Topic: Can I buy stock with colored coins? (Read 1671 times)

Quote from: ACCTseller on May 14, 2015, 09:00:13 PM

Quote from: Alley on April 17, 2015, 06:26:32 PM

Nxt has implemented colored coins what is called the Nxt Monetary System

When you are using the NXT asset exchange, you are technically buying a debt obligation of the issuer whose value is backed by the underlying asset. If the issuer were to decide not to honor their obligations then there would be little that could be done. Granted some of the issuers do take some precautions to prevent one person from controlling large amounts of funds (multisig for example), but this is not 100% foolproof.

Generally speaking you can get a number of free trades with a brokerage if you have sufficient assets held at the bank and there are companies like sharebuilder that allow you to buy stock for only $4 in commissions

This is true. There have been a few example of failed assets on the NXT AE (e.g. ach and ReserveShare) where the asset issuers either suddenly disappeared or failed to issue dividends and then disappeared sometime later.

There have been steps taken to mitigate the risk of scammy assets on the NXT AE, however. For example, NXTInspect is one such service which aims to audit assets on the AE by looking at their business plans. Unfortunately, it doesn't completely eliminate the risk of scam assets.

Even if business plans are sound, there is nothing to stop someone from simply planning and executing a Lon con when dealing with issuing assets.

The concept of using some kind of asset exchange is that you are trusting a third party with your assets which is not what Bitcoin is about.

Yes, that's why I said that it doesn't completely eliminate the risk of scam assets. In fact, eliminating that risk is impossible - reduced, sure, but not eliminated entirely. The same also goes for regulated stock markets in the real world too.

For any type of asset exchange, there must always be trust between the asset issuer and the buyer. Colored coins representing shares in a company are only as legitimate as the person who is issuing it.

By allowing everyone to easily create tradeable digital tokens representing any kind of asset, colored coins make trading accessible to everyone. Bitcoin was designed to remove the middleman (i.e. the bank) in financial transactions. Colored coins enable the ability to securely trade and verify assets issued from a trusted issuer without the middleman (i.e. the broker). The possibility that the asset issuer might choose to scam is something that is inherent to the trading markets and is not a problem that colored coins were designed to solve.

I think colored coins are just replacing one middle man with another. The status quo is that people trust their money with a broker. Your money is protected by the fact that the broker is highly regulated, the fact that the broker must keep customer funds segregated from company funds as well as SPIC insurance. An issuer of a colored coin on the other hand only has his reputation, which is really probably not that valuable when compared to a broker. Plus you have the fact that the identities of an issuer of a colored coin are likely to be unknown increase the risks that they will eventually run away with customer money.

With bitcoin, you control your money when you control your private keys. With colored coins, the issuer is going to control your money

The 'middle man' changes from a centralized broker, regulated by goverment to a decentralized blockchain regulated by the algorithm. I.e. an emitionless entity that can can't be influenced or tempted to cheat. Sounds like an improvement to me.

The broker doesn't hold your money when you invest in a startup through them, it goes to the start up and you both pay fees to the broker. The broker can hold your shares for you but you get no protection from the issuer running away. The problem still exists and isn't what asset exchanges solve, asset exchanges replace the brokers.

Troonetpt

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Is this currently implemented anywhere? So I can buy stock attached to a colored coin instead of spending $10 a trade with ameritrade?

Sure, it is the purpose to create color coins to doing such jobs. and color coin can do more than buy stocks.

ACCTseller

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Activity: 532

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no longer selling accounts

Quote from: Lorenzo on May 17, 2015, 08:40:07 PM

Quote from: ACCTseller on May 15, 2015, 12:34:26 PM

Quote from: ACCTseller on May 14, 2015, 09:00:13 PM

Quote from: ACCTseller on May 15, 2015, 12:34:26 PM

Nxt has implemented colored coins what is called the Nxt Monetary System

When you are using the NXT asset exchange, you are technically buying a debt obligation of the issuer whose value is backed by the underlying asset. If the issuer were to decide not to honor their obligations then there would be little that could be done. Granted some of the issuers do take some precautions to prevent one person from controlling large amounts of funds (multisig for example), but this is not 100% foolproof.

Generally speaking you can get a number of free trades with a brokerage if you have sufficient assets held at the bank and there are companies like sharebuilder that allow you to buy stock for only $4 in commissions

This is true. There have been a few example of failed assets on the NXT AE (e.g. ach and ReserveShare) where the asset issuers either suddenly disappeared or failed to issue dividends and then disappeared sometime later.

There have been steps taken to mitigate the risk of scammy assets on the NXT AE, however. For example, NXTInspect is one such service which aims to audit assets on the AE by looking at their business plans. Unfortunately, it doesn't completely eliminate the risk of scam assets.

Even if business plans are sound, there is nothing to stop someone from simply planning and executing a Lon con when dealing with issuing assets.

The concept of using some kind of asset exchange is that you are trusting a third party with your assets which is not what Bitcoin is about.

Yes, that's why I said that it doesn't completely eliminate the risk of scam assets. In fact, eliminating that risk is impossible - reduced, sure, but not eliminated entirely. The same also goes for regulated stock markets in the real world too.

For any type of asset exchange, there must always be trust between the asset issuer and the buyer. Colored coins representing shares in a company are only as legitimate as the person who is issuing it.

By allowing everyone to easily create tradeable digital tokens representing any kind of asset, colored coins make trading accessible to everyone. Bitcoin was designed to remove the middleman (i.e. the bank) in financial transactions. Colored coins enable the ability to securely trade and verify assets issued from a trusted issuer without the middleman (i.e. the broker). The possibility that the asset issuer might choose to scam is something that is inherent to the trading markets and is not a problem that colored coins were designed to solve.

I think colored coins are just replacing one middle man with another. The status quo is that people trust their money with a broker. Your money is protected by the fact that the broker is highly regulated, the fact that the broker must keep customer funds segregated from company funds as well as SPIC insurance. An issuer of a colored coin on the other hand only has his reputation, which is really probably not that valuable when compared to a broker. Plus you have the fact that the identities of an issuer of a colored coin are likely to be unknown increase the risks that they will eventually run away with customer money.

With bitcoin, you control your money when you control your private keys. With colored coins, the issuer is going to control your money

Lorenzo

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Activity: 406

Merit: 250

Quote from: ACCTseller on May 14, 2015, 09:00:13 PM

Quote from: Daedelus on May 15, 2015, 03:33:10 PM

Nxt has implemented colored coins what is called the Nxt Monetary System

When you are using the NXT asset exchange, you are technically buying a debt obligation of the issuer whose value is backed by the underlying asset. If the issuer were to decide not to honor their obligations then there would be little that could be done. Granted some of the issuers do take some precautions to prevent one person from controlling large amounts of funds (multisig for example), but this is not 100% foolproof.

Generally speaking you can get a number of free trades with a brokerage if you have sufficient assets held at the bank and there are companies like sharebuilder that allow you to buy stock for only $4 in commissions

This is true. There have been a few example of failed assets on the NXT AE (e.g. ach and ReserveShare) where the asset issuers either suddenly disappeared or failed to issue dividends and then disappeared sometime later.

There have been steps taken to mitigate the risk of scammy assets on the NXT AE, however. For example, NXTInspect is one such service which aims to audit assets on the AE by looking at their business plans. Unfortunately, it doesn't completely eliminate the risk of scam assets.

Even if business plans are sound, there is nothing to stop someone from simply planning and executing a Lon con when dealing with issuing assets.

The concept of using some kind of asset exchange is that you are trusting a third party with your assets which is not what Bitcoin is about.

Yes, that's why I said that it doesn't completely eliminate the risk of scam assets. In fact, eliminating that risk is impossible - reduced, sure, but not eliminated entirely. The same also goes for regulated stock markets in the real world too.

For any type of asset exchange, there must always be trust between the asset issuer and the buyer. Colored coins representing shares in a company are only as legitimate as the person who is issuing it.

By allowing everyone to easily create tradeable digital tokens representing any kind of asset, colored coins make trading accessible to everyone. Bitcoin was designed to remove the middleman (i.e. the bank) in financial transactions. Colored coins enable the ability to securely trade and verify assets issued from a trusted issuer without the middleman (i.e. the broker). The possibility that the asset issuer might choose to scam is something that is inherent to the trading markets and is not a problem that colored coins were designed to solve.

Wha?

The assets are as safe in the blockchain as the coins are, they don't disappear if the issuer does. They just become worthless.

You're talking about a separate issue. You are talking about trusting the asset issuer to do as they say they will when running their business. This has to be faced for all asset exchanges as the guy selling shares in his bar and selling drinks to real people using fiat can't be decentralized (at least not yet). He has to be trusted if you want to get invloved. Don't trust him, don't buy his assets. It is still the internet so 'Buyer beware' still applies.

There will always be people who will buy magic beans or answer emails saying they've won the nigerian lottery and they will continue to get burned. That isn't what asset exchanges fix. They make it so that for legitimate people can raise and move value around cheaply and trustlessly with barely any effort or admin. Not to prevent illegitimate people lying and cheating. Don't confuse the two.

Well said.

Daedelus

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Activity: 574

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Wha?

The assets are as safe in the blockchain as the coins are, they don't disappear if the issuer does. They just become worthless.

You're talking about a separate issue. You are talking about trusting the asset issuer to do as they say they will when running their business. This has to be faced for all asset exchanges as the guy selling shares in his bar and selling drinks to real people using fiat can't be decentralized (at least not yet). He has to be trusted if you want to get invloved. Don't trust him, don't buy his assets. It is still the internet so 'Buyer beware' still applies.

There will always be people who will buy magic beans or answer emails saying they've won the nigerian lottery and they will continue to get burned. That isn't what asset exchanges fix. They make it so that for legitimate people can raise and move value around cheaply and trustlessly with barely any effort or admin. Not to prevent illegitimate people lying and cheating. Don't confuse the two.

ACCTseller

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Activity: 532

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no longer selling accounts

Quote from: ACCTseller on May 14, 2015, 09:00:13 PM

Quote from: Miracal on May 15, 2015, 06:33:32 AM

Nxt has implemented colored coins what is called the Nxt Monetary System

When you are using the NXT asset exchange, you are technically buying a debt obligation of the issuer whose value is backed by the underlying asset. If the issuer were to decide not to honor their obligations then there would be little that could be done. Granted some of the issuers do take some precautions to prevent one person from controlling large amounts of funds (multisig for example), but this is not 100% foolproof.

Generally speaking you can get a number of free trades with a brokerage if you have sufficient assets held at the bank and there are companies like sharebuilder that allow you to buy stock for only $4 in commissions

This is true. There have been a few example of failed assets on the NXT AE (e.g. ach and ReserveShare) where the asset issuers either suddenly disappeared or failed to issue dividends and then disappeared sometime later.

There have been steps taken to mitigate the risk of scammy assets on the NXT AE, however. For example, NXTInspect is one such service which aims to audit assets on the AE by looking at their business plans. Unfortunately, it doesn't completely eliminate the risk of scam assets.

Even if business plans are sound, there is nothing to stop someone from simply planning and executing a Lon con when dealing with issuing assets.

The concept of using some kind of asset exchange is that you are trusting a third party with your assets which is not what Bitcoin is about.

Lorenzo

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Activity: 406

Merit: 250

Quote from: Daedelus on April 21, 2015, 09:15:57 AM

Quote from: BTC_Superman on May 14, 2015, 10:30:52 AM

You can only buy such assets with altcoins. You can only buy altcoins with bitcoins.

Not true.

You can buy Nxt assets directly with BTC here: http://www.secureae.com/

I'm guessing that assets there aren't bought with BTC directly though. Probably some sort of BTC to NXT conversion still happens behind the scenes.

No, you can not buy. You can only buy Nxt assets.

NXT isn't the only altcoin with an asset exchange, although they are currently the largest.

So far, the following altcoins have asset exchanges:

Bitshares
ClearingHouse
Colored coins
Counterparty
Ethereum
HyperLedger
Mastercoin
NEM
NFD
NXT
Peershares
Qora
Veritasium's UltraCoin

And also HZ (Next Horizon), NuBits, and Ripple have support for assets too. There are probably more that I've missed as well.

you miss 2, like NODE, Burst!

Ah, thanks. I wasn't quite sure about NODE. I thought it had a AE since it was originally supposed to be a fair relaunch of NXT but I wasn't 100% sure since there weren't many references online about it and it's code was rewritten. As for BURST, I was originally under the impression that the 2.0 features of NXT were removed from it. I just did a search for "BURST asset exchange" and it looks like you're right (although their asset exchange isn't very active currently).

Pretty much any NXT clone is guaranteed to have an AE but most (e.g. BilShares, NAS, FIMK, etc.) aren't used very much.

Miracal

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Quote from: Daedelus on April 21, 2015, 09:15:57 AM

Quote from: BTC_Superman on May 14, 2015, 10:30:52 AM

You can only buy such assets with altcoins. You can only buy altcoins with bitcoins.

Not true.

You can buy Nxt assets directly with BTC here: http://www.secureae.com/

I'm guessing that assets there aren't bought with BTC directly though. Probably some sort of BTC to NXT conversion still happens behind the scenes.

No, you can not buy. You can only buy Nxt assets.

NXT isn't the only altcoin with an asset exchange, although they are currently the largest.

So far, the following altcoins have asset exchanges:

Bitshares
ClearingHouse
Colored coins
Counterparty
Ethereum
HyperLedger
Mastercoin
NEM
NFD
NXT
Peershares
Qora
Veritasium's UltraCoin

And also HZ (Next Horizon), NuBits, and Ripple have support for assets too. There are probably more that I've missed as well.

you miss 2, like NODE, Burst!

Lorenzo

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Activity: 406

Merit: 250

Quote from: Daedelus on May 15, 2015, 06:08:22 AM

Quote from: Daedelus on April 21, 2015, 09:15:57 AM

You can only buy such assets with altcoins.

Not true.

You can buy Nxt assets directly with BTC here: http://www.secureae.com/

I'm guessing that assets there aren't bought with BTC directly though. Probably some sort of BTC to NXT conversion still happens behind the scenes.

You guess is exactly right Grin

but it is a technicality. If some has a BTC wallet and no other altcoins, they are able to go to secureae.com and buy assets directly with BTC.

The fact the service does the conversion has no relevance to the BTC only purchaser. As far as they are concerned, they paid BTC and got assets.

I guess that's true. It sounds quite similar to how services like BitPay work in that they instantly convert BTC to USD behind the scenes so that those with bitcoins can shop at merchants that would otherwise only accept USD. Except in this case, the conversion puts buying pressure on NXT so ultimately, it would be beneficial for NXT's price.

Daedelus

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Activity: 574

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Quote from: Daedelus on April 21, 2015, 09:15:57 AM

Quote from: louise123 on May 15, 2015, 05:08:32 AM

You can only buy such assets with altcoins.

Not true.

You can buy Nxt assets directly with BTC here: http://www.secureae.com/

I'm guessing that assets there aren't bought with BTC directly though. Probably some sort of BTC to NXT conversion still happens behind the scenes.

You guess is exactly right Grin

but it is a technicality. If some has a BTC wallet and no other altcoins, they are able to go to secureae.com and buy assets directly with BTC.

The fact the service does the conversion has no relevance to the BTC only purchaser. As far as they are concerned, they paid BTC and got assets.

Lorenzo

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Quote from: Alley on April 17, 2015, 06:26:32 PM

Is this currently implemented anywhere? So I can buy stock attached to a colored coin instead of spending $10 a trade with ameritrade?

I am not sure about stock but I think NXT has something similar.
Head over to their thread and ask there: https://bitcointalksearch.org/topic/ann-nxt-descendant-of-bitcoin-303898

Yeah, NXT does have something similar in their asset exchange. You can buy, sell, and trade assets - some of which represent shares in companies. Others such as jl777hodl and NXTventure kind of act in a similar way to managed funds in that they represent a collection of other assets which may or may not produce dividends. Still a few others are IOUs such as mgwBTC (which represents BTC) and coinoUSD (which represents USD). You can check out the NXT asset exchange by following the links below:

http://nxtblocks.info/#section/blockexplorer_assets
http://trade.secureae.com/
http://www.cryptoassetcharts.info/assets/info

More detailed information about the AE can be found in the NXT wiki:

http://wiki.nxtcrypto.org/wiki/Asset_Exchange

Be aware that anyone can list an asset and many are scams so it's advisable to check this forum too:

http://nxtforum.org/index.php?board=62.0

louise123

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Quote from: Alley on April 17, 2015, 06:26:32 PM

Is this currently implemented anywhere? So I can buy stock attached to a colored coin instead of spending $10 a trade with ameritrade?

I am not sure about stock but I think NXT has something similar.
Head over to their thread and ask there: https://bitcointalksearch.org/topic/ann-nxt-descendant-of-bitcoin-303898

Lorenzo

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Activity: 406

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Quote from: ACCTseller on May 14, 2015, 09:00:13 PM

Nxt has implemented colored coins what is called the Nxt Monetary System

When you are using the NXT asset exchange, you are technically buying a debt obligation of the issuer whose value is backed by the underlying asset. If the issuer were to decide not to honor their obligations then there would be little that could be done. Granted some of the issuers do take some precautions to prevent one person from controlling large amounts of funds (multisig for example), but this is not 100% foolproof.

Generally speaking you can get a number of free trades with a brokerage if you have sufficient assets held at the bank and there are companies like sharebuilder that allow you to buy stock for only $4 in commissions

This is true. There have been a few example of failed assets on the NXT AE (e.g. ach and ReserveShare) where the asset issuers either suddenly disappeared or failed to issue dividends and then disappeared sometime later.

There have been steps taken to mitigate the risk of scammy assets on the NXT AE, however. For example, NXTInspect is one such service which aims to audit assets on the AE by looking at their business plans. Unfortunately, it doesn't completely eliminate the risk of scam assets.

ACCTseller

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Activity: 532

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no longer selling accounts

Quote from: Daedelus on April 21, 2015, 09:15:57 AM

Nxt has implemented colored coins what is called the Nxt Monetary System

When you are using the NXT asset exchange, you are technically buying a debt obligation of the issuer whose value is backed by the underlying asset. If the issuer were to decide not to honor their obligations then there would be little that could be done. Granted some of the issuers do take some precautions to prevent one person from controlling large amounts of funds (multisig for example), but this is not 100% foolproof.

Generally speaking you can get a number of free trades with a brokerage if you have sufficient assets held at the bank and there are companies like sharebuilder that allow you to buy stock for only $4 in commissions

Lorenzo

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Activity: 406

Merit: 250

Quote from: BTC_Superman on May 14, 2015, 10:30:52 AM

You can only buy such assets with altcoins. You can only buy altcoins with bitcoins.

Not true.

You can buy Nxt assets directly with BTC here: http://www.secureae.com/

I'm guessing that assets there aren't bought with BTC directly though. Probably some sort of BTC to NXT conversion still happens behind the scenes.

No, you can not buy. You can only buy Nxt assets.

NXT isn't the only altcoin with an asset exchange, although they are currently the largest.

So far, the following altcoins have asset exchanges:

Bitshares
ClearingHouse
Colored coins
Counterparty
Ethereum
HyperLedger
Mastercoin
NEM
NFD
NXT
Peershares
Qora
Veritasium's UltraCoin

And also HZ (Next Horizon), NuBits, and Ripple have support for assets too. There are probably more that I've missed as well.

BTC_Superman

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No, you can not buy. You can only buy Nxt assets.

Daedelus

hero member

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You can only buy such assets with altcoins. You can only buy altcoins with bitcoins.

Not true.

You can buy Nxt assets directly with BTC here: http://www.secureae.com/

cbeast

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Let's talk governance, lipstick, and pigs.

You can only buy such assets with altcoins. You can only buy altcoins with bitcoins. Try the altcoin section.

Bizmark13

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Activity: 462

Merit: 250

Check out this link if you're interested in decentralized asset exchange platforms:

http://o.info/How_to_issue_a_cryptosecurity

There are many such systems in development, although most aren't widely used. Some of the more popular ones include NXT, Counterparty, Mastercoin, and BitShares.