Goldman Sachs' SETLcoin

First they ignore you, then they laugh at you, then they fight you…

In my view this falls in the “fight” category, though they are still on the defensive. That may change once they have set up their gated blockchain ecosystem. They’ll probably start to lobby for suffocating regulation against all free crypto-currencies.

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I also don’t see a need for a system like that in stocks and bonds. I bought my first stocks in 2006, and transactions are already instant, became cheaper and cheaper. Really no need to register all these things on a blockchain. Same for hiring a hotel room. That’s working for centuries without a blockchain. I never had the problem that my key didn’t matched my door or a double booking or whatever. One should never try to solve a problem that’s not there. The blockchain is a becoming a hype right now. I wouldn’t be surprised if a believer of the thing will come up with an App to flush the toilet using a blockchain.

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This is precisely what I wanted to say in this thread.

Me neither surprise me that appeared someone trying to fit within maidsafe private blockchain even if I hurry a bank.

Although I predict a failure in time, they are trying to join a core with two totally opposite concepts, descentralismo against centralism, which prodrucira an abortion, want to take advantage of the cost savings to make blockchain centralist and not anonymous.

It’s a worry, for example for something like SafeX, if they get any kind of patent in this area because they have so much power.

Even if MaidSafe parents offered protection, enforcing them would be near impossible against their wealth.

The best defence I expect will be open source plus decentralization - nobody to sue - combined with decentralised anonymous development on SAFEnetwork itself (a SAFEgit etc).

Here’s a link to the earlier article which gives a little more about the patent application:

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  • Wow…And how would you have bought MAID if such mechanism of blockchain-based assets didn’t exist?
  • Another thing, related to “real” life assets, is that you probably don’t know how things work (back-end systems of your brokerage) so you probably don’t really know whether you need this.

But okay, if you say you don’t need it, then you don’t.
I do want that kind of stuff, but perhaps not issued by Goldman Sachs, but by some other issuer.

I’m talking about my stocks and bonds. Not about cryptocoins and/or assets. That’s apples and pears. I said I don’t need a blockchain for stocks and bonds.

I do know how things work. Nobody really owns stock. What you have is a settlement. In other words, an IOU which says you have the right to own the real thing. The paperwork is done at the DTCC (for US stocks).

Overstocks CEO Patrick Byrne is doing a lot of presentations about this subject and he’s also building blockchain technology for stocks and bonds.

So you’re comparing apples and pears and assumed I didn’t do my homework on this subject. Well. you’re wrong. I do know how these things work and no, I don’t want a blockhain for stocks and bonds. The technology right now is doing great.

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Funny, I never realised this difference between English (comparing apples and oranges) and Dutch (comparing apples and pears) until now. Probably because ‘sinaasappel’ (orange in Dutch) has the word apple in it.

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For us, but I wonder what’s the barrier for a start-up in less developed countries to issue stocks? Honest question, I know little of stocks and bonds markets.

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There’s a lot of regulation before a company can do an IPO. It differs in different countries. I buy most of my stocks in the US. So when these companies provide numbers, you can be quite sure that they’re correct and have good accounting etc. A lot of companies that go public aren’t even start-ups. Some of them are around for years and years. Most of the time you go public with your company after you succeeded as a start-up. Think of Twitter, Facebook, Alibaba, Netflix etc. So it’s a combination of good regulation for both the stock markets, the accounting, the brokers etc. Over the last 10 years or so we’ve seen new stockmarkets come around as well. Next to NASDAQ and NYSE we now have IEX, BATS, and a number of darkpools as well. They all compete on price. So 10 years ago I paid 10 euro for a transaction to buy some stocks, today it’s just 59 cents. The spreads between bid- and ask has become smaller as well. So for the common people, the markets are doing great. There are problems of course (high frequency traders who did front-running, Volkswagen, etc.) But the technology is doing great. And it’s extremely fast. All my transactions are done under a second. Unless I do limit-orders in the hope to buy cheaper.

You will find a lot of foreign companies on the US stockmarket as well. Even from the less developed countries. I did some work for “SWARM” as well. They’re trying to create DCO’s on blockchain technologies where coins act as stocks. But the regulation in the US is so strict that it will take very long to see if they can succeed in doing that. I think the dream of “stocks” on a blockchain where the poor kid in India can buy some stocks as well to earn dividend is far away. Chances are bigger that he grows a bit older and buys some stocks on a regular market if he have some money and wants to.

When Goldman is using blockchain technology it’s probably not because they want you to buy Apple stock with some cryptocoin. I think it’s more like a different approach to reach the same goal as they already did with their regular databases. Store transactions.

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Then you do know that “your” shares (and whatever else you might have) at your brokerage are not actually owned by you, but by your brokerage who holds them on your behalf.
And that they’re lent to parties that can become insolvent - or are actually (but not “legally”) insolvent - any time.

:joy: Okay.

And just to confuse you even more “apples and pears” means something else entirely in Cockney (London) rhyming slang. Off topic alert! :blush:

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I think there are uses in this area - @Seneca highlights one, and @janitor points out the weakness in another. There’s a lot of centralised trust and associated compliance and regulation in the current system, which all contributes to cost and inefficiency.

Connecting these areas together with trustless decentralised ledgers, proof of existence/ownership/funds etc, and instant transfer and settlement - can reduce both the risks and costs, and also create new opportunities to fund and invest.

http://cyber.fund just chose this (ad hoc blockchain) route rather than going public because of the costs. In this case it makes the investment more risky in some ways (no compliance or regulation) but easier to assess in others - it’s much more “face to face” and easier to judge the people involved, which is one of the most important areas.

For trading listed stocks, it’s fair to say it works - on the whole - but there are still many ways that can be improved IMO.

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Yeah, that’s correct. Like I said in my reply before:

There used to be a time where all trades where delayed by hours/days because tons of paperwork where going from one place to the other on Wall street. They fixed that by using settlements.

My broker gives me the option to opt out from that. And even while I was with my old broker in 2007/2008 when we saw a meltdown of almost all stocks I didn’t loose any due to this. I don’t know of any other person who lost money because others where short-selling their stocks as well. Seems like the regulation is doing fine. That’s doesn’t mean I’m a fan of highly leveraged banks etc. I’m talking from my own perspective and about the technology. Same goes for ETF’s. The companies that provide them can see big problems when there’s another crash and a lot of people sell their ETF’s so that the issuer of the ETF has to sell the actual stocks. But that’s the system, not the technology.

Let me know where you see problems. I really like to learn.

EDIT: Flashboys is a great book about a group of people that tried to create a fair stockmarket (IEX). They’re still a darkpool but they will become a regular exchange soon.

IEX’s main innovation is a 38-mile coil of optical fiber placed in front of its trading engine, which adds a round-trip delay of 0.0007 seconds and is believed to limit traders’ ability to respond on the dark pool ahead of IEX’s own pricing algorithms.[2] The dark pool’s market session runs from 9:30 am to 4:00 pm Eastern Time.

Settling stocks still takes an incredible 3 business days. If you have a non-marginable account, you have to wait that 3 days between sale and requesting a check. If you have a marginable account, you can probably get a check as a courtesy (if you have other assets in the account), much like cashing a 3rd party check at your bank.

When you buy 100 shares of AAPL, how do you know your brokerage company didn’t just take your money and give you a statement that you were filled? Answer: Audits. Each company has to pay a TON of money each year on audits. If a coin can make that information public, it would save time and money.

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How do you opt out? Is that for US stocks?
What do you get in return if you opt out (or, do you pay more)?
I’m curious why people opt in, if they don’t get anything except more risk, but no profit.

Even if you do opt out, does that protect you if the broker goes down? Don’t know if this is a US or EU broker; that probably matters.

This stuff should be open sourced or FOSS.

Watch out the masters of the crap verse are presiding. I recently went through James Rickard’s book “The Death of Money” and he kept making the point that we in the US are unprepared for the financial warfare that is going to be waged on us by China and others. After lurking in this forum for a while and going through Nomi Klein’s “All the President’s Bankers” I’ve come to the opposite viewpoint. Its never been about money, its always been about banking (or the slight of hand stretching of money with the print press or fractionation or some other mechanism) and banking going all the way back has always been financial warfare waged on the people. The point is to lower your income and get you in debt and bills so they can get you under control and twist you. Its always been about using economics to acquire all available power.

Early victims of this game weren’t so enamored of private credit issuance and made interest illegal as it was in both early Judaism and Islam still today. Make a loan and make it for free. Make a loan and make it with a funny interest rate and it warfare. Their might be a tiny middle ground but it would be loans on the most generous terms where the lender was absorbing most of the risk. Anyone taking a lone is betting they can predict the future and risking at least two people’s money.

It’s a broker here in Europe (I used to trade through Interactive Brokers who also lent your stocks to others who want to go short). When I opt out they charge me a little fee for getting me the dividends and for real-time charts. But the risk is very low IMO. If the counterparty can’t get back the stocks, the broker is responsible to pay for it. Only if they can’t pay back as well I’m screwed. But they won’t lent a big percentage of my stocks so again, not that much risk IMO. Most lending is done to marketmakers. Almost all brokers lent out your stocks. Pensionfunds do the same thing as well. It’s quite a common thing. For Microsoft, only 0,70% of their stocks are shorted. For Tesla it’s 26,81% (I know that’s @janitor :wink: )

That’s what blockchains could change, that people are more aware of what happens with their stocks etc. But a public ledger where everyone can see how short JP Morgan is on a certain stock?? I don’t think that will ever happen. These companies like to be under the radar.

Well it’s a matter of perspective, isn’t it. The risk is low, but some people have 90% of their savings in bonds (either they bought ETFs or their pension funds own bonds with more or less the same brokers), so they probably wouldn’t mind to put at least part of them in something that’s tied to their actual account.

Not everyone needs crypto-represented assets, but I would like to own 10-20% of my shares in that form, just to balance it out a bit.

Also, in the US settlement is still 3 days and in some faster places 1 day (for stocks), so if I could get 60 minutes, I’d like that. Again, maybe just for a portion of my currently invested funds, but still.

Yes, that’s why they’re doing their own “dark crypto pool” thing.

Many individuals wouldn’t care since you don’t know who is behind a bitcoin (or other coin) address.
I own some silver (through blockchain tokens) and I can see my ownership on the Web, but not many people know that I own that address (the asset issuer does, of course, because of KYC/AML I had to ID myself).

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I don’t see any benefit to a brokerage account holder for his assets to be loaned out to other parties. Not only does it expose him to risk without reward, but it also enables the entities borrowing the assets to engage in market manipulation against the interests of retail investors. It also still means trusting the brokerage to actually be solvent and have the means to back the assets. The global financial and banking systems are rife with cronyism with insiders skimming immense profits at the expense of individual investors, depositors, and anyone engaged in electronic transactions.

The whole idea of decentralized blockchain technology is to have a trustless system without the need for middlemen. I would much rather own assets on a decentralized ledger as digital bearer instruments which can be immediately traded on decentralized, trustless exchanges where frontrunning and high frequency trading is essentially impossible since everyone has equal access to the data and ability to place trades on the exchange.

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I am only vaguely aware of what bitcoin is and its potential, although I remember the first time I heard the term it raised the hair on the back of my neck. But I just read something on this forum from someone who seemed up on it and they were talking as if bitcoin has come apart and crashed and burned or is the process over Goldman and R3 or similar stuff.

I keep thinking back to that creepy video with Craig Wright where he had that purple neuro morphic sigil thing next to his head from a screen behind him for most of the video. Was a Franken box at least part creator or efficient means in bitcoin? What he was trying to say? When all these policy types are getting scared over Bostrom’s book part of the fear is the level of ugliness involved. Its off the scale. Bostrom put the damn “4th kind” owl on the front of his book. That movie was pure psychic abuse.