[Cryptography] Business opportunities in crypto

[John Levine]

It appears that Henry Baker <hbaker1 at pipeline.com> said:
>3. Better stock market trading mechanisms. Currently, if
>you put in a 'buy' or 'sell' order, your own broker can
>'front-run' you (hello Robinhood!) ...

I wouldn't believe everything I read in Wall Street Bets. Front
running is quite illegal and Robinhood in particular would have no
reason to do it since they do not buy or sell on their own account.

This is not a technological problem, it's a business problem. Everyone
in the financial world knows that it would be easy to get rid of HFT
by moving to a model where all the bids are collected at the
clearinghouse and buy and sell orders matched up once a second or even
once a minute. The reason they don't is because there are people who
make money from the current strange system.

Ditto realtime clearing, it's not a technical problem and there is no
problem for cryptography to solve. DTCC (the clearinghouse) could do
realtime clearing of each sale if its members wanted them to, but they
don't because that would require them to have vastly more capital.
They'd have to fund each sale as it happens, as opposed to the current
scheme where a broker matches up its own customers' trades every night
and only has to send the unmatched ones to DTCC.