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Can anyone knowledgeable (especially those that do not like bitcoin) weigh in as to why this would be a bad idea ? I'm asking this sincerely, and not being sarcasm, as I don't know enough about either Bitcoin or stock market to make a judgement. And this seems ... different enough that I'm not sure my reaction should be "damn the future is here", or "what a bunch of craps".
This is sort of the idea I've been waiting to come out of the bitcoin universe for some time now. A decentralized stock exchange seems like an obvious killer application for bitcoin. Though, the only thing I don't like about it is counterpart. Was never a fan of them, nor open transactions... Why go to the SEC? I feel like the advantage of doing something like this would be the ability to build a trading exchange wit…
I am curious how someone can come away from the last decade of Wall Street behavior and conclude the answer to the problem is less regulation.
HSBC got caught laundering billions of drug cartel and Iranian money. Do you know how many of the bankers went to jail? Zero. They had to pay a tiny fine equal to less than a month of their revenue.
How many bankers or Wall st guys went to jail for the largest freaking financial crisis they had caused?
Regulation in finance just doesn't work. Look at who the regulators are and who is in charge of the regulators. Half of t these folks are from Goldman.
It's an exciting prospect to trade financial assets on a decentralized, trustless network. Definitely the right direction. But I'm not psyched about having to think about Counterparty's internal XCP currency, even if it isn't used for most purposes. It's an annoying barrier to have to transact in an altcoin to access certain functionality. Other implementations use pure Bitcoin only, and are much less overwrought wit…
Quite generally, Counterparty functionality that requires the use of XCP simply can't exist on platforms without their own currency. That's why it's there.
Earlier quoted context omitted.
I would imagine most of the laws and regulations are anti-fraud in nature. Outside of that, limiting the risk exposure of banks that carry FDIC insurance, or some other government backing, is in the interest in of all taxpayers. From my laymen's understanding, if you want to start a hedge fund, take some rich people's money, and gamble it all away, nothing is really stopping you. In fact people do it all the time.
>take some rich people's money And there lies the rub. So the wealthy man can take advantage of start-up investing, but the government in its infinite wisdom, forbids the middle-class man from doing the same under penalty of imprisonment for the person offering the security.
Freeeeeeeedom!
This is sort of the idea I've been waiting to come out of the bitcoin universe for some time now. A decentralized stock exchange seems like an obvious killer application for bitcoin. Though, the only thing I don't like about it is counterpart. Was never a fan of them, nor open transactions... Why go to the SEC? I feel like the advantage of doing something like this would be the ability to build a trading exchange wit…
I am curious how someone can come away from the last decade of Wall Street behavior and conclude the answer to the problem is less regulation.
I imagine there is also tremendous regulation surrounding venture capital, but I have never engaged in it much so I'm unaware of the complexities.
Too bad that, by nature of the fact the finance industry inherently has all the money, that money lets them buy the politicians to then use regulation to prevent competition and line their own pockets, while leaving them impervious to persecution when their greed fucks everything up.
I do not see how even the best intentioned regulation can work in finance. It is the proverbial tightening the fist while the actors slip through your fingers - if you try to restrict the flow of money, really big money, like drug money, then all you will find is you suffering for it.
It's an exciting prospect to trade financial assets on a decentralized, trustless network. Definitely the right direction. But I'm not psyched about having to think about Counterparty's internal XCP currency, even if it isn't used for most purposes. It's an annoying barrier to have to transact in an altcoin to access certain functionality. Other implementations use pure Bitcoin only, and are much less overwrought wit…
Earlier quoted context omitted.
I am curious how someone can come away from the last decade of Wall Street behavior and conclude the answer to the problem is less regulation.
Because there is a tremendous amount of regulation surrounding finance - look at how it is impossible to make a backer liable Kickstarter. You cannot make your own stock market, and you cannot sell ownership in a company through anything but a public stock exchange. I imagine there is also tremendous regulation surrounding venture capital, but I have never engaged in it much so I'm unaware of the complexities. Too ba…
One of the reasons that foreign companies list on US markets is that we have some of the strongest financial regulations in the world.
A simple analogy: San Francisco has a vigorous health department, and food safety scores are posted visibly in every restaurant. Does this reduce the vibrancy of the restaurant scene? No, it enhances it. Because I know when a place is likely safe to eat at, I spend more money in restaurants and I'm more willing to try new places. That increases the effectiveness of the market because newer restaurants compete on a more even footing with established ones.
Earlier quoted context omitted.
With or without regulatory capture, I can't see how the problem we face is too much oversight on Wall Street.
The counterargument is that regulation hurts small players more than large ones. Citibank can afford an army of compliance officers; most of us can't. I'm generally pro-regulation, if the details are sensible, but regulatory capture is a real problem, and it is not an unreasonable stance that the cure is sometimes worse than the disease.
Earlier quoted context omitted.
Because there is a tremendous amount of regulation surrounding finance - look at how it is impossible to make a backer liable Kickstarter. You cannot make your own stock market, and you cannot sell ownership in a company through anything but a public stock exchange. I imagine there is also tremendous regulation surrounding venture capital, but I have never engaged in it much so I'm unaware of the complexities. Too ba…
Protip: If you start by saying "I do not see how", the problem may be that you are just not seeing it. One of the reasons that foreign companies list on US markets is that we have some of the strongest financial regulations in the world. A simple analogy: San Francisco has a vigorous health department, and food safety scores are posted visibly in every restaurant. Does this reduce the vibrancy of the restaurant scene…
And the inverse of this, is that if a restaurant listed food safety scores irrespective of state mandate, you would visit those restaurants more, and if most people agreed, those restaurants would prosper and those not adopting food safety scores would suffer.
Except in that situation there was no violence of the state to compel the individual restaurants to do something - the market naturally lead to that conclusion. It is not like there is any limit on your ability to learn information about a restaurant - I would say I am surprised that there is not some popular national database of website safety ratings made up of user reviews, but considering I have never searched for such a service - I just go by general user reviews, under the assumption that an unsafe food service locale would get trashed in criticism - I guess it makes sense not to exist.
> That increases the effectiveness of the market because newer restaurants compete on a more even footing with established ones.
Or it would be a competitive advantage if the markets truly benefited from food safety scores for newer restaurants to advertise them where their entrenched competition does no such thing.
Can anyone knowledgeable (especially those that do not like bitcoin) weigh in as to why this would be a bad idea ? I'm asking this sincerely, and not being sarcasm, as I don't know enough about either Bitcoin or stock market to make a judgement. And this seems ... different enough that I'm not sure my reaction should be "damn the future is here", or "what a bunch of craps".
A real exchange has an enormous team of well-paid people whose job it is to make sure things run smoothly. They also have incredible power: they can freeze the exchange, limit price movements, undo transactions, kick people out of the market, and who knows what else. They use this power rarely, but when they do market participants are generally glad they did.
I'm sure somebody can automate 90% of the cases, or 99%, or even 99.9%. Most trading is routine. But will this work when there's a war? A financial panic? A major fraud or theft? An exploitation of a previously unsuspected bug?
The New York Stock Exchange has been working this stuff out since 1817 (or 1792 depending on how you count). And we still have things like Black Monday [1] and the 2010 Flash Crash [2].
This will be an interesting experiment, but I will not be surprised at all if it's something most investors avoid for decades because it's a) novel and therefore risky, and b) lacking a lot of the regulatory protections of a real exchange.