NASDAQ is reported to have started a pilot project to use Block Chain technology which is the foundation of all Virtual Currencies including the well known “Bitcoin”, for the trading of shares in the Pre-IPO stage.
Some details are available in this article in WSJ.
This is an innovative attempt that commends appreciation. It is considered that the technology may pave the way of real time settlement of trading. Presently stock markets operate on T+2 settlement cycle where as Bitcoin transactions are often settled in 15 to 20 minutes.
The system may require two kinds of users namely the investors themselves and the other service providers who provide the settlement services. These settlement service providers would have to be provided a “fee” for their services which will have to be boarne by the investors or the underlying companies.
Each time a transaction is reported, it is sent to the central system and the settlement service providers pick up the transactions and try to create a link to the existing block chain based on the rules set by the algorithm. The first person to crack the solution would be rewarded with the fee and the solution adds the transaction to the existing block chain. Then the next transaction is taken up for addition. The additions can be on a single transaction or a set of transactions at a time and perhaps the fee may have to be determined on the basis of the number of transactions added.
While the existing stock brokers can be the logical settlement providers, there is scope for the public at large also providing similar services so that the settlement times shrink and tend towards real time settlement.
Despite the bad reputation which Bitcoin gathered because of its use by Cyber Criminals, Naavi has been one of those who has been indicating that a “Virtual Currency” or a “Crypto Currency” like Bit Coin is only a technology innovation and has a huge potential for multifarious use. RBI has created a perception that “Bitcoin” is not acceptable and is illegal per-se and hence the Crypto Currency technology has not taken off in India.
We urge RBI to reconsider its decision and for SEBI to also start thinking on whether a NASDAQ initiative can be tested even in India.
Naavi
I have personally written emails to RBI and Modi Government since last 6 months.. I did not get any reply from them. But, I did not stop my research on crypto currencies and have successfully created Proof of Work (POW) for an identified digital currency based on bitcoin protocol.
I have been testing it through my friends in US and UK. They have also given a green signal for it to launch.
I expect Indian government to come forward after we make a formal press release this week.
If they want to contact me I would like to share my details on this portal: nilamdoc@gmail.com and +91 75972 19319.
I am a lead developer in GreenCoinX and also President of GreenCoinX Inc.
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Unfortunately even professionals in RBI are unable to understand between Bitcoin and Bitcoin technology. We need people in administration to be intelligent to understand the enormous potential of crypto currencies and the block chain technology. Perhaps Govt will wake up only after every other country is several steps ahead.We are comfortable as followers rather than as leaders.
I would like to take up an initiative to teach technology to the Government. Do they want to learn, under the new leadership / dictatorship?
I am not against Mr. Modi, but the fear of change coming from employee to employer is no there with this government. The leaders want India to move forward. But they only have to follow the instructions from the top.
I hope the message will reach Mr Modi and he responds. RBI has announced that it will soon set up an IT subsidiary. It can also take up the issue. Let’s wait and see if the intelligence picks up the name of Modi from this site and puts it up to him.