Stock Trading

The Complete Blockchain Professional Course Blockchain Use Cases in Finance
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Transcript

Now let's talk about stock trading in the finance sector. The current functioning of stock exchanges involves complex procedures that can take a lot of time and money. Moreover, these complications are prone to risks. How can we solve this problem, we can initiate a blockchain based private trading platform that would allow private companies to represent their shares digitally. This will create a complete record of individual securities and transactions for private investors over the blockchain. Moreover, smart contracts can also be established between the stock movements, where users are sending stocks to each other over specific conditions.

Settlement of securities can also be performed by using digital tokens the benefits of using blockchain for such a problem would be that it provides traceability and stroke provenance for the complete system. It will also eliminate the third parties involved, who charge a heavy amount of cost for the whole process. The settlement of the stocks will be much faster compared to the traditional way of performing the same. Let's visualize the stock trading solution with the help of a diagram. Let's suppose Jason wants to send a stock to mark the transaction of the stock is represented as a block over the blockchain. This block is broadcasted to every party on the network where those parties approve and validate the transaction details regarding the stock exchange between Jason and mark.

Once the block has been verified and confirmed block is added to the chain, and it provides a permanent and transparent record of transactions. Finally, the stock moves from Jason's account to Mark's account. This complete process will be much more cost effective and transparent now, because Jason and Mark would be able to see how the transaction has occurred. Moreover, once the stock has been sent, an immutable record of the transaction is created over the blockchain. Nobody can reverse the stock exchange between Jason and mark.

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