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Your question is very valid and good. i think having it be decentralized is a good way to build trust and transparency. It also protects one against the market

Your question is very valid and good. i think having it be decentralized is a good way to build trust and transparency. It also protects one against the marketplace-operator acting against the interests of or favoring any one party. Consider how Amazon now exploits its marketplace for its own benefit by analyzing which products are doing well and making their own versions of these products. So, there is potential for the marketplace-operator to become non-neutral. I'm not sure how the NYSE started, but i suspect there are financial regulations governing its operations. These regulations take time to get established, and so in new fields having a decentralized marketplace that can guarantee neutrality (collectively) of the operators feels worthwhile. Does that make sense? i'm kinda on the fence myself, and trying to present the argument in-favor.

skybrian 7y ago
Okay, but you'd still have to compare it with the scheme used by certificate transparency, which also builds a public, verifiable log. I'd be pretty confident in an organization that does it that way.
blacksmith_tb 7y ago
That seems reasonable, but in a decentralized market don't we lose the ability to halt trading[1]? 1: https://www.sec.gov/fast-answers/answerstradinghalthtm.html https://www.sec.gov/fast-answers/answerstradinghalthtm.html
- pushtheenvelope 7y ago
  ooh that's a good question. I'd think of that on two levels: 1. a meta-level: all designs of systems have tradeoffs. There is no perfect system. So, by decentralizing we may have to tradeoff the ability to halt trading, in exchange for getting more openness, transparency and neutrality of the marketplace or its operators. 2. specific design: i think there may be ways of achieving this even in a decentralized fashion. Many use-cases of smart-contracts (i.e. a program run in a blockchain transaction) have envisioned the need for having an "oracle" or external data source. For example, flight-delay insurance contracts (e.g. on etherisc.com) that payout in case of a flight delay would need to get information from some flight-info APIs. To serve this need, there are projects for building decentralized-oracles (e.g. https://chain.link https://chain.link). Similarly, one can imagine the SEC creates an oracle through a system like ChainLink. This oracle has an api that indicates whether some asset's trading status is ON or OFF. Smart-contracts running the marketplace/exchange on the blockchain have code that reaches out to the SEC oracle before proceeding with a transaction to exchange or sell some asset (i'm describing this synchronously, but it could be done asynchronously).

skybrian 7y ago

Okay, but you'd still have to compare it with the scheme used by certificate transparency, which also builds a public, verifiable log. I'd be pretty confident in an organization that does it that way.

blacksmith_tb 7y ago

That seems reasonable, but in a decentralized market don't we lose the ability to halt trading[1]? 1: https://www.sec.gov/fast-answers/answerstradinghalthtm.html https://www.sec.gov/fast-answers/answerstradinghalthtm.html

pushtheenvelope 7y ago
ooh that's a good question. I'd think of that on two levels: 1. a meta-level: all designs of systems have tradeoffs. There is no perfect system. So, by decentralizing we may have to tradeoff the ability to halt trading, in exchange for getting more openness, transparency and neutrality of the marketplace or its operators. 2. specific design: i think there may be ways of achieving this even in a decentralized fashion. Many use-cases of smart-contracts (i.e. a program run in a blockchain transaction) have envisioned the need for having an "oracle" or external data source. For example, flight-delay insurance contracts (e.g. on etherisc.com) that payout in case of a flight delay would need to get information from some flight-info APIs. To serve this need, there are projects for building decentralized-oracles (e.g. https://chain.link https://chain.link). Similarly, one can imagine the SEC creates an oracle through a system like ChainLink. This oracle has an api that indicates whether some asset's trading status is ON or OFF. Smart-contracts running the marketplace/exchange on the blockchain have code that reaches out to the SEC oracle before proceeding with a transaction to exchange or sell some asset (i'm describing this synchronously, but it could be done asynchronously).