Published On: Tue, May 12th, 2015

Nasdaq adopts Bitcoin technology

NASDAQ_stock_market_display-Wikimedia-Commons

 
Nasdaq, the second largest exchange in the world, is set to adopt the technology that runs the digital currency bitcoin to track its market transactions in the near future. Nasdaq is reportedly the first major financial market to use the blockchain technology that facilitates bitcoin operations.
 
Nasdaq intends to use the blockchain-based applications across the board on its various market platforms. Initially it would be introduced in Nasdaq’s Private Market platform used for private capital markets trading.
 
Bitcoin uses cryptography to secure and manage transactions. Every bitcoin transaction from one party to another requires digital encryption and additionally has to be validated by the network. The finished transitions are then registered on a digital logbook called blockchain.
 
All transactions on bitcoin are validated by algorithms running on the decentralised servers — mostly operating on voluntary basis. The system removes the mediatory function of banks or other financial institutions.
 
David Johnston, chairman of Factom Foundation, a start-up trying to expand blockchain application beyond bitcoin, told Financial Times that, the new technology introduces “auditing based on mathematics” and not on the conventional practice of trusting the third party.
 
In recent months, many big players on Wall Street have shown growing interest in technology behind the bitcoin and emerging trend of ‘bitcoin economy’, including New York Stock Exchange and Goldman Sachs.
Nasdaq’s move to adopt blockchain is by no means an endorsement of the virtual currency model operated by bitcoin. It is simply trying to implement the underlying technology that can run secure transactions on multiple platforms across the world and still be centrally verifiable.
 

About the Author

Wordpress site Developed by Fixing WordPress Problems