Trading has been a significant part of our culture which has its roots from way back from the prehistoric times. Its primary purpose is to barter goods and services.

With time and evolution, we are in an era where trade has completely changed. However, all of these is going to change with Blockchain.

Blockchain is a decentralized ledger system that works without any centralized entity. This unique approach means better trust among the traders. It also improves the costs associated with trading.

Impact of Blockchain In Every Way You Trade

It doesn’t matter if you are a stock market trader, a crypto trader, or an end-user who are trading services or items, blockchain will change the way you trade.

The most genuine effect will be seen in the stock market. Global stock market regulations are already researching how to utilize blockchain. According to the advisory committee set by SEBI, we can see better results when it comes to asset management, fundraising, or post-trade settlement.

Other big global exchanges, including NYSE, have already shown their positive intent on using blockchain to improve their platforms. Nasdaq is also keen on using blockchain ledger technology as they released Nasdaq Linq ledger technology in 2015. It will facilitate better transactional security.

Japan is also proactive when it comes to blockchain adoption. Their Japan Exchange Group is already using blockchain for its core trading infrastructure.

International trade, on the other hand, will also see a meaningful impact. We will move toward paperless trade with better proof of ownership and existence. WTO’s Emmanuelle Ganne discusses how blockchain will impact international trade. You can check out a detailed discussion about it here.

New players are also showing up in other forms of trade. Bulls vs. Bears, for example, is claiming to transform binary options trading by bringing blockchain into the mix. It is going to use blockchain for transparency and safety. The platform also ensures that skills play a crucial role while trading. They are currently doing closed beta-trials and also doing a giveaway as they are releasing their beta-trials on test-net. The final prize pool is 50,000 TRX.

Blockchain Benefits in Trading

So, what makes blockchain so beneficial in trading? Let’s try to understand below.

Blockchain is a distributed ledger system that came into existence in 2008 with the release of the bitcoin cryptocurrency. At that time, no one knew that it could one day revolutionize every sector out there.

Blockchain’s ability to define each transaction as verifiable and unique makes it a great candidate to be used in trading. It brings in immutability which ensures that no frauds or illegal activity take place while trading. To ensure decentralization works as intended, each node keeps a copy of the ledger. However, now, we have distributed ledger technologies that work fundamentally different.

The second generation of the blockchain (Ethereum, NEO) brought in smart contracts. Smart contracts bring automation to the blockchain. It is similar to legal contracts, just in codes. Any party can set the contract and the conditions at which it will be executed — which means automation in a secure and trustable way. 

Let’s take an example to understand. Trading stocks require a few steps to complete. At first, you need to place an order for sale or buy. Once done, the order is executed. The broker than creates a contract note which is followed by shares clearance and delivery. In the last step, securities are settled. This can take a lot of time and paperwork.

With blockchain, shares can be purchased in a much better way — improving efficiency and reducing paperwork. The parties only need to set up “smart contracts” properly, which means automating the process, preventing fraud, improving efficiency, and ensuring security. 

Trading’s Future With Blockchain

McKinsey & Co., in their report, Blockchain Beyond the Hype, iterated the importance of blockchain. According to their report core values of blockchain is clearly relatable to financial services, i.e., ability to transfer and verify assets or information. 

Blockchain has the ability to solve the current financial systems pain point and provide a global blockchain-based solution where there would be less requirement of intermediaries. Not only that, there would not be any geographical restrictions, improving global trade more feasible, secure, and fast.

With Nasdaq an early adopter, we are all set for the future. Nasdaq is interested in following blockchain-related indices for companies. By doing so, they can figure out the company’s potential when it comes to blockchain.

NYSE-owner Intercontinental Exchange is also one of the early adopters of blockchain has already spent more than $1.1 billion for federally regulating bitcoin market.

Role of Artificial Intelligence

Blockchain is not the only technology that is going to transform trading. Artificial Intelligence(AI) is also poised to change how you trade. In fact, it works nicely with blockchain, improving how traders take risks and automate their trading process.

Apart from the gut feeling, traders need to do technical analysis which includes doing RSI, MACD volume, or other analysis. Crypto or stock trading bots are already prevailing in the current market landscape. To learn, you can open up any of the freelancing websites such as Upwork, and check it for yourself. There is a great need for developers who can create effective bots. Moreover, these AI-bots with time are only going to do better traders.

However, they are not the final answer. AI-bots are only ad-hock that help traders work more effectively. A trader with experience will always have a higher chance of success compared to a novice using an AI-powered trading bot.

Conclusion

Blockchain is going to change trading. Its impact cannot be ignored. With time, we will see more financial institution adopt blockchain. Also, trading will be impacted by other rising technologies, including artificial intelligence. 

Do you think that blockchain is going to impact trades? Let us know below.

The post How Blockchain Changes The Way You Trade appeared first on CoinScribble.