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I’m reluctant to be ‘that guy’, but it really seems like this space is ripe for disruption by a blockchain solution. Surely a stock can be modelled almost dire

I’m reluctant to be ‘that guy’, but it really seems like this space is ripe for disruption by a blockchain solution. Surely a stock can be modelled almost directly as a scarce digital asset token traded anywhere or exchanged directly if desired. Voting rights could be implemented with a smart contract.

jqpabc123 6y ago
Sorry, blockchain is still a solution in search of a real world problem. Stock trades happen in real time or as close to it as possible --- and at extremely high volumes at times. Any delay can cost someone a lot of money. No one wants to wait for a blockchain to try and reach a consensus.
- aserafini 6y ago
  My very basic understanding is that Robinhood is only creating an illusion for its customers that the stocks are settling instantly: in reality it can still takes days behind the scenes to really exchange shares.
  - jqpabc123 6y ago
    No one waits days to buy/sell stocks. Average execution time with the top brokers is a fraction of second. https://www.brokerage-review.com/investing-firm/broker-trade-execution-time-and-quality.aspx https://www.brokerage-review.com/investing-firm/broker-trade...
    - aserafini 6y ago
      But as far as I understand it, the actual transfer of the underlying shares does not happen in a fraction of a second. The only thing that happens in a fraction of a second is an agreement between two parties to settle some shares in the near future. Executing a trade is not the same thing as the underlying instrument changing hands, which is still slow.
      - jqpabc123 6y ago
        Nowadays, the underlying instrument (i.e. a fancy piece of paper) rarely ever changes hands. It's possible to get it (with some delay) but most people don't bother. The digital/electronic record of the trade and the transfer of monetary funds between accounts is generally sufficient to establish ownership and both happen in near real time under SEC regulations between registered brokers. Basically, if the cross checked double entry accounts of buyer, seller and their brokers all agree that the trade took place, that is good enough for most folks and the SEC. Day traders can and often do buy and sell a stock multiple times in a day without delay.
dkersten 6y ago
Sure, it could be implemented like that, but why? What would any of the players who could do something like this have to gain from it? There are simpler ways to implement these things, if you don't have a requirement for a distributed ledger where each actor is untrusted.
mrlala 6y ago
If you aren't worried about losing your assets that blockchain is great. You can misplace your key, someone can steal from you, and no one can fix it for you. Wow, why haven't we moved to this system before now! There's a reason banks, exchanges, clearing brokers, etc all exist. It might cost money and have redtape up the wazoo but you cannot argue it makes it so you basically don't have to ever worry about a thing with your money/portfolio etc.
bsder 6y ago
> I’m reluctant to be ‘that guy’, but it really seems like this space is ripe for disruption by a blockchain solution. No. You just need a bog-standard, centralized solution actually implemented. The problem isn't tech--it's simply getting the legacy financial stuff up to circa Y2K programming standards.

jqpabc123 6y ago

Sorry, blockchain is still a solution in search of a real world problem. Stock trades happen in real time or as close to it as possible --- and at extremely high volumes at times. Any delay can cost someone a lot of money. No one wants to wait for a blockchain to try and reach a consensus.

aserafini 6y ago
My very basic understanding is that Robinhood is only creating an illusion for its customers that the stocks are settling instantly: in reality it can still takes days behind the scenes to really exchange shares.
- jqpabc123 6y ago
  No one waits days to buy/sell stocks. Average execution time with the top brokers is a fraction of second. https://www.brokerage-review.com/investing-firm/broker-trade-execution-time-and-quality.aspx https://www.brokerage-review.com/investing-firm/broker-trade...
  - aserafini 6y ago
    But as far as I understand it, the actual transfer of the underlying shares does not happen in a fraction of a second. The only thing that happens in a fraction of a second is an agreement between two parties to settle some shares in the near future. Executing a trade is not the same thing as the underlying instrument changing hands, which is still slow.
    - jqpabc123 6y ago
      Nowadays, the underlying instrument (i.e. a fancy piece of paper) rarely ever changes hands. It's possible to get it (with some delay) but most people don't bother. The digital/electronic record of the trade and the transfer of monetary funds between accounts is generally sufficient to establish ownership and both happen in near real time under SEC regulations between registered brokers. Basically, if the cross checked double entry accounts of buyer, seller and their brokers all agree that the trade took place, that is good enough for most folks and the SEC. Day traders can and often do buy and sell a stock multiple times in a day without delay.

dkersten 6y ago

Sure, it could be implemented like that, but why? What would any of the players who could do something like this have to gain from it? There are simpler ways to implement these things, if you don't have a requirement for a distributed ledger where each actor is untrusted.

mrlala 6y ago

If you aren't worried about losing your assets that blockchain is great. You can misplace your key, someone can steal from you, and no one can fix it for you. Wow, why haven't we moved to this system before now! There's a reason banks, exchanges, clearing brokers, etc all exist. It might cost money and have redtape up the wazoo but you cannot argue it makes it so you basically don't have to ever worry about a thing with your money/portfolio etc.

bsder 6y ago

> I’m reluctant to be ‘that guy’, but it really seems like this space is ripe for disruption by a blockchain solution. No. You just need a bog-standard, centralized solution actually implemented. The problem isn't tech--it's simply getting the legacy financial stuff up to circa Y2K programming standards.