Laura Shin, October 27, 2015
http://www.forbes.com/sites/laurashin/2015/10/27/nasdaq-unveils-blockchain-enabled-platform-linq-announces-6-inaugural-clients/
On Tuesday, at the Money 20/20 conference in Las Vegas, Nasdaq CEO Robert Greifeld will conduct the first-ever demonstration of Linq, a platform for managing shares of private companies using technology derived from that which powers Bitcoin, which was announced earlier this year.
The company also announced the initial clients, which include Chain.com, the San Francisco-based blockchain API company that partnered with Nasdaq to develop the platform, ChangeTip, a Bitcoin company specializing in micro-payments, and PeerNova a blockchain-inspired ledger and database company, among others.
“We are extremely encouraged by the initial demand for Nasdaq Linq from these innovative, first-mover companies, and the validation it represents of our application of blockchain technology,” said Greifeld in a statement. “Blockchain applied to the private market is innovation built on top of innovation, and carries with it the opportunity to forever alter the future of financial services infrastructure.”
Linq clients will be have a comprehensive, historical record of issuance and transfer of their securities, making their records easier to audit and giving them greater capabilities around issuance governance and transfer of ownership.
Managing shares of private companies is considered to be one of the ideal test cases for the uses of blockchain technology. Usually a labor-intensive, paper-based, manual process involving paper stock certificates, option grants and convertible notes that quickly become outdated, the so-called distributed ledger technology behind Bitcoin will enable it to be managed digitally, making it more efficient and secure.
As more and more companies choose to stay private longer, fueling a rise in the number of so-called unicorn startups, which are valued at $1 billion or more, many are seeking efficient solutions for managing shares in such companies, and a few startups are offering software to do so. Linq is a new option in that space.
Bitcoin technology uses ledgers distributed on computers around the world to log transactions securely, nearly instantaneously and transparently at much lower cost. It is widely considered to have potential to cut the middleman out of many transactions in areas ranging from finance to law.
To develop Linq, Nasdaq’s own technologists collaborated with Chain.com and global design firm IDEO to create a user-friendly platform that takes advantage of its own blockchain, instead of logging the transactions on the public Bitcoin blockchain. In September, Nasdaq, along with Citi, Visa V -1.30%, Capital One, and others participated in a $30 million round of funding for Chain.com.
The other three Linq inaugural clients include cyber security company Synack, mobile messaging app TangoMe, and data-security company Vera.
Nasdaq recently announced its next blockchain initiative will attempt to manage proxy voting via blockchain technology in Estonia.