The Realities of Internet Trading

Zusammenfassung

Imagine for a moment that a Stock Exchange is like an exclusive shop. The goods on offer are well known and are of certifiable quality. The doorman ensures that only the right sorts of customers are allowed into the store. Discreetly placed security cameras guard against theft and fraud. The cashier meticulously records transactions in the customer’s accounts, reviewing them nightly to ensure that payments are up to date. Purchases are delivered promptly the following day. Buyers and sellers can transact in an environment of complete security and confidence, as we expect today from our financial markets. Now what happens when we open this market to the internet, the world’s most public network. Let’s imagine that our exclusive shop is now in the middle of the platform of a busy train station. Hundreds of people are moving around the merchandise. It is impossible to distinguish between serious customers and people who are simply walking to their train. It is difficult to monitor everything that is going on. Thieves stuff their pockets with good from the tables. Some street vendors mingle among the crowds, selling inferior quality goods, or taking bogus orders for goods that will never be delivered. Can this be an accurate picture of an internet-based market?