Bitcoin technology to be tested in stock market

May 12, 2015 //By Rich Pell
Bitcoin technology to be tested in stock market
NASDAQ OMX Group, the company that owns and operates the NASDAQ stock exchange (New York), has announced that it is testing a stock transaction system that uses the blockchain technology behind Bitcoin.

The initial application of the technology, expected later this year, will be used to expand and enhance the equity management capabilities of the company's NASDAQ Private Market platform, which is used by buyers and sellers of private company shares. These are typically shares that trade in the pre-IPO phase, before a company goes public.

Bitcoin's blockchain technology provides a cryptographically secure, shared public ledger of all transactions in the Bitcoin network. The NASDAQ implementation will be a blockchain-enabled ledger record-keeping technology designed to provide "extensive integrity, audit ability, governance and transfer of ownership capabilities" of private company securities.

NASDAQ is said to be one of the first large financial services companies to explore ways to leverage the blockchain in a non-currency manner. According to Bob Greifeld, NASDAQ CEO, "Utilizing the blockchain is a natural digital evolution for managing physical securities."

The potential uses for the blockchain technology - beyond currencies and finance - are vast. Earlier this year, IBM and Samsung unveiled their proof of concept for a system that uses the blockchain concept to build a distributed network of devices – a decentralized Internet of Things.

According to a paper on the subject published by IBM - Device democracy: Saving the future of the Internet of Things (PDF) - "the blockchain is the framework facilitating transaction processing and coordination among interacting devices. Each manages its own roles and behavior, resulting in an "Internet of Decentralized, Autonomous Things." All of this would be achieved without a central controller mediating among the devices.

For more, see the video (18:23) below where Paul Brody, formerly vice president and global electronics industry leader for IBM Global Business Services, discusses " Will smart devices survive and thrive in the future? " (Brody recently joined accounting/consulting firm Ernst & Young as the Americas strategy leader for the technology sector, where he will continue to focus on the blockchain and IoT, as well as wearable technologies,


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