Bitcoin has made its debut on Wall Street and the conversation is already ongoing about Bitcoin’s place and role in the global economic landscape. Wall Street is still struggling to come to terms with the fact that Bitcoin has outperformed practically every class of asset in the market right now. Economists are also trying to understand Bitcoin’s position as an alternative to fiat currencies in the global economic landscape.
However, Bitcoin is not the enemy, Wall Street should be more concerned about how the underlying Blockchain technology that drives Bitcoin can change the rules of the game on Wall Street. Bitcoin is okay with being a form of money – the proponents of Bitcoin just want the government to acknowledge the fact that fiat currencies are fundamentally flawed.
Blockchain on the other hand has the potential to push drastic changes on how Wall Street operates. A particularly interesting aspect of Blockchain that could disrupt Wall Street is the concept of Smart Contracts. This article examines the offerings that want to leverage Blockchain to upend the existing order on Wall Street.
Meet Confideal and Its Simplified ‘Smart Contracts’
Confideal is a blockchain-based startup that believes that business relationships can be forged easily, speedily, and across borders without unnecessary complexities. The Confideal platform boasts a visual smart contract builder that anyone can utilize to create, manage, and enforce smart contracts. Smart Contracts are simply a set of agreements that have been encoded in digital form. The general idea behind smart contracts is that encoding self-executing agreements could reduce the risk of errors, manipulations, and non-performance in contractual agreements.
On Wall Street, smart contracts can change the landscape for trading/investing in derivatives such as options, ETFs, and mutual fund, and debt instruments. Call options to buy a predefined number of stocks at a predefined price can be executed without the facilitating services of a broker. Publicly traded stocks can build smart contracts on blockchain to send dividends, stock splits, and share buybacks directly to investors without the input of an intermediating clearing house.
In fact, companies planning on going public may want to rethink the whole idea of Initial Public Offerings (IPOs) by using Smart Contracts. Using smart contracts for an IPO might eliminate the need for the intermediary of banks because the decentralized blockchain ledger ensures the immutability of subscriber data.
Confideal is hoping to propel Smart Contracts to the limelight on Wall Street with a visual smart contract editor. Confideal’s smart contract editor makes it easy for anyone to create smart contracts without a prior knowledge of legalese or coding skills.
Confideal is still in development but the firm is opening up an opportunity to accredited investors to be part of the next big thing in Blockchain technology and on Wall Street. The Confideal ICO is set to begin in the next couple of weeks. The Confideal ICO will give investors a chance to get ringside seats to watch the evolution of Smart contracts unfold.
Meet Symbiont and Its Smart Securities
Symbiont is blockchain-based solution designed to provide a bridge between the decentralized nature of Blockchain and Wall Street. Symbiont is working towards becoming the go-to platform for the issuance and trading of smart securities. Today’s financial markets such as Wall Street are prone to a great deal of errors because of the operational activities are still done manually. Running complex financial trading operations manually is prone to errors because of human are the weak links in the chain.
Symbiont simply makes it possible to model complex financial instruments in a simplified programming language. Symbiont also goes a step further to provide a simplified and easy-to-use programming language that could be used to digitalize securities on the distributed ledger.
Smart securities play an important role in making it easy to share market data across the distributed ledger in an encrypted format. Smart Securities also help investors to save costs by automating the manual processes that precipitates high costs in traditional financial transactions. Another great tool about smart securities is that you can guarantee that the full life cycle of financial instruments are verifiable. Smart Securities also support the electronic allocation, issuance, and trading of financial institutions without necessarily being at the mercy of a technology vendor.
There’s More to Bitcoin Than Speculation
Many traditional investors on Wall Street dismiss Bitcoin too easily because they consider it a speculative fad that will soon pass away. The latent value of Bitcoin lies in the fact that it is a censorship-resistant asset, which could evolve to become a better alternative to fiat currencies. Analysts at Bernstein observe that “fiat money is still the final form of settlement – governments still collect taxes in fiat money and salaries are still paid in fiat money.”
However, the fundamental limitations of fiat currencies add an unnecessary layer of complexity to the already-complex nature of Wall Street. To invest or trade in securities on Wall Street, you’ll need to put your money in a bank and direct your bank to send the money to your asset manager or stock broker. When you eventually sell your assets, you’ll need to wait for the company to send your money to your broker, who in turn sends the money to your bank.
With Bitcoin investors don’t have to go through the long circuitous route of entering and exit positions in their preferred assets. Analysts at Bernstein notes that “Bitcoin could be seen as virtual ‘bearer cash’ economy supported by a decentralized ‘trustless’ network – a new crypto economy with its own protocol or policy.” The research firm also notes that. “The faith of its citizens – software developers, miners, investors, early individual and sovereign state adopters [–] would drive the value of that network.”