75 9y ago
Is this on ethereum?
- deleted 9y ago
  [deleted]
- JumpCrisscross 9y ago
  > Is this on ethereum? No. "In February, we joined the Hyperledger Project — a cross-industry initiative — to drive blockchain technology and open standards in collaboration with other firms" [1]. [1] https://blogs.wsj.com/cfo/2017/07/12/daimler-uses-blockchain-to-issue-bonds/ https://blogs.wsj.com/cfo/2017/07/12/daimler-uses-blockchain...
asdfaoeu 9y ago
> Regulators do not yet allow issuances via blockchain only, so we had to test it in parallel with the conventional issuance process.
WheelsAtLarge 9y ago
This is proof of concept. This changes everything. The article talks about the company not being ready to use Blockchain to issue all it's bonds due to regulatory questions that still need to be answered but , i suspect, it's only going to be years not decades when this will happen. This spells out big problems to the staff employees associated with Finance. Anyone in the Financial Industry should start getting ready for the big Finance disruption that's coming in the near future.
- stanleydrew 9y ago
  This is an honest question: who's jobs do we think are going to be replaced by issuing bonds on the blockchain? The people drafting the bond agreements?
  - legolassexyman 9y ago
    The "jobs" this technology replaces were computerized in the 1960s and 1970s. The application of the blockchain only speeds up settlement because there is a single ledger between multiple parties.
    - subway 9y ago
      The blockchain also ups the level of auditability.
      - justonepost 9y ago
        Yep! A big deal. You can see the lineage of transactions and actually always know who owns what. Be good for stocks too, which are a total and complete nightmare when it comes to who owns what.
        52-6F-62 9y ago
        This is one of the things that really interests me. It's a tool to boost honesty in traditionally exploitable aspects of business. Hell, with something like that the public might be able to viably reduce financial regulation -- or rather preventative procedural bureaucracy -- because of the ability to trace business transactional practices.
legolassexyman 9y ago
This is the main application for Bitcoin IMO: custody and trade settlement in securities. I have wanted to do this exact thing, issue bonds on a blockchain for some industry or government, since I found out about Bitcoin. Unfortunately, I do not have the kinds of connections necessary to be in the same room as major corporate bond sellers. Between this news and the DTCC using blockchain for CDS it seems to me that Bitcoin is going to get left behind by the old world companies it sought to replace. Blockstream seems too happy to sit on their hands while the speculative value of Bitcoin increases, not realizing that the chance to actually matter in the world of finance is slipping through their fingers. Bad news for Bitcoin: http://m.nasdaq.com/article/dtcc-to-launch-blockchain-credit-default-swaps-reporting-in-early-2018-cm794771 http://m.nasdaq.com/article/dtcc-to-launch-blockchain-credit...
- atomical 9y ago
  Why wouldn't they use Ethereum?
  - subway 9y ago
    It's more likely they would use their own private blockchain. (Something ethereumish, like JP Morgan's Quorum, or Hyperledger Fabric).
    - atomical 9y ago
      I was trying to draw that point out. Sometimes news like this is used to pump crypto coins.
      - jjn2009 9y ago
        hyperledger fabric is not a 'coin'.
  - legolassexyman 9y ago
    Ethereum's main selling point is it lets you issue illegal unregistered securities. Why would a real company want to associate with that? Also the lead developer is some kid who believes very much in moving fast and breaking things. This philosophy may work for a social network site but not for other people's money. How many terrible bugs have been discovered in Ethereums short history? Too many. Additionally the size of its blockchain has already passed Bitcoin. It's file size is growing so fast and will pose a serious technical problem.
cowmanjoe 9y ago
How is something like this funded? Charity organizations? Is Google just paying for it?
- harryh 9y ago
  It's a joint project by a bunch of major financial firms.
- function_seven 9y ago
  I think you intended to post this in another thread?
bo1024 9y ago
I'm not a blockchain "expert", but this seems somewhere between misguided and insane to me. How could this possibly better than a secure web server and http user interface by any metric? - security: how could this possibly be better than a system under your own IT's control? - security part 2: introduces a whole new set of vulnerabilities and ways for things to go wrong. e.g. a miswritten "smart" contract. - speed: how could this be faster than a web interface and a single server? Blockchain solves one main problem: Decentralization. The reason for decentralization is the lack of a single trusted authority who says e.g. whether a particular transaction has occurred or not. In this setting you still have and need Daimler to be the trusted authority (unless I misunderstand), so the sole raison d'etre for blockchain is gone. When you add that to all the downsides and security risks ... let me know if there is an easy way to bet against this.
- omio 9y ago
  I would say the problem they are trying to solve is security settlement between different institutions. I guess right now each institution has their own database of who owns what and it's difficult to transfer ownership between them. What if there was one or many massive global shared ledgers all these institutions ran nodes for? You could transfer ownership of a security between someone in China and Europe instantly.
  - thisisit 9y ago
    I am really confused by this logic. So it's better to ask companies to invest in implementing "blockchain" within their network instead say upgrading their databases or their infrastructure to the current technology level? Then they could simple have API/Middleware calls between systems which can do this even more efficiently.
    - ThomPete 9y ago
      Yes cause it allow for a distributed validation or concensus model rather than centralized. This open up for a number of opportunities as you dont need centralized validator
omio 9y ago
Is this what they are going to use? https://www.hyperledger.org/projects/sawtooth/bond-case-study https://www.hyperledger.org/projects/sawtooth/bond-case-stud...
- jjn2009 9y ago
  It's hard to say which implementation will be used but the fabric project from hyperledger seems to have the most momentum.

67 points by caublestone 9y ago

Twitter link to article to bypass paywall: https://twitter.com/infosblockchain/status/885940500666003456 https://twitter.com/infosblockchain/status/88594050066600345...

downandout 9y ago
I didn't run into a paywall, perhaps because it's on the blogs subdomain. But if anyone needs it, here is the paywall bypass code for all WSJ articles: http://salzeko.com/wsj http://salzeko.com/wsj

empath75 9y ago

Is this on ethereum?

deleted 9y ago
[deleted]
JumpCrisscross 9y ago
> Is this on ethereum? No. "In February, we joined the Hyperledger Project — a cross-industry initiative — to drive blockchain technology and open standards in collaboration with other firms" [1]. [1] https://blogs.wsj.com/cfo/2017/07/12/daimler-uses-blockchain-to-issue-bonds/ https://blogs.wsj.com/cfo/2017/07/12/daimler-uses-blockchain...

asdfaoeu 9y ago

> Regulators do not yet allow issuances via blockchain only, so we had to test it in parallel with the conventional issuance process.

WheelsAtLarge 9y ago

This is proof of concept. This changes everything. The article talks about the company not being ready to use Blockchain to issue all it's bonds due to regulatory questions that still need to be answered but , i suspect, it's only going to be years not decades when this will happen. This spells out big problems to the staff employees associated with Finance. Anyone in the Financial Industry should start getting ready for the big Finance disruption that's coming in the near future.

stanleydrew 9y ago
This is an honest question: who's jobs do we think are going to be replaced by issuing bonds on the blockchain? The people drafting the bond agreements?
- legolassexyman 9y ago
  The "jobs" this technology replaces were computerized in the 1960s and 1970s. The application of the blockchain only speeds up settlement because there is a single ledger between multiple parties.
  - subway 9y ago
    The blockchain also ups the level of auditability.
    - justonepost 9y ago
      Yep! A big deal. You can see the lineage of transactions and actually always know who owns what. Be good for stocks too, which are a total and complete nightmare when it comes to who owns what.
      - 52-6F-62 9y ago
        This is one of the things that really interests me. It's a tool to boost honesty in traditionally exploitable aspects of business. Hell, with something like that the public might be able to viably reduce financial regulation -- or rather preventative procedural bureaucracy -- because of the ability to trace business transactional practices.

legolassexyman 9y ago

This is the main application for Bitcoin IMO: custody and trade settlement in securities. I have wanted to do this exact thing, issue bonds on a blockchain for some industry or government, since I found out about Bitcoin. Unfortunately, I do not have the kinds of connections necessary to be in the same room as major corporate bond sellers. Between this news and the DTCC using blockchain for CDS it seems to me that Bitcoin is going to get left behind by the old world companies it sought to replace. Blockstream seems too happy to sit on their hands while the speculative value of Bitcoin increases, not realizing that the chance to actually matter in the world of finance is slipping through their fingers. Bad news for Bitcoin: http://m.nasdaq.com/article/dtcc-to-launch-blockchain-credit-default-swaps-reporting-in-early-2018-cm794771 http://m.nasdaq.com/article/dtcc-to-launch-blockchain-credit...

atomical 9y ago
Why wouldn't they use Ethereum?
- subway 9y ago
  It's more likely they would use their own private blockchain. (Something ethereumish, like JP Morgan's Quorum, or Hyperledger Fabric).
  - atomical 9y ago
    I was trying to draw that point out. Sometimes news like this is used to pump crypto coins.
    - jjn2009 9y ago
      hyperledger fabric is not a 'coin'.
- legolassexyman 9y ago
  Ethereum's main selling point is it lets you issue illegal unregistered securities. Why would a real company want to associate with that? Also the lead developer is some kid who believes very much in moving fast and breaking things. This philosophy may work for a social network site but not for other people's money. How many terrible bugs have been discovered in Ethereums short history? Too many. Additionally the size of its blockchain has already passed Bitcoin. It's file size is growing so fast and will pose a serious technical problem.

cowmanjoe 9y ago

How is something like this funded? Charity organizations? Is Google just paying for it?

harryh 9y ago
It's a joint project by a bunch of major financial firms.
function_seven 9y ago
I think you intended to post this in another thread?

bo1024 9y ago

I'm not a blockchain "expert", but this seems somewhere between misguided and insane to me. How could this possibly better than a secure web server and http user interface by any metric? - security: how could this possibly be better than a system under your own IT's control? - security part 2: introduces a whole new set of vulnerabilities and ways for things to go wrong. e.g. a miswritten "smart" contract. - speed: how could this be faster than a web interface and a single server? Blockchain solves one main problem: Decentralization. The reason for decentralization is the lack of a single trusted authority who says e.g. whether a particular transaction has occurred or not. In this setting you still have and need Daimler to be the trusted authority (unless I misunderstand), so the sole raison d'etre for blockchain is gone. When you add that to all the downsides and security risks ... let me know if there is an easy way to bet against this.

omio 9y ago
I would say the problem they are trying to solve is security settlement between different institutions. I guess right now each institution has their own database of who owns what and it's difficult to transfer ownership between them. What if there was one or many massive global shared ledgers all these institutions ran nodes for? You could transfer ownership of a security between someone in China and Europe instantly.
- thisisit 9y ago
  I am really confused by this logic. So it's better to ask companies to invest in implementing "blockchain" within their network instead say upgrading their databases or their infrastructure to the current technology level? Then they could simple have API/Middleware calls between systems which can do this even more efficiently.
  - ThomPete 9y ago
    Yes cause it allow for a distributed validation or concensus model rather than centralized. This open up for a number of opportunities as you dont need centralized validator

omio 9y ago

Is this what they are going to use? https://www.hyperledger.org/projects/sawtooth/bond-case-study https://www.hyperledger.org/projects/sawtooth/bond-case-stud...

jjn2009 9y ago
It's hard to say which implementation will be used but the fabric project from hyperledger seems to have the most momentum.