Share trading is one of the things that blockchain technology will have an effect on. And using the blockchain technology can likely enable greater trade accuracy and a shorter settlement process Online Financial Services Stock Trading.
In this article we will talk about the possible effects that the blockchain technology can have on share trading. Read on!
Gets rid of the middleman
Blockchain technology is one of the most exciting technology innovations that are being developed and improved right now. It has the potential to improve many processes within the financial sector, and that includes share trading.
Buying and selling stocks and shares has always included a lot of middlemen, such as the brokers and stock exchange. Creating decentralized and secure ledger – blockchain – that gives every participant a say in the validation of a transaction quickens the settlement process. It also allows for better trade accuracy. It can cut out some of the middlemen like brokers while changing the roles of other participants like those determining the share price.
Blockchain and bitcoin
Bitcoin is the world’s first and most well-known blockchain technology application. It is a decentralized network for transactions in digital currency, which can be stored and transferred in the form of cryptographic tokens.
Bitcoin uses a peer-to-peer network to broadcast information about transactions, which are added to blocks that are secured cryptographically. This forms an immutable blockchain. And since the entire blockchain is shared by all participants, it is easy to prevent double spending and check who owns which tokens at which time.
Moreover, a powerful scripting system can be used to automate transactions or make them dependent on certain pre-conditions Forex Trading and Currency Trading.
Trading has already changed significantly with the introduction of computers. In the near future, share trading will change even more drastically. Blockchain technology will not only get rid of the brokers, but the stock exchange itself could become decentralized, without a central system that is required to bring supply and demand together.
Brick and mortar locations all the around the world are already being replaced by a lot of servers. However, by using blockchain technology, the trading could move from dedicated servers of the stock exchange into a decentralized network running on countless computers around the world.
As a matter of fact, this could happen much sooner than expected. The main reason that developments are not quickening more than they might and they can is that the blockchain technology developers are much fewer in numbers and farther in between than software developers.
When asked the question, “is the blockchain technology totally safe?” one must remember that the chain itself is safe but there is still the risk of the ‘private keys’ that prove ownership of a certain asset being stolen or lost.
The private key is a variable that is utilized for digital signatures. They can be stolen in the same way as your passwords can be stolen through processes called phishing or some other malware. This enables its owners to change the ownership of assets recoded on the blockchain.