In a simplified way you can use the Bitcoin scripting system to make binding bids and offers without needing a central exchange. And you can achieve person to

In a simplified way you can use the Bitcoin scripting system to make binding bids and offers without needing a central exchange. And you can achieve person to person atomic swaps of currency for securities – delivery versus payment – without needing a custodian. Let's assume MSFT shares are represented as specially encoded satoshis. Below you can find is examples of (fictional) MSFT shares [1] [2] being represented on the blockchain in that way. I'll use an example of CounterParty, which is a meta-layer on the blockchain. The Counterparty protocol acts as an escrow service, and thereby eliminates counterparty risk from the exchange of assets. [1] http://blockscan.com/assetInfo/MSFT http://blockscan.com/assetInfo/MSFT [2] https://coindaddy.io/search?network=xcp&q=MSFT https://coindaddy.io/search?network=xcp&q=MSFT Now that MSFT asset is stored on the bitcoin blockchain. Actually it is encoded as an OP_RETURN script in the transaction, an breakdown of such an asset you can see here: 434e545250525459|00000000|000000000004fadf000000174876e800000000000000000000000000 | | | | | └── All of this is the operation data (maximum 28 bytes) | └──────────────── This is the transaction type identifier (4 bytes) └───────────────────────────────── The string CNTRPRTY in hexadecimal (8 bytes) A breakdown of the sending of such an asset on the bitcoin blockchain: 000000000004fadf|000000174876e800 | | | └───── quantity (8 bytes) └────────────────── asset name (8 bytes) There's some further reading in the links below in more depth than I could hope to go into here: http://counterparty.io/docs/counterparty_features/#overview http://counterparty.io/docs/counterparty_features/#overview http://counterparty.io/docs/counterparty_features/#protocol-based-trustless-escrow http://counterparty.io/docs/counterparty_features/#protocol-...