Digital Stocks Using Blockchain Technology the Possible Future of Stocks?

Abstract

Bitcoin is the first and most successful digital currency in the world. It trends in the news almost daily, with glowing reviews of the many benefits of an alternative and international currency. This paper explains the innovative aspect of 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 intermediary 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. This technology mainly used for peer-to-peer money transfers, can also be extended to accomplish other forms of transfers. Blockchain technology can be used to buy and sell stocks. Real world stocks can be tokenized into digital stocks which can be easily transferred using peer-to-peer. These digital stocks act similar to digital currency whose price is real time and fluctuates. Stocks exchanged completely peer-to-peer could resolve many of the issues facing the stock market today, including high frequency trading and short sales.

Keywords: Blockchain, Digital Stocks, Stock Exchange, Tokenization, Digital Currency, Cryptocurrencies