Looking at the news that the NASDAQ will use the blockchain via colored coins is clearly positive on it's face. But look at the derivatives, a few of which have been touched upon.

1) With Wall street using colored coins of a greater than dust size it will not be long before some percentage of coins are tied up as markers for property. The number available for currency will be decreased, which is also positive for fiat values.

2) Wall street firms will each still handle most transactions in-house, meaning most transactions will not happen on the blockchain. The blockchain will likely only be touched when firms make large trades between each other, basically clearing house trades. Of course, a small investor could cause a transaction to hit the blockchain if they wished to take personal possession and storage of their shares.

3) HFT would all occur in-house as most of those trades are never executed anyway. Just like trades in gold futures, physical gold rarely ever moves, just entries of ownership in a ledger. In this case, the bitcoins are the bars of gold, the in-house ledger would track temporary ownership. This means that since it rarely touches the blockchain itself, the transactions can be instantaneous.

4) Although most transactions would not hit the blockchain, they certainly would from time to time, and if you add up hundreds of firms doing this the number of transactions would certainly increase, so too would the transaction fees. Even more incentive for miners.

5) I would be interested to see if dividends from companies could be paid in bitcoins to the address holders even if they are anonymous.


There are many other effects, both great and small. These are just a few. How it shakes out no one can predict accurately, but it will definitely become a game changer once live. Hold on to your hat!