Cryptoshare - a digital share for submission, registration, storage and transfer of which the technology of a decentralized public registry (BlockChain) is used.
Until 2012 the blockchain technology underlying the first cryptocurrency – bitcoin (bitcoin) - was mostly considered as a revolutionary payment instrument. Nevertheless, later it became clear that the potential of this technology is much more than just a decentralized payment system. Currently there are many areas in which the blockchain technology is used. Although many projects are in the early stages, their implementation is only a matter of time.
Bitcoin is the protocol for transferring the rights for digital coin, it is the feature of the BlockChain technology that allows to use it to create CryptoShares. The digital coins are not coins but tokens corresponding to some quite real things. For example, one coin is one share of the company X. Thus, the appearance of cryptoshares was a logical and expected step in the evolution of the stock market.
History of creation
To date Cryptoshares technology has passed sufficient validation in real conditions. The developer-company declares the readiness of its technology to be used for cryptoshares issue for non-affiliated Companies.
Cryptoshares technology allows to any company to issue its own shares in the form of cryptoshares or transform their traditional shares into it. Afterwards, to publicly trade them on open marketplaces on the Internet (exchanges). In this case there is no need for the company to submit documents to Securities and Exchange Commission (SEC) to obtain the approval of the regulator.
This technology reduces the path from the company to the investor down to two simple steps:
- issuing of own cryptoshares ;
- bringing them to stock exchange;
In addition, after issuing a cryptoshares a company can accurately monitor the share of each shareholder in real-time using the Dividends Management System - DMS. The system (DMS - Dividends Management System) works as follows: during the reporting period (e.g. quarter) the share of each registered shareholder is being fixed automatically several times a day. All these values are being accumulated and after the end of the reporting period we have an actual share of each shareholder. Based on this actual share dividends are accrued.
Principle of operation
The basic principle of peer-to-peer network that provides a storage, management and transfer of cryptoshares, coincides with the principle of the bitcoin network. I.e. cryptoshares technology, as well as bitcoin, uses the blockchain. With the difference that in the bitcoin network a digital token (coin) is a currency and in the case of cryptoshares – a specified number of company's shares (usually one).
For easy trading of cryptoshares there are special crypto exchanges that allow to trade them 24/7 in automatic mode. Thus, CryptoShares technology eliminates human factor from the process of their circulation and accounting.
The specific parameters of peer-to-peer network can be modified to fit the requirements of the company for which the CryptoShares are being issued.
Such major parameters include:
- number of cryptoshares
- the rules for cryptoshares generating;
- the encryption algorithm;
- type of block confirmation: POW, POS or POW/POS;
Cryptoshares technology allows to eliminate many shortcomings of traditional shares and provides companies with opportunities unavailable earlier.