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Cryptographic Securities Exchanges

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Financial Cryptography and Data Security (FC 2007)

Part of the book series: Lecture Notes in Computer Science ((LNSC,volume 4886))

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Abstract

While transparency in financial markets should enhance liquidity, its exploitation by unethical and parasitic traders discourages others from fully embracing disclosure of their own information. Traders exploit both the private information in upstairs markets used to trade large orders outside traditional exchanges and the public information present in exchanges’ quoted limit order books. Using homomorphic cryptographic protocols, market designers can create “partially transparent” markets in which every matched trade is provably correct and only beneficial information is revealed. In a cryptographic securities exchange, market operators can hide information to prevent its exploitation, and still prove facts about the hidden information such as bid/ask spread or market depth.

The original version of this chapter was revised: The copyright line was incorrect. This has been corrected. The Erratum to this chapter is available at DOI: 10.1007/978-3-540-77366-5_37

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Author information

Authors and Affiliations

  1. School of Engineering and Applied Sciences, Harvard University, Cambridge, MA, 02138

    Christopher Thorpe & David C. Parkes

Authors
  1. Christopher Thorpe
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  2. David C. Parkes
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Editor information

Editors and Affiliations

  1. Software Engineering Institute, Carnegie Mellon University, 4500 Fifth Avenue, 15213, Pittsburgh, PA, USA

    Sven Dietrich

  2. CRCS DEAS, Harvard University, Maxwell Dworkin 110, 33 Oxford Street, 02138, Cambridge, MA, USA

    Rachna Dhamija

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© 2007 Springer-Verlag Berlin Heidelberg

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Thorpe, C., Parkes, D.C. (2007). Cryptographic Securities Exchanges. In: Dietrich, S., Dhamija, R. (eds) Financial Cryptography and Data Security. FC 2007. Lecture Notes in Computer Science, vol 4886. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-77366-5_16

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  • DOI: https://doi.org/10.1007/978-3-540-77366-5_16

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-77365-8

  • Online ISBN: 978-3-540-77366-5

  • eBook Packages: Computer ScienceComputer Science (R0)

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