New Kids on the Blockchain: How Bitcoin's Technology Could Reinvent the Stock Market
Bitcoin is the first and most successful digital currency in the world. It is polarized in the news almost daily, with either glowing reviews of the many benefits of an alternative and international currency, or doomsday predictions of anarchy, deflation, and another tulip bubble.This Article focuses on the truly innovative aspect of Bitcoin and that which has gone mostly unnoticed since its inception the technological platform used to transfer Bitcoin from one party to another. This technology is called the Blockchain. The Blockchain eschews a bank or other middleman and allows parties to transfer funds directly to one another, using a peer to peer system. This disruptive technology has done for money transfers what email did for sending mail by removing the need for a trusted third party just as email removed the need for using the post office to send mail.If this technology can be used for peer to peer money transfers, why not extend the technology to accomplish other forms of transfers? Imagine selling a house or buying a car peer to peer. What about using the Blockchain technology to buy and sell stocks? Stocks exchanged completely peer to peer could resolve many of the issues facing the stock market today, including high frequency trading and short sales. This article focuses on developing a peer to peer stock market system, the legal implications of such a system, and how this system will fit in with current legislation and regulation.