Peer-to-Peer Securities Trading

Peer-to-peer systems are highly distributed and self-organizing communication networks.They get on without a central server as much as possible. This paper proposesto organize the trading of securities - like it is being done up until now at the stock exchange- on a peer-to-peer basis. In this concept there is no central server that takesover the matching of supply and demand or rather no central server that administersthe order book. The result is a highly decentralized peer-to-peer network. Ideally,every trader will be represented through his peer, which carries out the buying andselling contracts in coordination with other peers. The network is more robust in caseof a system crash than a centralized system because it works without a central coordinationunit. Furthermore costs for central system components can be partly dropped.In addition it is possible that everybody can participate in the trading of securities anddoes not rely on a bank. The Chord protocol is being used as a decentralized coordinationmechanism....