Bitcoin has gained a lot of attention as a digital currency as the value of it rises and falls steadily. However, what hasn’t gotten a lot of attention is the technology behind it. More than one person has said that it isn’t a currency at all, and indeed, there are plenty of other uses the technology could be used for.

Bitcoins

Writing on CNBC‘s website, Estimize founder and CEO Leigh Drogen suggests that bitcoin block chains could be used to track every trade of every stock and enable investors to alert regulators when there is suspicious trading activity occurring.

Investors should watch for insider trading

Drogan believes that investors rather than regulators should be empowered to catch insider traders in the act. He says there should be some kind of “mechanism” by which investors would be able to keep an eye on each other and report insider trading to the Securities and Exchange Commission.

He notes that the SEC doesn’t really have much motivation to catch and stop insider traders. If regulators fail to catch those who trade based on nonpublic information, then they don’t’ really suffer in any way. Investors, on the other hand, lose a lot of money when these schemes go on. The author also notes that big-time technology isn’t even needed to be able to successfully carry out insider trading. However, he believes technology could be used to put a stop to it.

How a bitcoin-based system could work

Bitcoins are basically strings of code which record every transaction or trade in a sort of public ledger called a block chain. If this sort of system was applied to every single trade on Wall Street, traders would be able to see every trade which occurs. Trading could occur anonymously, and the SEC would be able to figure out who was actually guilty of the suspicious trading if enough evidence was presented.

He believes using bitcoin in this way would enable institutional investors to develop their own algorithms to catch suspicious trades whenever they happen.