Stock Market on Blockchain

Stock Market on Blockchain

Introduction

Blockchains are built on a series of innovations in organizing and sharing data. The objective is to make one version of the reality, used by all participants, containing a far richer dataset than exists in any one system these days. This will inturn enable new industry processes to be developed, based on the use of transparent real-time data, and the expansion of auto-executing ‘smart’ contracts, with business logic encoded into the ledger.
If we talk about the Stock market, Blockchain offers huge potential for tracing securities lending, repo and margin financing and monitoring systemic risks.

Beyond using the technology as an operating procedure for an exchange system, the blockchain has also found, through cryptocurrencies, a use as a way of raising capital, in place of traditional stock and equity markets.

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1. Primary Market activities

Beyond using the technology as an operating procedure for an exchange system, the blockchain has also found, through cryptocurrencies, a use as a way of raising capital, in place of traditional stock and equity markets.

For several months already, a new form of public offering has been flourishing, not only because they deal with start-ups, but mainly because they are in the form of cryptocurrencies, like Bitcoin or Ether, from where comes the initialism ICO – Initial Coin Offering, with reference to IPO – Initial Public Offering. These operations are a quick way of securing financing – capital can be raised in as little as a few hours to a few days – for entrepreneurs in the world of blockchain, allowing them to test their ideas or project on a community of experts.

Taking into account the potential of this technology, these capital raise also attract more and more investors looking for added value, even if they do not always understand the technological specificities of the project.

2. Secondary Market activities and Trading

The blockchain has not only prompted innovation on the primary market, with the appearance of ICOs: it may also have a revolutionary effect on secondary market and trading activities.

The distinctive aspect of this process largely relies on the manner in which an efficient process of order matching and price formation is conceived. Essentially, the ability to use the blockchain, with an added value, for negotiating activities, depends on two factors: First, the nature of the financial instruments traded and second is the nature of the intended
negotiating activity.

Using the blockchain for trading activities is conceivable even before the creation of the transaction for other instruments. This is typically the case for instruments whose trading price is purely bilateral.

The possibility of using a blockchain for trading purposes thus depends on multiple factors. Nevertheless, it can be expected that the application of the advantages provided by this technology to other segments of the value chain will have a major effect on trading activities.
In particular, by streamlining the post-trading phase, blockchain is bound to have as much of an impact on the demand as on the supply of capital, by prompting a growing number of capital issuances on the markets and by increasing investment in and exchanges of instruments in circulation and therefore the volumes traded.

3. Post-trading activities

Blockchain can also simplify the landscape of traditional organisation and operation of post- trading activities.

In the traditional scheme of things, a transaction’s life cycle on the stock market requires the presence of a market intermediary, a trading platform and various post-trading infrastructures and intermediaries, including a clearing-house, a settlement agent, a depository and a central depository.

In the new model, the instruction to buy or sell a financial security on a stock market follows a complex cycle, both in technical and legal terms, due to the presence of these various entities. It is even sometimes difficult to track an order all the way from the investor to the delivery or payment: the clearing house makes it impossible to track an individual instruction due to multilateral settlement methods.

In financial markets, the steady disappearance of paper securities and their replacement with virtual assets has led to the replacement of physical settlement using cash, with digital trades. The need remains however, for a ‘golden record’, a way for market infrastructures and intermediaries to keep their individual databases updated by communicating with the other institutions involved at other levels of post-trading, in order to be able to reflect each transaction in the records for each intermediary/infrastructure. Therefore, golden record in the financial market would be a well innovated blockchain app that caters to the people of Stock market.

In case, you are looking to understand blockchain implications in your business sector in more detail, drop us an email on [email protected] or schedule a free consultation with our team of blockchain experts who can guide you through the blockchain implementation in a specific use case.

BLOCKCHAIN APPLICATIONS IN MUSIC INDUSTRY

BLOCKCHAIN APPLICATIONS IN MUSIC INDUSTRY

While music lovers have welcomed digitisation as the democracy of the industry, music industry has remained the same. Piracy through illegally downloaded content digs into the artist’s royalties and labels’ revenue. To add to this is the lack of a rights management system, which leads to loss of revenue to the artist and company. The revenue takes abnormally long time to reach the artiste. Area of concern is unpaid royalties, which are often suspended in various stages due to missing information or rights ownership

TRANSPARENCY

Artists are also suffering by a lack of sales transparency where although Digital Service Providers report a huge volume of transactions, they end up receiving payment for only 20 to 40 percent of these transactions. This has led to several artists choosing to keep their music off such on-demand streaming services, causing notable gaps in the libraries of popular 

These very areas are where Blockchain can make a difference. As a publically assessable and decentralised database that is distributed across the internet, Blockchain maintains permanent and undeletable records in cryptographic form. Transactions occur across a peer-to-peer network, and are computed, verified and recorded using an automated consensus method, eliminating the need for an intermediate or third party to manage or control information. The very architecture of Blockchain being distributed and peer-to-peer brings immense potential to deal with the present woes affecting the music industry.

DIGITAL RIGHTS DATABASES

Blockchain can bring Positive Change in Digital Right Databases

A main area in which Blockchain can bring immense and positive change is in the creation of a digital rights database. Digital rights expression is one of the main issues afflicting present day music industry. Identifying copyright of a song and defining how royalties should be split between songwriters, performers, publishers and producers is difficult in digital space. Artists lose out on royalties due to complicated copyright scene. Blockchain’s distributed ledger system, which ensures that no single entity can claim ownership, provides the perfect rightfull solution. Secure files with all relevant information such as composition, lyrics, linear notes, cover art, licensing, etc., can be encoded onto the Blockchain creating a permanent and inerasable record.

PAYMENT OF ROYALTIES

It has been observed that Blockchain technology can also be used to facilitate automatic payment of royalties through ‘smart contracts’. And the ‘smart contract’ encoded in the Blockchain enables the proceeds to directly reach the artists as well as the producers, writers and engineers. Such a system, removes the need for intermediaries and provides a transparent ecosystem that ensures all stakeholders receive their fair share of royalties.

PIRACY

Digitisation of the music and media industry has also left artists and producers to deal with the rampant problem of piracy, with users finding innovative ways to copy, record and distribute content, without compensating the copyright holders. The immutable security that Blockchain technology provides can be utilised to prevent it. By encode tracks on the Blockchain, which ensures that a unique record is created every time a song is played preventing copying of the content.

DISRUPTION

The music industry, disrupted by digitisation, is currently in a grappling due to age-old structures that are unable to cope with the present day digital demands. With this Blockchain technology offers solutions to build a healthy and robust ecosystem that can benefit both artists and producers. While there is still a lot to be explored on how Blockchain can revolutionise the music and media industry, it is clear that Blockchain technology is something that the industry is in dire need of.

Blockchain Applications in Optimizing Energy Distribution

Blockchain Applications in Optimizing Energy Distribution

The Blockchain Technology can ensure open and well-timed exchange of energy for value, restoring trust between consumers and suppliers. These solutions will, in turn, bring about an increase in competition among service providers and drop service costs drastically.

The main purpose of Blockchain Technologies is to remove and replace the requirements for such intermediaries with a distributed digital network users who work in tandem to verify transactions and safeguard the integrity of the ledger. This allows records of financial transactions to be distributed to several other computers that store data locally.

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Trading of oil and gas reserves

The purpose is to run independent blockchain oil and gas trades alongside their live trading platforms. This test identified an error in a trading volume quickly, saving time that would have been spent rectifying the error. It is also believed that blockchain technology can ensure trading systems are secure from hacks and fraudulent trades.

Asset Integrity

A noteworthy upcoming application works on data gathered from sensors placed on equipment and other assets. The idea is to use them to identify defects and prevent losses. The system also helps gather data via blockchain IoT to develop a model that predicts events, enabling anticipatory planning. This ensures the promotion of asset integrity and worker safety.

Energy Distribution

The world is steadily shifting from dependence on fossil fuels and other harmful sources of energy. Solar energy is at the forefront, followed by other new alternative industries such as wind and hydrogen systems.People who own solar panels are given the capacity to sell the excess produced electricity to their neighbors. Blockchain creates this first peer-to-peer energy trading  system for electricity assure an accurate record of transactions. It further optimizes accounting and metering through decentralization.

Payment Systems

Another application of blockchain in the energy distribution industry is the design of cryptocurrencies for service payments. Several companies have launched model projects to facilitate such transactions. Some companies have even extended the use case of blockchains beyond just payments. An also notable mention is the development of smart contracts that makes it feasible for individuals to seamlessly trade excess energy. With surplus energy sprouting across the globe from biotech ventures, blockchain will unlock the possibilities. Now the accounting for distribution and consumption no longer must be a matter of heavy software and expensive machinery.

As of now the utilization of blockchain technology in energy distribution industry points to lots of benefits.

It is evident that the wave of blockchain technology is a change that will challenge present service delivery models and the effects have already apparently showing in the energy and power sector and support is building.

If you are looking to learn more about Blockchain Applications in Optimizing Energy Distribution, drop us an email on [email protected] or schedule a free consultation with our team of blockchain experts who can guide you through the blockchain implementation in a specific use case.