[NhanH]

Can anyone knowledgeable (especially those that do not like bitcoin) weigh in as to why this would be a bad idea ?

I'm asking this sincerely, and not being sarcasm, as I don't know enough about either Bitcoin or stock market to make a judgement. And this seems ... different enough that I'm not sure my reaction should be "damn the future is here", or "what a bunch of craps".

[wpietri]

As somebody who did tech work for traders who dealt with a number of exchanges, I am hugely skeptical that an exchange can be fully automated.

A real exchange has an enormous team of well-paid people whose job it is to make sure things run smoothly. They also have incredible power: they can freeze the exchange, limit price movements, undo transactions, kick people out of the market, and who knows what else. They use this power rarely, but when they do market participants are generally glad they did.

I'm sure somebody can automate 90% of the cases, or 99%, or even 99.9%. Most trading is routine. But will this work when there's a war? A financial panic? A major fraud or theft? An exploitation of a previously unsuspected bug?

The New York Stock Exchange has been working this stuff out since 1817 (or 1792 depending on how you count). And we still have things like Black Monday [1] and the 2010 Flash Crash [2].

This will be an interesting experiment, but I will not be surprised at all if it's something most investors avoid for decades because it's a) novel and therefore risky, and b) lacking a lot of the regulatory protections of a real exchange.

[1] http://en.wikipedia.org/wiki/Black_Monday_%281987%29

[2] http://en.wikipedia.org/wiki/2010_Flash_Crash

[dublinclontarf]

As the company issuing shares, unless you get the approval of the SEC (i.e. you're regulated to sell shares to the general public) you will be fined and prosecuted.

It you are a non U.S. based company you will be chased by the SEC for issuing shares to U.S. citizens, which brings you under their jurisdiction(so says them).

[TomGullen]

Unregulated financial marketplace, what could possibly go wrong?

I'm a big Bitcoin supporter mainly because of the interesting tech opportunities, but I don't like the extremist proponents to deregulation that come with Bitcoin in droves. Take a look at the posts from people who lost their families inheritance when the price drops.

Now I know it's not a level playing field, and I can spend my inheritance on forex in a few hours. I'm not saying that's a good thing, but the fact it's not a level playing field does not mean it's a green light to let these things run without any regulation at all.

People who advocate freedom from all regulation generally are in my experience wholly unsympathetic to those who suffer as a result of it, and are unable to recognise that the theory behind it all is flawed.

[Kalium]

There are a lot of ways to abuse information asymmetry in stock markets. Decentralizing and removing oversight makes things more readily abused by creating more forms of information asymmetry.

[frontline]

stealth takeovers, stealth monopolies, the fact that its unregulatable and illegal as fuck under US law

[micah541]

One easy solution is to force key holders to de-anonymize themselves if they want to take any shareholder actions, such as voting. This wouldn't be an issue for 99% of us - just because I own a few TSLA shares doesn't mean I'm ever going to pound my fist on Elon Musk' desk and demand something - But if someone does buy up a large portion of the corporation and tries to use it to vote - they would have to declare "Hi, I am Carl Icahn, I own the following private keys XYZ and I'm demanding that we liquidate our assets and build a giant statue to the sky" or whatever. This prevents the Taliban or Chinese hackers from seizing control of a US corporation.