Introducing the world’s first dual blockchain for the global equity market — Part 1
The challenge with using blockchain technology in financial services is that blockchain is public and transparent. Yet a lot of financial services data is private and confidential. So how do we successfully use blockchain in the financial services market to keep data secure yet retain the benefits of a distributed ledger?
Let’s look at data and transactions in the global equity market…
In most countries, businesses are required to publicise information about their ownership and shareholdings. This means that businesses need to report on who owns their business in terms of equity or shareholdings. So this data is public. So far, so good, for blockchain. Additionally, public businesses have to publicly announce share offers and private businesses often make share offers publicly available, particularly if they’re trying to raise funds from the public. A share offer is the offer of a share, or shares, in a business for a set price per share. Shares can be offered on a public stock exchange or in a private sale. So this data is usually publicly available. Tick! And when an investor buys shares, and becomes a shareholder, again this needs to be on a public record or a share register. In the UK, you’d find all of this information on Companies House, for instance.
So, this sounds a perfect match for blockchain, right? Public data + blockchain = perfect. But, wait… What about information about an individual shareholder — their name, their email address, their bank details? That’s not public data. That’s private and confidential and needs to be secured and encrypted. What about the detailed information about the business, such as business owner address details, email address, telephone number and business bank account details? This is private too, right?
So we have a mix of public and private data in the global equity market…
Private data includes personal and financial data on businesses and shareholders. Public data includes business ownership and shareholdings. This causes us a problem with blockchain because, at its heart, blockchain enables us to have decentralisation and transparency. That’s a problem when data needs to be secure, private and encrypted.
So how do we use blockchain when we have a mix of public and private data?
We build a dual blockchain — one public blockchain for public data and one private blockchain for private data. In fact, we build the world’s first dual blockchain for the global equity market.
We manage public information, on business ownership and shareholdings, on the transparent, public blockchain and we manage private information, on shareholder and business details, on the secure, encrypted private blockchain. We connect the two blockchains with oracles and build in a requirement that there must always be a record of a business or investor on both of the blockchains in order to validate a share transaction. This is what we’re building now.
In part 2…we’ll explain how our blockchain is built specifically for digital share transactions.
Chainium has rebranded to Own. For more information about our brand change please read this medium post.
