Nasdaq partners with Bitcoin firm Chain

In order to facilitate stock trading for company employees who hold stocks before the company's IPO (initial public offering, also known as "listing"), Nasdaq recently announced a partnership with Bitcoin technology company Chain to test the use of Bitcoin technology to assist transactions on its own Private Market. The first company to participate in the test is Chain itself.

In the past, private stock transactions before a company's IPO were mostly very cumbersome, requiring a lot of manpower and material resources to generate, save and exchange paper materials such as transaction contracts, which was time-consuming, labor-intensive and extremely inefficient.

The cooperation between Nasdaq and Chain uses Chain's very popular Bitcoin trading tool "blockchain", which is quite original.

The transaction process is as follows:

1. When a pre-IPO company distributes equity to its employees, it also distributes extremely low-denomination bitcoins, such as one hundred millionth of a bitcoin, to a specific account of the employee;

2. When using blockchain to settle bitcoins, the relevant information of legally holding shares can be directly written into the metadata of bitcoins (a very long, encrypted field consisting of numbers and letters). In other words, anyone who holds this bitcoin will be regarded as the legal holder of the shares.

3. When employees need to trade their equity in the secondary market, they can directly use the previous account to trade the Bitcoin they hold, and the equity information will be passed to the new holder along with the Bitcoin metadata.

Chain's Bitcoin transaction settlement system is characterized by security and instantaneity, which is also the weakness of the traditional paper transaction system.

If this technology is used more widely in the future, I believe that the complex and cumbersome paper trading system will gradually be replaced by a more efficient distributed computing system, and the transaction efficiency of the financial market will be further improved.