How the Blockchain NASDAQ project will change up share trading

By Daniel Zo Bitcoin, Blockchain, NASDAQ

The idea of using Bitcoin alongside with the Blockchain technology that backs it to trade shares has been considered before, but it is now being put into an actual project, as reports indicate. With this in mind, it seems like the Nasdaq OMX Group has named Chain as its partner for the pilot project that was announced a couple of months back, and which would provide the needed technology for trading of shares in all types of private companies.

Understanding how this is supposed to work can turn out to be a bit difficult, but we’ll try to explain it as well as possible. To kick things off, Chain is a company that provides infrastructure to financial institutions which want to use the Blockchain for all sorts of transactions, as it allows users to digitally transfer money along with digital assets securely, directly and nearly instantly, which is great news from all the points of view.

Now, think about using the Blockchain technology as a way of transferring shares from a company to an employee. To do so, a company which would want to use the Blockchain to issue shares to an employee would have to send them a nominal amount of bitcoin (the amount isn’t relevant), onto which they would code metadata which would then state how many shares of the company are being transferred in the transaction. This would then allow for each transaction to take place securely, but also be recorded on a public ledger, which means that proof of the transaction would be stored on computers from all around the world, which are continuously being synced to the ledger and vice-versa. With this in mind, each ledger will agree with the transaction, the parties that have been involved, and whether it has been carried out successfully or not.

The process will also have an important role in making selling these shares much easier from all the points of view. If an employee decides to sell some of his shares, then a liquidity company would have to be used to hold those shares, which will then be put on the market, where investors could think about purchasing them.

If the pilot project ends up being successful, then the stock market will strongly change in the next couple of years, as the trading of shares and of stocks will be further digitalized and anyone will have access to public information about the latest transactions, which is data that could be kept in mind to make wiser investing decisions in the future.

Based on everything that has been outlined so far, what do you personally think about this project started by NASDAQ in partnership with a few companies?