As investors demand more access to alternative investments, blockchain & DLT (distributed ledger technology) offers an innovative way to solve for the industry’s current operational inefficiencies. Here is a look at the differences between public/open & private/permissioned blockchain.
Traditional securities are converted to digital asset securities and recorded on the distributed ledger when applied to alternatives.
Records of all transactions are held with the issuer & shared with transfer agents, custodians, advisors, and investors who have been granted permission to transact on the Blockchain. No private key is needed as the network operates using accounts vs. wallets. Hence, if investors lose access to the account/network, the record of transaction/ownership will still remain with the asset manager & all other parties on the network.
When applied to alternatives, open blockchain networks issue tokens representing ownership of a security that functions like bearer form instruments. Investors access their wallets with the use of a private key. Loss of private key could lead to loss of the asset.
