2. Blockchain saves significant transaction cost.

A case study into conventional security trading.

Currently the clearing and settlement of securities transactions involve a complex network of brokers, custodian banks, stock transfer agents, regulators, and depositories.

A single transfer can require a dozen intermediary transactions, and typically takes three days. Some 20% generate errors, which must be corrected by hand.

With a blockchain, two trading parties could read and write to a common, trusted, and error-free database. The transaction could be written in legal language as well as in computer code, so that the data exchange itself is the settlement.

Brokers could potential trade on a larger blockchain to disintermediate the custodians, thereby further reducing total transaction costs.

Institutions issuing securities, such as corporations and municipalities, could issue them directly onto the blockchain, thereby disintermediating their stock transfer agents.

Benefiting from the nature of a decentralized ledger, the technology being implemented in securities transactions can cut risk and produce significant savings of costs and capital.

 

Source: Thinking Outside the Block, BCG; Cover photo by Tax Credits, CC License

3/3. What is ICO?

Underneath the turbulent waters are seeds for a massive transformation of the real world. Prospectively, ICO can be established as an alternative to classic capital raising means.